Integrity Integrity Service Service Excellence Excellence

Small Business

Overview

Mary S UreyESG/SB SA OL27 July 2011

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Enterprise Sourcing Group (ESG) Organizational Overview

New organization aligned to Air Force Material Command (AFMC) to execute enterprise-wide strategic sourcing located at Wright Patterson AFB

Contracting and Small Business resources currently supporting Air Force Center for Engineering and the Environment (AFCEE), Air Force Civil Engineering Support Agency (AFCESA), Defense Technical Information Center (DTIC), and the Air Force Medical Enterprise all realigned under the ESG Realignment was phased from 28 Oct 10 - 31 Mar 11 AFCEE Contracting & Small Business realigned 1 Jan 11 AFCESA Contracting realigned 31 Mar 11

Technical resources did NOT realign to ESG

What this means for AFCEE/SB

AFCEE/SB resources realigned under and report to ESG/SB Officially ESG/SB San Antonio Operating Location (OL)

New office symbol is ESG/SB and is no longer AFCEE/SB Will continue to support current organizations & gain new ones

ESB/SB OL supports both contracting and technical

As AFCEE/SB we supported only AFCEE (contracting & technical)

As ESG/SB will support AFCEE, ESG Business Support OL, Medical, Force Protection Commodity Council, and AFCESA AFCEE support continued as it was ESG Business Support OL support was effective 1 Nov 10 Medical support was effective 1 Jan 11 Force Protection Commodity Council effective 17 Feb 11 AFCESA support effective 31 Mar 11

ESG/SB OL Customers

AFCEE Contracting designated as 772d Enterprise Sourcing Squadron (ESS) Currently located at Port San Antonio

AFCESA Contracting designated as 772 ESS OL (772 ESS/PKH) Reports to 772 ESS at Port San Antonio Currently located, and will remain, at Tyndall AFB

772 ESS and 772 ESS OL provide enterprise-wide strategic sourcing support to enhance and further the Air Force Civil Engineer mission to provide, operate, maintain, and protect sustainable installations as weapon-system platforms through engineering and emergency response services

ESG/SB OL Customers cont’d

Air Force Medical Enterprise Contracting designated as 773 ESS Formerly AFMSA and AFMOA

Air Force Medical Support Agency Air Force Medical Operation Agency

Contracting resources were located at Falls Church, VA and Port San Antonio

• All will be located at Port San Antonio

Provides enterprise-wide medical acquisition to the Air Force Medical Service (AFMS) and the warfighter to improve customer support, reduce purchase cost of services, reduce variation in service contracts by increasing standardization, accelerate delivery responsiveness and provide lifecycle management support

ESG/SB OL Customers cont’d

Air Force Force Protection Commodity Council Contracting resources located at Lackland AFB Strategically sourcing force protection equipment for 30,000 Active

Duty, Guard and Reserve Security Forces Airmen located at every Air Force installation and deployed location

770th Business Support Squadron OL Currently located at Port San Antonio Provides general support functions to organizations aligned to the

ESG, manages business operations including resources and information technology, and provides acquisition support to the organization’s strategic sourcing process

ESG Organizational Structure

ESG/SB San Antonio OL

Organizational email esg.sbsa@us.af.mil

SBA Procurement Center RepresentativeFred Lagunas210-395-8924

alfredo.lagunas.1@us.af.mil

ESG/SB SA OL

Mission: ESG/SB SA OL partners with industry and the acquisition community to execute the Air Force Small Business program while accomplishing the ESG strategic sourcing mission.

Customers: ESG, 770 BSS OL, 772 ESS, 773 ESS, FPCC, AFCEE, AFCESA, AFMOA, AFMSA, and Security Forces

What does this mean to you?We are really busyLots of new customers - no new staffWe are harder to reach by phone than ever beforePlease trust that we will eventually return emails and phone

calls – we have had no change in our work ethic

ESG/SB SA OL Goals & Actuals(772 ESS (AFCEE) less 772 ESS/PKH (AFCESA))

Sources Sought Synopsis or Request For Information (RFI)

Sources Sought Synopsis or Request For Information (RFI)

Sources sought synopsis = your opportunity to influence acquisition strategy

Questions on NAICS code, small business goals, teaming, number of contracts, costing type

Contracting Officer reviews and prepares market research report

Coordinates with small business office and acquisition strategy is finalized

Two or more in a size category to have a set-aside Cannot merely answer yes or no and expect it to count Typically these are for new contracts, but you may see RFIs at

the task order level Believe that the government is serious about getting your input

SB Competitiveness Demonstration Program

This program limited opportunities for small business contractors in eleven industries where they excelled. Construction was one of the eleven

Participating agencies are required to reinstitute use of small business set-asides whenever contract awards fall below 40% under in any of the designated industry groups

