HUBZone Program First Wednesday Virtual Learning Series 2018

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1 HUBZone Program First Wednesday Virtual Learning Series

2 Hosts Christopher Eischen, Procurement Center Representative SBA Office of Government Contracting, Area IV, Kansas City, MO (816) Deborah Crumity, Procurement Center Representative SBA Office of Government Contracting, Area IV, Rock Island Arsenal (309)

Welcome to SBA Virtual Learning 2018 1. Questions answered during the final 10 minutes. 2. Technical problems: Contact the moderator with a note or call AT&T Connect Support at 1-888-796-6118. 3.

3 Welcome to SBA Virtual Learning Questions answered during the final 10 minutes. 2. Technical problems: Contact the moderator with a note or call AT&T Connect Support at Page numbers stated for those working off hard copies of the program. 4. We cover the SBA Quick Reference as time allows. 5. For more SBA training visit the SBA Learning Center website 3

4 Association of Procurement Technical Assistance Centers (APTAC) Procurement Technical Assistance Centers are a vital resource partner. APTAC posts past First Wednesday programing at this link: Contracting officer resources: How PTACs partner with federal agencies : Find your nearest Procurement Technical Assistance Center at 4

5 1st WEDNESDAY VIRTUAL LEARNING SERIES 2018 SCHEDULE 1:00 to 2:00 Central Time FY 2018 Date Topic 1 October 4, 2017 Non-Manufacturer Rule 2 November 1, 2017 About SBA 3 December 6, 2017 SBA Programs You May Not Know About Natural Resources Assistance/Disaster Assistance 4 January 10, 2018 Historically Underutilized Business Zones 5 February 7, 2018 Certificate of Competency Program 6 March 7, 2018 Woman Owned Small Business 7 April 4, 2018 Size and Affiliation 8 May 2, 2018 Subcontracting Tools 9 June 6, 2018 SDVOSB 10 July 11, 2018 SBA Legislative Update 11 August 1, 2018 Mentor/ Protégé Program The program schedule above is for information only and is subject to change. 5

6 One Continuous Learning Point Self-service: Using the PowerPoint that was sent with your invitation for this training event, fill in your name on the certificate slide and save. Download the certificate and print for your records. You submit your request for training credit IAW your agency policy, i.e. FAITAS. Phoning in only: If you listen in groups and you want all attendees to be included on the future mailing list, send addresses of participants in an excel document to 6

7 Speaker Mariana Pardo, Director HUBZone Program Washington, DC Mark Hagedorn, Attorney Advisor Office of General Counsel Washington, DC 7

8 HUBZone Program First Wednesday Virtual Learning Series

9 Historically Underutilized Business Zone Program 13 CFR part 126 FAR subpart

10 Agenda PROGRAM OVERVIEW HUBZONE SET-ASIDES AND SOLE SOURCE AWARDS SET ASIDE OF ORDERS HUBZONE PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITION LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE 10

11 OVERVIEW 11

12 SBA Administers the HUBZone Program Status as a HUBZone small business concern (SBC) is determined by SBA, pursuant to 13 CFR part 126 A firm must apply to SBA for HUBZone certification (13 CFR to ) If SBA determines that a concern is a HUBZone SBC, SBA will issue a certification to that effect and will add the concern to the List of Qualified HUBZone Small Business Concerns at Only firms on the List are HUBZone SBCs and eligible for HUBZone contracting preferences and awards 12

13 HUBZone Contracts (13 CFR ) HUBZone contracts (including Multiple Award Contracts) include awards to qualified HUBZone SBCs through: Sole source awards 100% HUBZone set-aside awards and partial set-asides Full and open competition, where the HUBZone price evaluation preference is applied Reserves for HUBZone SBCs under Multiple Award Contracts (MAC) Orders set-aside for HUBZone SBCs against a MAC, where the MAC was awarded in full and open competition 13

