1. UC Berkeley / UC San Francisco Supplier Diversity Basics
Module 1: Policy and Regulatory Requirements
Welcome to the Supplier Diversity Basics training session. Hang onto your seats. This is an overview that will transport you to a basic understanding of how we support small and diverse businesses and maintain compliance with regulatory requirements.

2. Supplier Diversity Basics Curriculum
For UC Berkeley and UC San Francisco Employees
What you need to know:
Module 1: Policy and Regulatory Requirements
Module 2: Campus Responsibilities
Module 3: Federal and State of California Reporting
This training session is designed to provide staff at both UC Berkeley and UC San Francisco campuses with an introduction to our campus Supplier Diversity Program. It is divided into three modules. Each module begins with a set of learning objectives and ends with several questions to help you assess what you have learned.

3. Module 1 Learning Objectives
At the end of this module, you will have:
Reviewed the Federal Acquisition Regulations which apply to UC federally funded contract agreements exceeding the federal threshold.
Read the Environmental Protection Agency Minority and Women Business Utilization Requirements
Reviewed the sections of Business Finance Bulletin 43 (BFB-BUS-43) Materiel Management which apply to supporting small and diverse businesses.
Federal Acquisition Regulations (subparts 19.7 and ) are the foundation for how UC campuses need to be compliant with federal contract/subcontract requlations.
The Environmental Protection Agency provides a framework of requirements for using MBE and WBE businesses and periodic reporting of MBE/WBE utilization
BFS-BUS-43 details how these regulatory requirements apply to University programs and activities.

4. Federal Acquisition Regulations (FARS)
Subpart 19.7 – The Small Business Subcontracting Program
Read all sections of this subpart. They describe the requirements for maintaining procedures with which any institution receiving federal funding must comply. They are also cited in BFB-BUS-43.
Definitions
Statutory requirements (including payment to small businesses within 90 days)
Subcontracting plan requirements
Responsibilities of the contracting officer under the subcontracting assistance program
explains a number of terms used in the following sections.
describes how a business must represent itself as a small business in order to participate in providing goods and services to a federally funded prime or subcontractor.
articulates the critical elements that must be included in a Small Business Subcontracting Plan to be submitted for review by a contracting officer.
Responsibilities of the contracting officer under the subcontracting assistance program: includes determining the need for a plan, review of the proposed plan, ensuring the plan goals are being achieved, reviewing periodic utilization reports in the Electronic Subcontracting Reporting System (eSRS), and pursuing liquidated damages.

5. Federal Acquisition Regulations (FARS) (cont’d)
FARS Subpart 19.7 classification types for small businesses
Small Business Enterprise (SBE) (other than the categories below)
Small Disadvantaged Business (SDB)
Woman-Owned Small Business (WOSB)
Historically Black Colleges and Universities (and Minority Institutions) (HBCU/MI)
HUB ZONE Small Business (HUBZone)
Veteran-Owned Small Business (VOSB)
Service-Disabled Veteran-Owned Small Business (SDVOSB)
Alaska Native Corporations and Indian Tribes that have not been certified by the Small Business Administration (SBA) as small disadvantaged business (ANC)
Alaska Native Corporations and Indian Tribes that are not small businesses (ANC)
FAR Subpart 19.7 requires that the following types of small businesses be used whenever possible for federal contracts/subcontracts as defined by the Small Business Administration. Federal agencies set annual goals, with which they want any institution receiving funding, to comply. Remember that when a project team is awarded funding exceeding $650,000, it must create a plan which includes goals in dollars and percentages for as many of these goals as possible. The reality is that in California, we do not have the opportunity to purchase from HBCU/MI or Alaska Native institutions. However, contracting agencies are increasingly pressuring us to include goals for the other classifications

6. Federal Agency Small Business Goals
Federal agencies set annual goals for each classification type with which they want any institution receiving funding to comply. This example is for Health & Human Services Fiscal Year 2013.
For FY13 Oct. 1, to Sept. 30, 2103, Health and Human Services had set specific goals and succeeded in surpassing goals in certain classifications and not achieved goals in others. FY 2015 goals are 33% for small businesses in general, 5% for Women-Owned
When prime contractors or subcontractors like the UCs federally funded project teams, create plans, they are strongly encouraged to set these same goals. However, given the research to be done and the budget they are alloted, they may not be able to set such goals. These situations require negotiation with Contracting Officers so that plans can be approved and funding awarded. The plan becomes a contractual part of the agreement.