At this conference in 2009 I told you: FY07 DoD fell below the 40% requirement under construction NAICS

codes and small business set-asides were reinstituted But if DoD fell above the 40% requirement in the future small business

set-asides may not be allowed Remains to be seen what happens in future Potentially could impact HERC re-compete to allow for small business

set-asides

Small Business Jobs Act of 2010 eliminated program effective 27 Sep 10 Repeal applied first full fiscal year after date of enactment DFARS 219.10 became obsolete on 1 Oct 11

Parity (PRIOR TO Small Business Jobs Act of 2010)

FAR 19.800(e) – Before deciding to set-aside an acquisition IAW subpart 19.5, 19.13 or 19.14, CO should review for offering under the 8(a) program. SBA regulations give first priority to HUBZone 8(a) concerns. (13 CFR 126.607(b))

FAR 19.1305(a) – CO shall consider HUBZone set-asides before considering HUBZone sole source or other small business set-asides

FAR 19.1405(a) – CO may set-aside requirement for competitive SDVOSB

13 CFR 126.607(b) – if 13 CFR 126.605 does not apply, CO shall set-aside for HUBZone, 8(a), or SDVOSB before setting aside as small business set-aside

13 CFR 26.605(b) – may not make available for a HUBZone if requirement is currently being performed under the 8(a) program or if SBA has accepted requirement into 8(a) program, unless SBA consents to release from the 8(a) program.

Parity (AFTER Small Business Jobs Act of 2010)

FAR 19.800(e) – Before deciding to set aside an acquisition in accordance with subpart 19.5, the contracting officer may consider offering the acquisition to a small business under the 8(a) Program in accordance with 19.203

FAR 19.1305(a) – CO may set aside acquisitions exceeding the micro-purchase threshold for competition restricted to HUBZone small business concerns and shall consider HUBZone set-asides before considering HUBZone sole source awards or small business set-asides

FAR 19.1405(a) – CO may set-aside acquisitions exceeding the micro-purchase threshold for competition restricted to SDVOSB concerns and shall consider SDVOSB set-asides before considering SDVOSB sole source awards or small business set-asides

FAR 19.1505(a) - CO may set-aside acquisitions exceeding the micro-purchase threshold for competition restricted to EDWOSB or WOSB concerns eligible under the WOSB Program in those NAICS codes in which SBA has determined that WOSB concerns are underrepresented or substantially underrepresented in Federal procurement, as specified on SBA's Web site at http://www.sba.gov/WOSB

Relationship Among SB Programs (as of 24 Jul 11)

FAR 19.203(a) - There is NO order of precedence among the 8(a) Program, HUBZone Program, SDVOSB Program, or the WOSB Program

FAR 19.203 (b) - At or below the simplified acquisition threshold. The requirement to exclusively reserve acquisitions for small business concerns at does not preclude the contracting officer from awarding a contract to a small business under the 8(a) Program, HUBZone Program, SDVOSB Program, or WOSB Program.

FAR 19.203 (c) - Above the simplified acquisition threshold. The CO shall FIRST consider an acquisition for the 8(a), HUBZone, SDVOSB, or WOSB programs BEFORE using a small business set-aside. However, if a requirement has been accepted by the SBA under the

8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release in accordance with 13 CFR parts 124, 125 and 126.

FAR 19.203 (d) - Small business set-asides have priority over acquisitions using full and open competition.

Woman Owned Small Business Set-Aside History

1994 – Overall goal of 5% goal set for WOSB December 2000 - Congress passed the "Equity in Contracting for Women

Act of 2000“ to allow contracts, in industries historically underrepresented by WOSB, to be reserved for competition by WOSB

October 2004 – SBA had not completed the required study or the regulations required to implement the program and US Woman’s Chamber of Commerce brought suit against the SBA

December 2005 – SBA filed motion to dismiss but Court denied March 2006 – SBA notified court it would complete disparity study within 9

months December 2006 - SBA published proposed rule February 2007 – US Woman’s Chamber of Commerce petitioned court for

a status report from SBA April 2007 – Rand Corporation study on Utilization of Woman Owned

Small Business in Federal Contracting released October 2007 - US Woman’s Chamber of Commerce asks court to hold a

status hearing

WOSB Set-Aside History cont’d

December 2007 – SBA publishes second proposed rule citing 4 underutilized industries and saying each agency must make a finding of discrimination

October 2008 – SBA publishes final rule but it was never implemented in FAR

July 2009 – President Obama proposes to implement Woman Owned Small Business Contracting Program

March 2010 – SBA publishes new proposed rule citing 83 underutilized industries and eliminating the requirement for each agency to make a finding of discrimination . SBA also withdrew October 2008 rule.