14 Requirements to Bid on HUBZone Contract (13 CFR ) When a HUBZone SBC submits its initial offer on a specific HUBZone contract, it must certify to the CO that: It is a certified HUBZone SBC that appears on SBA s List; There has been no material change in its circumstances that could affect its HUBZone eligibility since the date of HUBZone certification; It is a small business under the NAICS code assigned to the procurement; and It will attempt to maintain the required percentage of employees who are HUBZone residents during the performance of a HUBZone contract. 14

15 Status as a HUBZone Small Business Concern To be eligible for a HUBZone contract, a concern must be a HUBZone SBC both at the time it submits its initial offer AND at the time of contract award (13 CFR (c)) A HUBZone SBC may joint venture with one or more other small business concerns or its SBA-approved mentor for the purpose of submitting an offer for a HUBZone contract. Note: The joint venture itself need not be certified as a qualified HUBZone SBC. 15

16 How to Locate HUBZone Contractors Using the Dynamic Small Business Search (DSBS) 16

17 DSBS How HUBZone Certification is Displayed Each firm s DSBS profile has two fields relevant to HUBZone certification: HUBZone Certified? [ ] Yes [ ] No HUBZone Certification Date "HUBZone Certified? [X] Yes [ ] No indicates the firm is currently HUBZone certified "HUBZone Certified? [ ] Yes [X] No indicates the firm is NOT currently HUBZone certified "HUBZone Certified? [ ] Yes [X] No with N/A next to HUBZone Certification Date means that the firm was never HUBZone certified NOTE: HUBZone Certification Date indicates the initial date of certification and does not reflect the dates of any recertification process, which are internal to SBA An approval or recertification letter is NOT valid evidence that a firm is currently HUBZone certified, because the firm may have been decertified since the notice was issued. 17

18 DSBS example: Currently Certified HUBZone Small Business 18

19 DSBS example: Decertified HUBZone Small Business 19

20 DSBS example: Non-HUBZone Small Business 20

21 Relationship Among Small Business Programs (FAR ) SBA s small business socioeconomic programs include: 8(a) Program HUBZone Program Service-Disabled Veteran-Owned (SDVO) Small Business Program Women-Owned Small Business (WOSB) Program There is no order of precedence among these programs In determining which socioeconomic program to use, the contracting officer should consider, at a minimum Results of market research Agency progress in fulfilling small business goals 21

22 HUBZones and Parity B E L O W O R A T S A T ( $ 3, $ 1 5 0, ) The 2018 NDAA raised the micropurchase threshold to $10,000 and the simplified acquisition threshold to $250,000. A B O V E S A T ( > $ 1 5 0, ) Acquisition is automatically reserved exclusively for small business CO may award as: small business set-aside 8(a) set-aside HUBZone set-aside SDVO set-aside WOSB set-aside Acquisition must be set-aside for small business. Before awarding as small business setaside, CO must first consider awarding as 8(a) set-aside (or sole source) HUBZone set-aside (or sole source) SDVO set-aside (or sole source) WOSB set-aside (or sole source) EXCEPTION: Once 8(a), always 8(a) rule - If a requirement has been accepted by SBA under the 8(a) Program, it must remain in the 8(a) Program unless SBA agrees to its release. 22

23 HUBZONE SET-ASIDES AND SOLE SOURCE AWARDS 23

24 HUBZone Set-Aside Procedures (13 CFR , FAR ) Below SAT CO MAY award via HUBZone set-aside Above SAT CO SHALL consider a HUBZone set-aside before considering a HUBZone sole source award or a small business set-aside To award via HUBZone set-aside, CO must have a reasonable expectation that Offers will be received from 2+ HUBZone SBCs; and Award will be made at a fair market price 24

25 HUBZone Set-Aside Only One Offer or No Offers (FAR (c)) If the CO receives only one acceptable offer from a certified HUBZone SBC the CO should make an award to that concern no acceptable offers from HUBZone SBCs the CO should withdraw the HUBZone set-aside and set the procurement aside for small business concerns, as appropriate (see FAR ) 25