7. HHS FY 2015 Small Business Goals
Small Business Categories
Acronym %
Small Business in general (includes categories below) SB
33%
Small Disadvantaged Business (including 8(a) Program Participants, Alaska Native Corporations (ANC) & Indian Tribes
SDB 5%
Women-Owned Small Business & Economically Disadvantaged Women-Owned Small Business
WOSB
Historically Underutilized Business Zone
HUBZone 3%
Veteran-Owned Small Business
VOSB
Service-Disabled Veteran-Owned Small Business
SDVOSB
HHS is the acronym for Health and Human Services. HHS goals apply to all National Institute of Health (NIH) awards and their sub agencies. As you might have noticed in comparing these goals to those on the previous slide, they can change every fiscal year.

8. Federal Acquisition Regulations (FARS) (cont’d)
FAR Subpart Small Business Subcontracting Plan
Includes:
Definitions of terms
Required plan details – articulated in the Master Plan Notice on the Supplier Diversity Federal Requirements webpage.
Reporting Requirements in the federal Electronic Subcontracting Reporting System (eSRS): Semi-annual and annual reports – see the Supplier Diversity webpage noted in the second bullet above for an explanation of periods to be reported and report deadlines.
Types of reports:
Individual Subcontracting Report (ISR)
Summary Subcontracting Report (SSR)
explains specific components to be included in a plan. Note that federal contracting agencies may have different form templates which they use for the plan template structure.
The standard templates which we use at UCB have been vetted with the Office of Naval Research, which is our cognizant agency. As a cognizant agency, they are responsible for visiting our campus approximately every three years to audit our purchasing activities for federally funded projects, including our supplier diversity activities in compliance with the requirements stated in the FARS cited in these slides. An ISR must be completed for each federally funded project. The plan details cumulative spend up to the end date of the reporting period for large business concerns, small business concerns, and each of the small business classification types. An SSR is completed for every contracting agency from which the campus has been awarded. In contrast to the ISR, the SSR summarizes spend for all relevant awards for the specific reporting period. Example: if we have 3 awards from the Department of Energy (DOE). The DOE SSR shows total spend for the three awards in each of the fields: large business concerns, small business concerns, and each of the small business classification types.

9. Defense Federal Acquisition Regulations (DFARS)
The Defense Acquisition Regulations System (DFARS) develops and maintains acquisition rules and guidance to assist purchasing staff as they acquire the goods and services required by the Department of Defense (DoD)
These regulations apply to all federal contracts awarded by DoD to University Principal Investigators.
Refer to Parts 201 – 253 for the DFARS regulation content
The Department of Defense (DOD) has created rules which expand upon the federal acquisition regulations. Read and book mark them in the event, you need to support or create a plan for a DOD funded project.

10. What does “Good Faith” mean?
To make progress toward achieving the small business goals set in the Small Business Subcontracting Plan which the awarding organization has accepted
Document/document/document! To maintain documentation and notify funding organization if procurement from a small business for which goals were set in the Small Business Subcontracting Plan does not occur – cited in FAR 19.7
The next slides describe the possibility of having to pay liquidated damages if the subcontracting goals are not met at completion of the agreement
Demonstrating good faith means that the PI and project team set goals which they can reach. Throughout the duration of the agreement, they diligently procure from the small businesses identified in the plan.
The FARS now require that if a project team is not able to purchase from a small business as they committed in the plan, the PI must notify the Contracting Officer in writing and explain efforts made to find another small business, and if not a small business, why they cannot use another small business.