May 2010 - U.S. Senators Olympia J. Snowe and Kirsten Gillibrand introduce the Fairness in Women-Owned Small Business Contracting Act of 2010 to address deficiencies in the SBA WOSB contracting program

WOSB Set-Aside Last year at this conference I told you that after16 years of the goal being

set, there are still no provisions which allow for a WOSB set-aside

Today we have FAR 19.1505(a) - CO may set-aside acquisitions exceeding the micro-purchase threshold for competition restricted to EDWOSB or WOSB concerns eligible under the WOSB Program in those NAICS codes in which SBA has determined that WOSB concerns are underrepresented or substantially underrepresented in Federal procurement

CO may set-aside contracts for WOSB and EDWOSB if: NAICS code is in an industry which SBA has assigned to program

Complete list of NAICS codes can be found at www.sba.gov/wosb There is reasonable expectation 2 or more will submit an offer Anticipated award price, including options, does not exceed the

statutory threshold of $5M for manufacturing or $3M for other contracts Contract can be awarded at fair market price

WOSB Set-Aside cont’d To be an eligible WOSB a company must:

Be a small business that is at least 51% percent unconditionally and directly owned and controlled by one or more women who are United States citizens

Have a woman manage the day-to-day operations, make long-term decisions for the business, hold the highest officer position in the business and work at the business full-time during normal working hours

To be an eligible EDWOSB, a company must: Be a WOSB that is at least 51% owned by one or more women who

are “economically disadvantaged” Have an economically disadvantaged woman manage the day-to-day

operations, make long-term decisions for the business, hold the highest officer position in the business and work at the business full-time during normal working hours.

A woman is presumed economically disadvantaged if she has a personal net worth of less than $750,000 (with some exclusions), her adjusted gross yearly income averaged over the three years preceding the certification less than $350,000, and the fair market value of all her assets is less than $6 million.

WOSB Set-Aside cont’d There are two ways to certify for the WOSB program

Self certification and third party certification Both require supporting documentation (which is different from other

self certification programs) Supporting documentation includes: Copies of birth certificates, naturalization papers or unexpired

passports for owners who are women For LLC’s: articles of organization and any amendments and operating

agreement Copy of joint venture agreement if applicable For corporations: articles of incorporation and any amendments, by-

laws and any amendments, all issued stock certificates, stock ledger, and voting agreements if any

For partnerships: partnership agreement and any amendments Assumed/fictitious name (doing business as) certificates Copy of WOSB Program Certification For EDWOSB, in addition to above, SBA Form 13, Personal Financial

Statement and copy of WOSB Program Certification – EDWOSB instead of WOSB Program Certification

Copy of third party certification if applicable

WOSB Set-Aside cont’d

A WOSB/EDWOSB may submit an offer as a joint venture with another small business if the following are met: Combined annual receipts or employees must meet NAICS code

unless exception in 13 CFR 121.103(h)(3) applies EDWOSB/WOSB must be managing venturer EDWOSB/WOSB employee must be project manager responsible

for performance EDWOSB/WOSB must receive 51% of net profits Joint venture agreement must be in writing Joint venture must meet subcontracting limitations Joint venture agreement does not have to be approved by SBA

Updates to 8(a) Program (not all inclusive)

If disadvantaged individual owner(s) of an 8(a) called to active military status SBA will no longer terminate firm from the program Firms may elect to be suspended (time added to program term upon

return of individual) or continue to participate if another disadvantaged individual can control the firm

Joint venture agreement requirements tightened so that non-disadvantaged firms do not unduly benefit from 8(a) program

Joint venture agreement may be informal or formal but now it must be in writing regardless of which it is

Joint venture can be unpopulated or populated (own separate employees) Each have their own set of rules

Joint venture can submit as many proposals over a 2 year period that it wants but no more than 3 contracts awarded over 2 year period Previously joint venture could only submit 3 proposals and then have

to form another joint venture

Updates to 8(a) Program (not all inclusive) cont’d

8(a) firm many have a bona fide place of business in more than one location (competitive construction efforts) Participant must submit request for a business determination to

SBA district office servicing the firm SBA district office serving the geographic area of that location must

determine if that location qualifies Non-profit firms may now be mentors in SBA Mentor Protégé Program Mentors can have up to 3 protégés at a time Protégé can have second mentor corresponding to an unrelated

secondary NAICS code Firm cannot be a mentor and a protégé at the same time Assistance provided by mentor must be tied to the protégés SBA

approved business plan Mentor Protégé Agreement must be approved by SBA before firms

can submit joint venture offer

Updates to 8(a) Program (not all inclusive) cont’d

SBA approved mentor protégé joint ventures are small businesses for DOE subcontracts (DOE only)

