3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

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1 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

2 From Finding a Mentor to Building a Strong Relationships Moderator: Stanley Jones Jr. Director Office of Management and Technical Assistance

3 Mentor Protégé Success The Relationship Formula 3 rd Annual Mentor-Protégé Program Conference October

4 TOPICS Introduction Long Engagement Opportunity Born From Relationships Mutual Give and Take Trust Success! Resources 4 3 rd Annual Mentor-Protégé Program Conference - October 2017

5 INTRODUCTION A long time ago in a galaxy far, far away. 5 3 rd Annual Mentor-Protégé Program Conference - October 2017

6 INTRODUCTION Background Check o o o Compatible products / services Industry Reputation Current Contracts fpds.gov; SBA SubNet Prequalification o o o o o o Tax ID, DUNS Registration in SAM (formerly CCR) Applicable NAICS Codes Relevant Past Performance Bonding Financial Capacity to Perform Work 6 3 rd Annual Mentor-Protégé Program Conference - October 2017

7 LONG ENGAGEMENT Getting to Know You It Takes Time o o o o o You can t win if you don t bid Engage, engage, engage Debriefs win or lose - opportunities for improvement Track performance Win percentage Competitive Price Point Consistent Execution Value Adds and Innovation Stay connected 7 3 rd Annual Mentor-Protégé Program Conference - October 2017

8 OPPORTUNITY BORN FROM RELATIONSHIPS Now that we know each other a little better o o o Mutually Aligned Same business objective and ethics Performance Metrics Complement Each Other Identify who will benefit? Engage Customers Does the partnership work for them? What is the additional value add of a mutual partnership for the customer? Everyone brings something to the table New Customers Capacity to perform: larger more complex projects Expand current market What is the best approach? U. S. Small Business Administration DOD or Other 8 3 rd Annual Mentor-Protégé Program Conference - October 2017

9 MUTUAL GIVE AND TAKE - TRUST Mentor Protégé Agreement o What are the needs of the Protégé? o o o o o o o Management and Technical Financial Contracting Trade Education Business Development General and Administrative Schedule for Implementation and Training Business Development and Marketing Plan Organizational Structure Administrative Management Process for Communication and Reporting Schedule for Deliverables Compliance with Federal Regulations 9 3 rd Annual Mentor-Protégé Program Conference - October 2017

10 MUTUAL GIVE AND TAKE - TRUST Meet with SBA as a Team Keep SBA in the loop Strategically Approach Joint Venture Agreements Track performance Communicate Openly Meet and follow-up regularly Revisit the MPA 10 3 rd Annual Mentor-Protégé Program Conference - October 2017

11 SUCCESS! SBA Baltimore cites the Donley-Kirlin team as the Gold Standard for Mentor Protégé relationships Customer satisfaction and continued exemplary performance on over 500 projects All Small Mentor Protégé Program 11 3 rd Annual Mentor-Protégé Program Conference - October 2017

12 REFERENCES Reference Website U. S. Small Business Administration Federal Procurement Data System Subcontracting Opportunities SBA Dynamic Small Business Database SBA Sub-Net rd Annual Mentor-Protégé Program Conference - October 2017

13 3 rd Annual Mentor-Protégé Program Conference - October 2017 Here to help: Lisa C. King Administrator Contracts and Small Business Subcontractors prequal@jjkllc.com THANK YOU! Small Business is a critical part of our success! 13

14 From Finding a Mentor to Building a Strong Relationships Paul Sanchez President/CEO, Government Tactical Solutions (P) Jeremy Wensinger Chief Operating Officer, Peraton (M) Raul Pandhi President, Collabralink Technologies, Inc. (P) Joshua Rubin Chief Growth Officer, Sevatec, Inc. (M)

15 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

16 Surety Bond Program Peter Gibbs Deputy Director Office of Surety Guarantees

17 We Open Doors to Bonding for Small Business SBA s Surety Bond Guarantee Program 8(a) MPA Conference October 12, 2017

18 We Open Doors to Bonding New to the contract bonding process? GC bonding all of your projects? Bonded, but need higher bond limits? Posting collateral or using funds control to get bonding? Paying more than 4%?

19 The Small Business Struggle Commercial and license or permit bonds differ from contract bonds. Contract surety bonds are a form of credit. Each bond constitutes a financial obligation for the contractor and the surety. Sureties underwrite each bond request for sufficient capital, credit and capacity at the time of application. Small businesses may struggle to qualify for bonding due to limited capital, credit or capacity.