26 Check for FAR inflation change HUBZone Sole Source Awards (13 CFR , FAR ) CO may award a sole source contract to a HUBZone SBC (before considering a small business set-aside) if CO does not expect to receive offers from at least 2 HUBZone SBCs The acquisition is greater than the SAT Anticipated price of the contract (including options) will not exceed $7 M for a requirement assigned a manufacturing NAICS code; or $4 M for all other requirements The requirement is not currently being performed by an 8(a) participant and has not been accepted as an 8(a) requirement by SBA The HUBZone SBC has been determined to be a responsible contractor with respect to performance Award can be made at a fair and reasonable price SBA has the right to appeal CO s decision not to make a HUBZone sole source award 26

27 SET ASIDE OF ORDERS 27

28 Set-Aside of Orders A CO may Set-aside an order placed against a multiple-award contract for HUBZone SBCs (FAR 19.5) and no justification for this exception to fair opportunity is required (FAR 16.5) Set-aside part(s) of a multiple-award contract for HUBZone SBCs (FAR 19.5) Reserve one or more contract awards for HUBZone SBCs under full and open multiple-award procurements (FAR 19.5) Set-aside orders & BPAs under the GSA Schedule (FAR 8.4) 28

29 Set-Aside of Orders FAR Part 19 Applies FAR (b)(2)(i)(F): When setting aside orders for small business concerns: The specific small business program eligibility requirements identified in part 19 apply. FAR (a)(2): When setting aside orders and BPAs against the GSA Schedule: The specific small business program eligibility requirements identified in part 19 apply. What does this mean? Examples: HUBZone joint venture requirements apply HUBZone limitations on subcontracting apply 29

30 HUBZONE PRICE EVALUATION PREFERENCE (PEP) 30

31 Price Evaluation Preference For HUBZone SBCs (13 CFR , FAR ) The HUBZone price evaluation preference (PEP) shall be used in acquisitions conducted using full and open competition The preference shall NOT be used Where price is not a selection factor (e.g., Architect/Engineer acquisitions) Where all fair and reasonable offers are accepted (e.g., the award of multiple award schedule contracts) HZ PEP only applied in F&O, including on nonreserved portion or non-set-aside portion 31

32 Applying the HUBZone PEP The CO shall apply the HUBZone PEP in F&O competition, when the lowest, responsive, responsible offeror is a large business The PEP is applied by adding a factor of 10% to The otherwise lowest, responsive, responsible offer from a large business (AKA the large business that is the apparent successful offeror) Offers from HUBZone SBCs that have waived the PEP Offers from small business concerns that are not the apparent successful offeror NOTE: If PEP waived, then not submitting offer as HZ SBC and do not need to meet LOS or NMR NOTE: Apply PEP first, then do best value analysis 32

33 Price Evaluation Preference Examples OFFER: HUBZone $113 Small $103 Large $100 PEP APPLIED (*10%): HUBZone $113 Small $113.3 Large $110 Before PEP applied, the large business is the lowest, responsive and responsible offeror. After applying the 10% PEP, the large business is still the lowest, responsive and responsible offeror. In this example, the application of the PEP does not benefit the HUBZone SBC. NOTE: If price equal Award to the HZ SBC 33

34 Price Evaluation Preference Examples OFFER: HUBZone $100 Small $97 Large $95 PEP APPLIED (*10%): HUBZone $100 Small $106.7 Large $104.5 Before PEP applied, the large business is the lowest, responsive and responsible offeror. After applying the 10% PEP, the large business is no longer the lowest, responsive and responsible offeror. In this example, the application of the PEP does benefit the HUBZone SBC. 34

35 OFFER: Price Evaluation Preference Examples HUBZone $100 Small $95 PEP NOT APPLIED Large $97 Before PEP applied, the small business is the lowest, responsive and responsible offeror. Since lowest offeror is not a large business, the HUBZone PEP is not applied. 35