11. Liquidated Damages
FARS reads: ‘ “Failure to make a good faith effort to comply with the subcontracting plan” means willful or intentional failure to perform in accordance with the requirements of the subcontracting plan, or willful or intentional action to frustrate the plan’
FAR Liquidated damages
Damages could possibly be an amount equal to the actual dollar amount by which the contractor failed to achieve each subcontracting goal.
At completion of the basic contract or any option, if project has failed to meet its subcontracting goals:
The contracting officer shall review all available information for an indication that the contractor has not made a good faith effort to comply with the plan. If no such indication is found, the contracting officer shall document the file accordingly or

12. Liquidated Damages (cont’d)
If the contracting officer decides…that the contractor failed to make a good faith effort to comply with its subcontracting plan:
Sends written notice specifying the failure requesting a response within15 working days (or longer as necessary)
Advises the contractor of the possibility that the contractor may have to pay liquidated damages
Contractor must:
Demonstrate what good faith efforts have been made before the contracting officer issues the final decision
In making a decision, contracting officer must look to the totality of the contractor’s actions, consistent with the information and assurances provided in its plan.
The fact that the contractor failed to meet its subcontracting goals does not, in and of itself, constitute a failure to make a good faith effort. For more information, see FAR

13. EPA - 40 CFR: Protection of the Environment
Part 33: PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN UNITED STATES ENVIRONMENTAL PROTECTION AGENCY PROGRAMS
Fair Share Goals for procurement of goods and services from:
Minority Business Enterprise (MBE)
Women Business Enterprise (WBE)
Applies to Environmental Protection Agency (EPA) Federal Grants, Cooperative Agreements, and Interagency Agreements.
Important note: These regulations do not require a Small Business Subcontracting Plan. However, in certain cases, the institution receiving the funding, must report MBE/WBE utilization on an annual or semi-annual basis. Fair share goals are not quotas. Reporting will be addressed in more detail in Module 2.
For more information, see:
The 40 CFR regulations define “Fair Share Objectives” for purchase of construction, equipment, services, and supplies from Minority Business Enterprises (MBE), and Woman Business Enterprises (WBE). These goals are explained in the Administrative Conditions section of the written cooperative agreement.
Progress should be made toward the stated goals through purchasing from MBE and WBE businesses which sell construction, supplies, services, and equipment. The PI and project team should be purchasing any budgeted items or services as much as possible from such business types during the course of the agreement.

14. State of CA Public Contract Code
CHAPTER 2.1. UNIVERSITY OF CALIFORNIA COMPETITIVE BIDDING
Article 2. Materials, Goods, and Services
Article 2.5. Contracts with Private Architects, Engineering, Environmental, Land Surveying, and Construction Project Management Firms
Article 3. Real Property
Article 4. Conflict of Interest
Article 5. Remedies and Penalties
Article 2 is the basis for how the UC campuses are required to conduct their bidding processes in regard to proposals for materials, goods, and services.
Also note that Office of the President is required to report the total dollars and percentages of total dollar spent for procurement, design (architecture and engineering), and construction for each campus, laboratory, and medical school to the State Legislature for the state fiscal year, July 1 of the prior year to June 30th of the current year..

15. State of CA Diverse Classifications
Spend with the following types of businesses is reported for
each of procurement, design, and construction. We recommend that businesses self-certify when appropriate on their databases.
Small Business Enterprise (SBE)
Women Business Enterprise (WBE)
Disadvantaged Business Enterprise (DBE) – managed by the California Department of Transportation (when federal Department of Transportation funds are received)
Disabled Veteran Business Enterprise (DVBE)
Some of the State of CA codes appear to be the same as the federal codes, but remember that these are businesses where their primary location is in California and they have self-certified with the State of California as small or diverse businesses. See the next slide for where they need to certify.