If a mentor protégé agreement is declined by the SBA, there is a specific reconsideration process required

If a mentor does not provide agreed to assistance there are consequences SBA may terminate the agreement Mentor is ineligible to participate for 2 years SBA may recommend a stop work order for each contract the

mentor and protégé are performing on as a joint venture and where they have receive the exclusion from affiliation

SBA may authorize substitution of the protégé firm for the joint venture

Failure to provide the agreed upon assistance may constitute grounds for government wide suspension or debarment

Recap of Delex Case Aug 03, Navy awarded multiple award, IDIQ contract to eight firms –

four LB and four SB. Ceiling was $3B with eight year ordering period

Contract awardees all had right to compete for delivery orders. Navy reserved the right to solicit individual delivery orders on small business set-aside basis to meet Commander’s small business goals

22 May 08 delivery order RFP issued as small business set-aside and later changed to full and open competition

Delex complained to the Navy and received negative response from contract Ombudsman. Delex filed GAO protest.

Navy contends FAR 19.502-2(b), which sets forth Rule of Two, does not apply to delivery orders. Navy view was that set-aside requirements apply only to initial contract awards

Recap of Delex Case cont’d GAO sustained Delex protest

Rule of Two applies to all acquisitions over $100,000 Task orders are properly viewed as acquisitions Rule of Two applies to task orders Task orders must be set-aside for SB’s when reasonable

expectation of receipt of two or more proposals and award can be made at fair and reasonable price

Set-aside, or not, determinations must be adequately supported

GAO decisions not binding on Federal Agencies without one of the following: FAR Interim Rule Office of the Secretary of Defense (OSD) Policy Memo Office of Federal Procurement Policy (OFPP) Policy Memo

11 Feb 08 Army Office of Legal Counsel issued memo to DoD Office of Legal Counsel proposing FAR revision that states Rule of Two does not apply to task and delivery orders of DoD multiple award contracts

Recap of Delex Case cont’d

As of last year’s conference we had no guidance since November 2008 timeframe Delex case is being discussed with the legal communities

Department of Justice May 2010 “Hot Topics: What’s New in Acquisition” presentation states nothing new on this topic

Business as usual with sound determinations in the contract file when a task order is not set aside to small business contract holders

That is where we stood last year at this time and that is where we stand this year at this time

Multiple Award Contracts Small Business Jobs Act of 2010 was signed 27 Sep 10

Part III – Acquisition Process, Section 1331 amended the Small Business Act and stated Not later than one year after the enactment of this subsection,

OFPP and SBA shall establish guidance under which a Federal Agency may, at their discretion, Set aside part or parts of a multiple award contract for small

business concerns, including subcategories of small business concerns

Notwithstanding the fair opportunity requirements, set aside orders placed against multiple award contracts for small business concerns, including subcategories of small business concerns

Reserve 1 or more contract awards for small business concerns under full and open multiple award procurements, including subcategories of small business concerns

Multiple Award Contracts cont’d Two slides ago I said :

Business as usual with sound determinations in the contract file when a task order is not set aside to small business contract holders and

That is where we stood last year at this time and that is where we stand this year at this time

Although there has been a lot of email traffic and a lot of talking this over, there is no FAR Interim Rule Office of the Secretary of Defense (OSD) Policy Memo Office of Federal Procurement Policy (OFPP) Policy Memo

So……we are still waiting to see what happens and we are continuing to document our contract files when we do not have a task order small business set-aside

Update on HUBZone Program

March 2009: House Committee on Small Businesses reviewed HUBZone Program HUBZone program was not only dysfunctional, it was riddled with

fraud Chairwoman Rep. Nydia Velázquez, recommended this program be

scrapped SBA did not want program dropped; prefers additional oversight to

correct the problems SBA put new leadership in charge of the HUBZone office

Still problems but SBA says they are getting better Legacy initiatives closed out with site visits and recertifications More than 1200 site visits Approximately 5000 exam letters processed Required firms to sign under penalty of perjury that they remain

eligible or be decertified Approximately 70% remain certified As of 11 May 11 approximately 606 cases in the application pipeline

Update on HUBZone Program cont’d

FY11 Goals Focus on timeliness of applications for initial certification

Maximize percentage under 90 days Enhance regulations and policies

Refine regulationsUpdate policiesRevamp standard operating proceduresConfirm certification annually rather than every 3 years

Upgrade infrastructureCreate best staff possibleUpgrade maps technologyExtensive proactive monitoring

Future Goals Requiring all firms to attest in writing under penalty of perjury they

remain eligible Full document reviews on all certified firms Collection and review of documentation to verify eligibility at time of

contract bid and/or award Unannounced site visits by Field Operations Staff to verify principal

office criterion

Any Questions?