36 LIMITATIONS ON SUBCONTRACTING AND NONMANUFACTURER RULE (NMR) 36

37 Limitations on Subcontracting (LOS) Final Rule published at 81 FR Effective June 30, 2016 A HUBZone SBC prime contractor may subcontract part of a HUBZone contract, provided the HUBZone SBC meets the following requirements: Services (except construction) Spend no more than 50% of the value of the prime contract on subcontractors that are not HUBZone SBCs General Construction Spend no more than 85% of the value of the prime contract on subcontractors that are not HUBZone SBCs Cost of materials are excluded Supplies (from a manufacturer) Spend no more than 50% of the value of the prime contract on subcontractors that are not HUBZone SBCs Special Trade Construction Spend no more than 75% of the value of the prime contract on subcontractors that are not HUBZone SBCs Cost of materials are excluded NOTE: Subcontractors that are also HUBZone SBCs are referred to as similarly situated entities 37

38 Nonmanufacturer Rule (NMR) (13 CFR , FAR ) A HUBZone SBC may submit an offer for supplies as a nonmanufacturer if it meets the requirements of the NMR set forth at 13 CFR (b)(1) In 2016, SBA eliminated the requirement that the manufacturer also be a HUBZone SBC (81 FR 34243) Under SBA regulations, A CO may now request a waiver of the NMR for a HUBZone contract Class waivers also apply to HUBZone contracts As a result, the HUBZone program s treatment of the NMR is now consistent with SBA s other socioeconomic programs For HUBZone contracts at or below $25,000, a HUBZone SBC may supply the end item of any domestic manufacturer. This means the manufacturer may be a large business, but the product acquired must be manufactured or produced in the U.S. 38

39 Compliance With LOS & NMR When do the HZ LOS and NMR apply? HUBZone set-asides Partial HUBZone set-asides HUBZone reserves Orders set-aside for HUBZone SBCs Awards to HUBZone SBCs under F&O after HZ PEP applied What is the compliance period? Set aside (full or partial): Base term and each subsequent option period HOWEVER, CO may require concern to meet the LOS or NMR for each order Order set-aside under F&O: Term of order 39

40 Questions 40

42 Dynamic Small Business Search 42

43 Summary of CFR Regulations SBA Size Regulations 13 CFR Part 121 HUBZone Regulations 13 CFR SBA Certificate of Competency 13 CFR Service-Disabled Veteran 13 CFR (b) 8(a) and SDB Regulations 13 CFR Small Disadvantaged Business 13 CFR (f) WOSB Program 13 CFR 127 SBA Prime Contracting 13 CFR SBA Subcontracting 13 CFR

44 Types of SBA Contacts and Offices A. SBA Government Contracting Area Offices 1. SBA Procurement Center Representatives (PCRs) 2. SBA Commercial Market Representatives (CMRs) B. SBA District Offices 1. Business Opportunity Specialists (BOS) C. SBA Regional Offices D. SBA Headquarters 44

45 Six SBA Government Contracting Areas SBA Government Contracting Areas at hyperlink: 45

46 A. SBA Quick Reference - SBA Area Offices 1. Size protests (with recertification) FAR CFR CFR Locating nearest SBA staffer FAR Certificate of Competency FAR CFR COC Limitations on Subcontracting Compliance FAR CFR 125.6(f) 5. Receiving copies subcontracting plans FAR

47 B. SBA Quick Reference - SBA Procurement Center Representatives(PCRs) FAR Small Business Administration procurement center representatives. (a)(1) The SBA may assign one or more procurement center representatives to any contracting activity or contract administration office to carry out SBA policies and programs (2) If a SBA procurement center representative is not assigned to the procuring activity or contract administration office, contact the SBA Office of Government Contracting Area Office.. (b) Upon their request and subject to applicable acquisition and security regulations, contracting officers shall give SBA procurement center representatives.access to all reasonably obtainable contract. 47

48 B. SBA Quick Reference SBA PCRs, cont. 1. SBA PCR coordination records FAR (b) 13 CFR Small business set-aside appeals FAR CFR 125.2(b)(7) 3. HUBZone set-aside appeals FAR FAR CFR SDVOSB set-aside appeal FAR FAR CFR Reporting bundling to SBA (MATOCs) FAR (e)(1) 13 CFR SBA subcontracting plan reviews-copies FAR (3) 13 CFR 125.2(b)(6)(iii) FAR (c) 13 CFR 125.2(b)(6)(iii)(C) 7. SBA subcontracting program review FAR (4) 13 CFR 125.2(b)(6)(iii)(C) 8. Small business TFD FAR (e)(4)) (Termination for default) 9. Surveillance review of agency contracting FAR (c)(5) 48