16. UC Systemwide Policy
BFB-BUS-43 is divided into sections which address procurement policy, compliance, responsibilities, and procedures.
Policy Summary
Definitions
Policy Text
Compliance/Responsibilities
Procedures/Campus Programs
Sections III and V include a Part 3 “SUPPLIER DIVERSITY AND FEDERAL PLANNING AND REPORTING.” The following slides explain the specific sections you need to read.

17. BFB-BUS-43 (continued)
III. Policy Text – Read PART 3: SUPPLIER DIVERSITY AND FEDERAL PLANNING AND REPORTING Note in the following extracts that the University has committed to supporting procurement from diverse businesses: B. Policy, item 2: “The University recognizes that it has a responsibility to provide procurement opportunities to a diverse supplier pool…” B Policy, Item 3: “The University seeks to dedicate an appropriate portion of the University’s business to small, diverse and disadvantaged businesses through outreach programs and supplier fairs…”
Please review these sections, since they are written to address the University’s commitment to purchasing without bias and to compliance with federal and state requirements.

18. BFB-BUS-43 (continued)
V. Procedures – Please read PART 3: SUPPLIER DIVERSITY AND FEDERAL PLANNING AND REPORTING which includes:
A. Campus Programs – addresses:
How a supplier diversity program needs to be supported
The type of outreach efforts to be integrated into a program.
The need to obtain written representation of suppliers’ federal and state classifications.
And on the following slide, item B.
Part V. Procedures specifically discusses how a supplier diversity program must be supported, outreach to small and diverse businesses, and the need to maintain documentation that a business has self-certified that it is indeed small and/or diverse.

19. BFB-BUS-43 (continued) V. Procedures
B. Campus Reporting/Management of Plans and Reporting… details the requirements for:
Creation of Small Business Subcontracting Plans
Demonstration of good faith efforts to find small, diverse businesses
Post award small business program re-representation
Data collection and reporting requirements
After reading FARS subparts 19.7 and , this information should now look familiar to you.

20. Campus Resources on Supplier Diversity Policy & Procedures
UCB Supplier Diversity webpages
Supplier Diversity Program webpages within the Do Business with UCSF website.
You can also find a wealth of information on the UC Berkeley Supplier Diversity webpages and the UC San Francisco Supplier Diversity Program website within the Do Business with UCSF website.

21. Small Business Subcontracting Plans UCB/UCSF
Between UC Berkeley and UC San Francisco, Principal Investigators are making progress toward the goals for more than 40 plans. These plans have been approved by a variety of agencies:
Army Corps of Engineers
Department of Energy (DOE)
Department of Defense (DoD)
National Aeronautics and Space Agency (NASA)
National Institute of Health: among them - National Institute of Allergy and Infectious Disease (NIAID), National Institute of Child Health and Human Development (NICHD), National Institute on Drug Abuse (NIDA), and others.
As you can see on this slide, the two campuses have a wide range of funding agencies which support research. The number of awards and types of research are continually evolving as new agreements are funded, existing ones are modified, extended, or end.

22. How the University Handles Federal Contracts & Subcontracts
The University can be awarded funding and be required to submit a Small Business Subcontracting Plan in one of several ways:
A federal agency directly awards a prime contract to the University. That agency requires a Small Business Subcontracting Plan be submitted to the agency, either as part of the initial proposal package or after the award agreement has been initiated.
If the University is the prime contractor, as in item 1 above, and in its proposal, includes subcontracts to other institutions (called flow down as required by FARS ), it must also obtain and approve Small Business Contracting Plans from any such institutions.
This information is also available on the UCB and UCSF websites. Every agreement shows the name of our organization as “The Regents of the University of California” with the address of the local pre-award department which at UCB is Sponsored Projects and at UCSF is Government and Business Contracts.

23. How the University Handles Federal Contracts & Subcontracts (cont’d)
Another institution or company is a prime contractor to a federal agency and awards a subcontract exceeding $700,000 to the University. UC Berkeley must submit and have a Small Business Subcontracting Plan approved, before an award agreement can be finalized between UCB and the prime contract institution or company.
A subcontractor as described in item 2 above, can also subcontract with the University, requiring the University to submit a Small Business Subcontracting Plan, before an agreement is signed.