20 The SBA Advantage! Available balance on business bank line of credit counted as additional available working capital! Available Working Capital + Available BLOC = More Bonding Capacity Total bonding capacity typically double that of traditional surety! Exceptions to financial statement requirements available! SBA accepts financial statements based on contract amount

21 Contract Bonds & What They Do A Bid Bond guarantees that you will supply the required performance and payment bonds to secure the contract on award. A Performance Bond guarantees that you will successfully complete the project in accordance with contract terms and conditions. A Payment Bond guarantees that you will pay all subcontractors and labor and material suppliers for their work on the job. A Maintenance Bond guarantees that you will remedy any defects in workmanship or materials within a specified time period following job completion, usually one to two years.

22 Why are Surety Bonds Required? To ensure that contracts are properly completed, protecting the project owner, subcontractors, and labor and material suppliers Federal Government Construction contracts greater than $150,000 under provisions of the Miller Act Requirements vary on non-construction contracts State, County & Local Governments Similar to federal, but with differing limits, referred to as Little Miller Acts Private Sector Many private sector owners require surety bonds Bond requirements vary, so check your project specifications!

23 Mentor/Protégé Agreements and Bonding Proprietorships, partnerships, corporations, associations, or joint ventures are eligible if they meet other eligibility requirements. The business must be a for profit entity. A cooperative is eligible if it carries on a business activity that produces monetary benefits for its members.

24 Pre-Qualification & Bonding Capacity Becoming bondable is similar to the process of obtaining bank credit - setting up initial bonding with a surety agent may take a few weeks Pre-qualifying means knowing what your bonding capacity will be before bidding or negotiating Use to obtain bonding capacity without a specific bond application Ask your agent for your capacity! Know Your Bonding Capacity Single contract limit (ex. $500,000) Total aggregate capacity bonded & unbonded (ex. $6,000,000)

25 Surety s Underwriting Focus Technical & Managerial Ability Past experience demonstrates ability to perform future projects Largest project Surety will bond is about two times largest successfully completed job Management controls & accounting Financial Statements Working capital, net worth, debt to equity ratio, profitability Quality financial statements CPA prepared financials typically required for $2 million & larger jobs Credit Resources Fair or better personal credit history Available credit with banks & suppliers

26 Working Capital = Bonding Capacity Measures your business s ability to meet current and future financial obligations Calculated from your balance sheet: Cash + A/R - Current liabilities Available working capital Available working capital X 10 = estimated bonding capacity without SBA SBA counts the available balance on bank lines of credit to increase your bonding capacity! Available working capital + available BLOC X 20 = estimated bonding capacity with SBA bond guarantees

27 Maximize Your Surety Credit! Retain Profits and Build Up Your Balance Sheet Increase working capital Increase net worth Decrease Debt/Net Worth Ratio Prepare Quality Financial Statements Better Financials = More Bonding Capacity Internal Year-end or CPA Compiled Year-end Qualify for jobs up to $2 Million CPA Reviewed Year-end Qualify for jobs $2 - $5 Million CPA Audited Year-end Qualify for jobs over $5 million It s an investment in your business!

28 SBA Surety Bond Guarantee Program SBA s guarantee to the surety allows small businesses to obtain bid, performance, payment & maintenance bonds not available elsewhere with reasonable terms SBA assists construction, service, supply & manufacturing firms, including: Start-ups & firms in business less than 3 years Firms with limited financial resources Firms with internal financial statements Firms with credit issues Firms wishing to increase largest job size Firms wishing to increase current bond limits Subcontract trades with desire to establish their own bonding

29 Eligibility - Step One: Size Business, including affiliates and subsidiaries, must be small See for size standards by NAICS code Construction, Service & Supply Firms Based on average annual revenues for the last three fiscal years: $7.5 Million limit for some services such as landscaping (561730) $15 Million limit for most specialty trades such as electrical (238210) $36.5 Million limit for most heavy construction such as highway, street and bridge (237310) Manufacturing Firms Based on number of employees: 500 Employee limit for most such as ornamental metal work (332323)

30 Participant Qualifications Business must be a US entity organized for profit. Principal must be legal US citizen or resident. Business and Principal must be eligible to do business with the federal government (not debarred). Business and Principal must not be involved in a current bankruptcy proceeding. SBG eligible immediately after discharge - surety requirements vary Business and Principal must be current on taxes and repayment agreements. Business must need a bid, performance, or payment bond and be unable to obtain it elsewhere with reasonable terms.