49 Small Business Coordination Forms Sent To SBA PCRs Agency Form Title 1 Commerce CD 570 Small Business Set-aside Review 2 Defense 2579 Small Business Coordination Record 3 Energy Small Business Review Form 4 GSA 2689 Small Business Analysis Record 5 HHS 653 Small Business Review Form 6 Homeland Security Small Business Review Form 7 Interior 1886 Acquisition Screening and Review Form 8 Labor DL Small Business Procurement Determination 9 NASA NF 1787 Small Business Review Sheet 10 State DS-1910 Small Business Clearance Form 11 Transportation 4250 Small Business Program Review Form 12 USDA AD VA 2268 Small Business Program Procurement Review Procurement Request Review For Small Business Programs and Contract Bundling

50 Document that you have provided SBA Area Directors with copies of subcontracting plans Postaward responsibilities of the contracting officer. : (a) Notifying the SBA of the award by sending a copy of the award document to the Area Director, Office of Government Contracting, in the SBA area office where the contract will be performed. (c) Giving to the SBA procurement center representative.a copy of (1) Any subcontracting plan submitted in response to a sealed bid solicitation; and (2) The final negotiated subcontracting plan that was incorporated into a negotiated contract or contract modification. (d) Notifying the SBA procurement center representative. of the opportunity to review subcontracting plans in connection with contract modifications.

51 C. SBA Quick Reference - SBA Commercial Market Representatives (CMRs) link at: 1. Prime contractor portfolio management 13 CFR Reviews of subcontracting plan holders 13 CFR Matchmaking 13 CFR SBA SUB-Net link at: 5. SBA Subcontracting Opportunities Directory link at: 6. SBLO Handbook link at:

52 D. SBA Quick Reference SBA Regional and District Offices Link to district offices at:

53 D. SBA Quick Reference - SBA District Offices, cont. To locate SBA 8(a) business development servicing office, check Dynamic Small Business Search at the link: and then local resources at the link

54 E. SBA Quick Reference - SBA Headquarters 1. HUBZone status protests FAR CFR NAICS code appeal FAR CFR Non-manufacturer rule waivers FAR (f)(1)-(7) 13 CFR SDVOSB status protest FAR CFR WOSB Program status protest FAR /13 CFR

55 FAR (f ): No class waiver to NMR? Check out an individual waiver*

56 NMR Waiver Notes: If you find no class waivers, an SBA individual waiver to the Nonmanufacturer Rule (NMR) may help you to achieve small business goals if: ind no class waivers, an SBA individual waiver to th e A WAIVER FOR A SET-ASIDE IS NOT NEEDED WHEN: 1. ONE SMALL BUSINESS MANUFACTURER: * SMALL BUSINESS SET-ASIDE 2. SMALL BUSINESS MANUFACTURER, BRAND SPECIFIC OF ANY DOLLAR SIZE WITH FAR 6 JUSTIFICATION: * SMALL BUSINESS SET-ASIDE 3. LARGE BUSINESS, BRAND SPECIFIC (OR BRAND EQUIVALENT) REQUIREMENT $25,000 OR LESS WITH FAR 6: * SMALL BUSINESS SET-ASIDE GSA SCHEDULE: USE THE CLOSEST CODE LISTED ON THE SCHEDULE. THEN SAME AS ABOVE IF NO CLASS WAIVER. EXCEPTION TO NMR IF PROCUREMENT $25,000 OR LESS.* (FAR (f)(7)(b)) *NOTE: THE FAR HAS NOT BEEN UPDATED TO AGREE WITH THE SBA S CHANGE IN MAY 2016 TO $150K OR LESS IN 13 CFR small business goals if*:

57 NMR Program Office The preferred and most expeditious method for asking questions and submitting waiver requests is by to

58 Find your PCR at

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