24. Federal Vendor Certifications
In order for PIs and their project staff to purchase from small an diverse businesses, those businesses must be self-certified or specifically certified as follows:
Small businesses having classification types, except for 8(a) and HUB Zone, can self-certify by registering online at the System for Award Management (SAM) website.
SBA requires that the following businesses participate in a formal certification process
8(a) emerging businesses
HUB Zone businesses
EPA can also conduct a certification process for any other businesses which have not self-certified on SAM.

25. Quick Assessment: Module 1
What have you learned?
Answer the questions on the following slides to assess the knowledge you have acquired
Remember to bookmark the regulatory websites

26. Module 1 Question 1
Federal contracts/subcontracts exceeding ________ require the development of a Small Business Subcontracting Plan.
$600,000
$750,000
$700,000
Dollar amount depends on the type of federal contract

27. Module 2: Question 1 - Correct Answer
The correct answer is c. $700,000
Refer to the Federal Acquisition Regulations (FARS), Part 19 – Small Business Program

28. Module 1 Question 2
Business Finance Bulletin ______ provides a policy foundation for the promoting and support of small and diverse businesses
BUS-34
BUS-39
BUS-43
None of the above

29. Module 1 Question 2 - Correct Answer
The correct answer is c. BFB-BUS-43
The equal rights standard and policy/procedural support of small and diverse businesses is described in this document. If you have not read through it, please do so before proceeding.

30. Module 1 Question 3
EPA Grants require the submission of a Small Business Subcontracting Plan before the grant can be awarded.
True
False

31. Module 1: Question 3 - Correct Answer
The correct answer is b. False.
See slide 10. The Environmental Protection Agency does not require any type of small business subcontracting plan. However, “Fair Share Goals or Objectives” are set by the EPA in each agreement it signs with a University of California campus department:
Refer to Part 33 of 40 CFR: Protection of the Environment

32. Module 1 Question 4
All federal contracts awarded by DoD are supported by what regulations?
DFARS
FARS
a and b
PGI
All of the above

33. Module 1: Question 4 - Correct Answer
The correct answer is c. a and b
FARS is the primary source for federal acquisition regulations.
DFARS include acquisition rules and guidance are specific for acquiring goods and services required by the Department of Defense (DoD).

34. Module 1 Question 5
Which agency requires 8(a) and HUBZone Small Businesses to be certified in the System for Award Management (SAM) prior to use?
DoD
NIH
EPA
All of the above

35. Module 1 Question 5 - Correct Answer
The correct answer is d. All of the above
8(a) and HUBZone businesses are the only small businesses which must go through a formal certification process with the Small Business Administration (SBA) to qualify as a small business with any of the agencies listed as well as any other federal agency.

36. Module 1 Question 6
Where can you find information about Small Business Subcontracting Plans?
BFB-BUS-43
UCB-UCSF Supplier Diversity Program webpages
FARS Subpart 19.2
FARS Subpart 19.7 and
a, b, and d above

37. Module 1 Question 6 - Correct Answer
The correct answer is e. a, b, and d Please go back and review the slides that address each of these references, if you missed any of them.

38. Review of Module 1 Learning Objectives
You have now:
Reviewed the Federal Acquisition Regulations which apply to UC federally funded contract agreements exceeding the federal threshold.
Read the Environmental Protection Agency Minority and Women Business Utilization Requirements
Reviewed the sections of Business Finance Bulletin 43 (BFB-BUS-43) Materiel Management which apply to supporting small and diverse businesses.
Refer to these policy and regulatory resources whenever a project is receiving federal or State of CA funding.
Remember that both UCB and UCSF have more information on their websites as cited in this session.
You can also contact the Supplier Diversity Program Manager at (510) for any questions you may have. Now on to Module 2: Campus Responsibilities