31 SBA Takes the Risk! Prior Approval & Preferred Programs 90% Guarantee 80% Guarantee Veteran & Service-disabled veteran owned firms All other small businesses Minority-owned businesses 8(a) and certified HUBZone firms All projects not exceeding $100,000

32 Does Your Contract Qualify? QuickApp for Jobs Up to $400,000 Two Page Application Decisions Within Hours No Financial Statements Required Up to $6.5 Million Any Contract Type Federal, State, Local, Private & GC Up to $10 Million on Federal Prime Contracts with Contracting Officer Certification to SBA HQ

33 What Do I Need to Apply? Business Financial Statements Last three fiscal year-ends 6 month interim Personal Financial Statements Principals and spouses Bank Reference Letter Bank line of credit Authorized banks & credit unions SBA Form Statement of Personal History Once, unless ownership changes SBA Form Application for Surety Bond Guarantee Assistance Each bond guarantee request Additional information may be required based on individual circumstances

34 Counting the Cost Bid Bonds Performance & Payment Bonds No Fee SBA Contractor s Fee.729% of the contract amount paid directly to SBA via Surety s Bond Premium 1.8% - 3% of the contract amount paid directly to your agent Ask your agent for your exact rate in each state Include both as total bond costs in your bid estimates & initial pay requests to ensure reimbursement.

35 The Application Process Small Business Contacts & Submits Application Package to Agent Issues Bonds to Small Business Authorized Agent Agent Submits Application to SBA Authorized Agent Evaluates & Submits Package to Surety Reviews Application & Provides Guarantee in Less than Two Days on Average! SBA Partner Surety Approves Bond & Requires SBA Guarantee

36 Program Partners 36

37 Locate an SBA Authorized Bond Agent Access SBA s List of Authorized Bonding Agencies: Ask your current agent to contact us if they wish to join the SBG Program as an authorized agent

38 We open doors to bonding SBG Program - Area Office Territories GU AK HI Seattle Area Office th Avenue #450 Seattle, WA M. Catharine Powers Area Director (206) catharine.powers@sba.gov Linda M. Laws Und/Marketing Specialist (206) linda.laws@sba.gov OR WA CA Servicing Small Businesses in: AK, AZ, CA, HI, ID, MT, ND, NE, NM, NV, OR, SD, UT, WA, WY & Guam NV ID MT UT AZ WY CO NM ND Jennifer Vigil Area Director (303) jennifer.vigil@sba.gov SD NE KS OK TX MN Denver Area Office th Street #426 Denver, CO IA MO AR LA WI IL MS Tamara E. Murray Und/Marketing Specialist (303) tamara.murray@sba.gov Servicing Small Businesses in: AL, AR, CO, IA, IL, IN, KS, KY, LA, MI, MN, MO, MS, OH, OK, TN, TX & WI MI IN OH PA TN AL KY GA WV FL SC NC VA NY NJ VT ME NH MA RI CT DE MD DC USVI PR DC Area Office 409 Third Street SW #8600 Washington, DC Earnest L. Knott, Jr. Area Director (202) earnest.knott@sba.gov Jennifer Bledsoe Und/Marketing Specialist (202) jennifer.bledsoe@sba.gov Servicing Small Businesses in: CT, DC, DE, FL, GA, MA, MD, ME, NH, NJ, NY, NC, PA, RI, SC, VA, VT, WV, Puerto Rico & Virgin Islands

39 Additional SBA Resources Loan Programs CAPLines & SBA Express - Lines of Credit SBA 7(a) Loans/Microloans/Community Advantage Loans/Export & Disaster Loans 8(a) Business Development Program Small Business Development Centers (SBDCs) Women s Business Centers (WBCs) Veteran Business Outreach Centers (VBOCs) Procurement Technical Assistance Centers (PTACs) U. S. Export Assistance Centers (USEACs) Service Core of Retired Executives Counseling Services (SCORE) Contact your local SBA District office or for additional information.

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41 We Open Doors to Bonding Obtain contract bonding for the first time Increase your bond limits Eliminate collateral or funds control Lower your rate to 4% or less

42 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

43 What Small Businesses Need to Know Moderator: Julie Clowes Deputy Director Washington Metropolitan Area District Office

44 What Small Businesses Need to Know Judith Stackhouse-Jordan Supervisory Small Business Specialist, GSA Janique Hudson Small Business Specialist, WHS Shannon Jackson Small Business Program Manager, DoD Donna Peebles Director Small Business Programs, NGB Michelle Street Deputy Director, OSDBU, HHS

45 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

46 Robb Wong Associate Administrator Office of Government Contracting and Business Development

47 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

48 New MP Legislation John Klein, SES Associate General Counsel Office of General Counsel Ken Dodds, SES Director Office of Policy Planning and Liaison

49 Kenneth Dodds & John Klein Small Business Administration October, 2017

50 SB 23 % Goal 24.34% 4th Consecutive year SDB 5% Goal 9.53% WOSB 5% Goal 4.79% SDVO 3% Goal 3.98% Highest Ever HUBZone 3% Goal 1.67%

51 Section 1651 National Defense Authorization Act of 2013 In the case of a contract for services, may not expend on subcontractors more than 50 percent of the amount paid to the concern under the contract In the case of a contract for supplies (other than from a regular dealer in such supplies), may not expend on subcontractors more than 50 percent of the amount, less the cost of materials, paid to the concern under the contract Similarly Situated Entities - Contract amounts expended by a covered small business concern on a subcontractor that is a similarly situated entity shall not be considered subcontracted SBA Final Rule 81 FR (May 31, effective June 30, 2016)

52 Exception to affiliation for certain joint ventures. (i) A joint venture of two or more business concerns may submit an offer as a small business for a Federal procurement, subcontract or sale so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract. 13 CFR (h)(3)

53 A qualified HUBZone SBC may submit an offer on a HUBZone contract for supplies as a nonmanufacturer if it meets the requirements of the nonmanufacturer rule set forth at of this chapter. 13 CFR (f)

54 (2) Every joint venture agreement to perform a contract set aside or reserved for small business between a protege small business and its SBA-approved mentor authorized by or of this chapter must contain a provision: (i) Setting forth the purpose of the joint venture; (ii) Designating a small business as the managing venturer of the joint venture, and an employee of the small business managing venturer as the project manager responsible for performance of the contract. The individual identified as the project manager of the joint venture need not be an employee of the small business at the time the joint venture submits an offer, but, if he or she is not, there must be a signed letter of intent that the individual commits to be employed by the small business if the joint venture is the successful offeror. The individual identified as the project manager cannot be employed by the mentor and become an employee of the small business for purposes of performance under the joint venture;

55 (iii) Stating that with respect to a separate legal entity joint venture, the small business must own at least 51% of the joint venture entity; (iv) Stating that each participant must receive profits from the joint venture commensurate with the work performed by the concern; (v) Providing for the establishment and administration of a special bank account in the name of the joint venture. This account must require the signature of all parties to the joint venture or designees for withdrawal purposes. All payments due the joint venture for performance on a contract set aside or reserved for small business will be deposited in the special account; all expenses incurred under the contract will be paid from the account as well;

56 (vi) Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available;

57 (vii) Specifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the small business partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the small business partner(s) to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available;

58 (viii) Obligating all parties to the joint venture to ensure performance of a contract set aside or reserved for small business and to complete performance despite the withdrawal of any member; (ix) Designating that accounting and other administrative records relating to the joint venture be kept in the office of the small business managing venturer, unless approval to keep them elsewhere is granted by the District Director or his/her designee upon written request;

59 (x) Requiring that the final original records be retained by the small business managing venturer upon completion of any contract set aside or reserved for small business that was performed by the joint venture; (xi) Stating that quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the joint venture's principals) must be submitted to SBA not later than 45 days after each operating quarter of the joint venture; and (xii) Stating that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 days after completion of the contract.

60 FAR Release for non-8(a) procurement. (a) Once a requirement has been accepted by SBA into the 8(a) program, any follow-on requirements shall remain in the 8(a) program unless there is a mandatory source (see or ) or SBA agrees to release the requirement from the 8(a) program in accordance with 13 CFR (d).

61 81 FR (12/23/16), Implements Section 1614 of NDAA of 2014, 15 USC 637(d)(16) Where the prime contractor has an individual subcontracting plan, the prime contractor shall establish two sets of small business subcontracting goals, one goal for the first tier and one goal for lower tier subcontracts awarded by other than small subcontractors with individual subcontracting plans. Under individual subcontracting plans the prime contractor shall receive credit for small business concerns performing as first tier subcontractors (first tier goal) and subcontractors at any tier pursuant to the subcontracting plans required under paragraph (c) of this section in an amount equal to the dollar value of work awarded to such small business concerns (lower tier goal). Other-than-small, lower tier subcontractors must have their own individual subcontracting plans if the subcontract is at or above the subcontracting plan threshold, and are required to make a good faith effort to meet their subcontracting plan goals. The prime contractor and any subcontractor with a subcontracting plan are responsible for reporting on subcontracting performance under their contracts or subcontracts at their first tier.

62 WOSB Certification by Federal agency, a State government, SBA, or national certifying entity approved by SBA Advance Notice of Proposed Rulemaking 80 FR (December 18, 2015) Comment Period closed February 16, RIN 3245-AG75

63 863 - Substantial bundling notice must be published at least 7 days before solicitation Non-manufacturer rule does not apply to contracts where principal purpose is acquisition of services or construction. Only applies where principal purpose is the acquisition of supplies.

64 867 The Agency shall consider past performance of all team members (JV or subs) for bundled or consolidated contracts, or multiple award contracts above the substantial bundling threshold for the agency (DOD $8 million, $6 million NASA/GSA/DOE, $2.5 million or more for all other agencies). Section SBA Scorecard 50% prime goals 20% subk goals, 10% number of SBCs awarded contracts, 20% OSDBU Section 15(k) duties

65 869 Authorizes petitions for reconsideration of industry size standards to SBA s Office of Hearings and Appeals Proposed Rule 81 FR (Oct. 7, 2016) OSDBU notice from SBC that solicitation unduly restricts the ability of SBCs SES Responsible for meeting subcontracting goals

66 DFAR proposed rule DOD may not preclude non-profit from competition for religious-related service contracts, including set aside contracts DOD may not award religious-related service contract 8(a), HUBZone, WOSB or SDVO sole source 81 FR (December 22, 2016)

67 (g) Past performance evaluations shall include an assessment of the contractor s (1) Performance against, and efforts to achieve, the goals identified in the small business subcontracting plan; and (2) Reduced or untimely payments made to small business subcontractors, determined by the contracting officer to be unjustified. The contracting officer shall (i) Consider and evaluate a contractor s written explanation for a reduced or an untimely payment when determining whether the reduced or untimely payment is justified; and (ii) Determine that a history of unjustified reduced or untimely payments has occurred when the contractor has reported three or more occasions of unjustified reduced or untimely payments under a single contract within a 12-month period. The following payment or nonpayment situations are not considered to be unjustified: (A) There is a contract dispute on performance. (B) A partial payment is made for amounts not in dispute. (C) A payment is reduced due to past overpayments. (D) There is an administrative mistake. (E) Late performance by the subcontractor leads to later payment by the prime contractor. 81 FR (December 20, 2016)

68 FAR (h) (1) Agencies shall ensure information is accurately reported in the FAPIIS module of CPARS within 3 calendar days after a contracting officer-- (vi) Determines that a contractor has a history of three or more unjustified reduced or untimely payments to small business subcontractors under a single contract within a 12-month period (see (g)(2)).

69 (1) Requiring prime contractors to make good faith efforts to utilize their proposed small business subcontractors during performance of a contract to the same degree the prime contractor relied on the small business in preparing and submitting its bid or proposal. To the extent a prime contractor is unable to make a good faith effort to utilize its small business subcontractors as described above, the prime contractor is required to explain, in writing, within 30 days of contract completion, to the contracting officer the reasons why it is unable to do so. (2) Authorizing contracting officers to calculate subcontracting goals in terms of total contract dollars in addition to the required goals in terms of total subcontracted dollars. 81 FR (July 14, 2016) effective November 1, 2016

70 (3) Providing contracting officers with the discretion to require a subcontracting plan in instances where a small business rerepresents its size as an other than small business. (4) Requiring subcontracting plans even for modifications under the subcontracting plan threshold if said modifications would cause the contract to exceed the plan threshold. (5) Requiring prime contractors to assign North American Industry Classification System (NAICS) codes to subcontracts.

71 (6) Restricting prime contractors from prohibiting a subcontractor from discussing payment or utilization matters with the contracting officer. (7) Requiring prime contractors to resubmit a corrected subcontracting report within 30 days of receiving the contracting officer's notice of report rejection. (8) Requiring prime contractors to provide the socioeconomic status of the subcontractor in the notification to unsuccessful offerors for subcontracts.

72 (9) Requiring prime contracts with subcontracting plans on task and delivery order contracts to report order level subcontracting information after November (10) Funding agencies receiving small business subcontracting credit. (11) On indefinite-delivery, indefinite-quantity contracts, the contracting officer may establish subcontracting goals at the order level (but not a new subcontracting plan).

73 Qualified Base Closure Area Qualified Disaster Area Native Hawaiian Organization 81 FR (August 4, 2016), effective October 3, 2016 Implements Section 866 of the NDAA 2016, P.L , 11/25

74 Implements SBA Final Rule (78 FR 61114, October 2, 2013) implementing Section 1331 of the Jobs Act of 2010 Interim FAR rule (76 FR 68032, Nov. 2, 2011) Reserves, partial set-asides and order setasides under multiple award contracts Proposed Rule 81 FR (December 6, 2016)

75 826 Extends Comprehensive Subcontracting Plan until December 31, GSA must issue small business goaling report without exclusions 1811 PCRs shall not review DoD acquisitions, and not considered for goaling, if Foreign Military Sale, Humanitarian, Contingency, Status of Forces Agreement or awarded AND performed outside U.S.

76 1812 OSDBU responsible for reviewing credit card acquisitions in FPDS between $3,500 and $150, OSDBU, Mentors, SBA, PCRs shall provide resources on compliance with regulations 1814 SBA shall provide DAU, FAI, SBDCs, PTACs list of regulatory changes

77 1821 Failure to file subcontracting reports may be material breach and considered in past performance evaluation OSDBU responsible for reviewing Subcontracting Plans SBA will issue examples of failure to make good faith effort to comply with Subcontracting Plan

78 1822 Pilot Program for Subcontractor to Obtain Past Performance ratings Subcontractor does not have rating in CPARs, and is first tier subcontractor under subcontracting plan Subcontractor applies with proposed rating Submitted to OSDBU and Prime Contractor If OSDBU and Prime agree, or one agrees, enter into CPARs If OSDBU or Prime do not agree, or both do not respond, Subcontractor can submit rebuttal and neither favorable nor unfavorable rating is entered into CPARs

79 1822 Subcontractor may use subcontract past performance as prime contract past performance Pilot lasts 3 years from time first small business receives rating GAO will issue report Application to CMR, Other SBA Employee, or OSDBU

80 1823 DoD may request size determination for DoD Mentor Protégé, may not approve if SBA found Mentor Protégé affiliated 1831 Size Standard for Agriculture Enterprises; Subject to Rolling Review 1832 VA will use SBA definition for SDVO ESOP and Surviving Spouse allowed Appeals to SBA OHA

81 1833 Petitions for Reconsideration for previously established size standards may be filed within 30 days of final rule 1834 SBIR and STTR extended until SBA and VA shall issue guidance 851 DOD report on major defense acquisition 890 GAO Study on DoD contracts awarded to minority-owned and women-owned businesses

82 Protests of CVE eligibility and appeals of denials or cancellations of inclusion in the CVE database 30 day comment period Implements portion of Section 1832 of the NDAA 2017 Only applies to VA Non-VA SBA SDVO protest and appeal process remains 82 FR (Sep. 28, 2017)

83 Kenneth Dodds Director, Office of Policy, Planning & Liaison John Klein Associate General Counsel for Procurement Law Questions?

84 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

85 Submitting a Winning Proposal Moderator: Sandra Barrett Supervisor Washington Metropolitan Area District Office

86 U.S. General Services Administration SUBMITTING A WINNING PROPOSAL SBA MENTOR PROTÉGÉ CONFERENCE

87 PRESOLICITATION Understand the requirement Conduct your own research- when has this been provided for? Industry days, RFIs, draft RFPs ASK ASK ASK the contracting officer! Have you provided this before? How recent? Is your pricing competitive? Know the market! Capability statement- does it address the government s need? 2

88 PERFORMANCE WORK STATEMENT Is the requirement clear? Does the requirement need further clarification? Is there historical data, or is this a new requirement? Are there professional standards your company meets in order to be competitive? 2

89 SOLICITATION Did anything change from the draft RFI, draft RFQ, amendments? Understand the terms and conditions: FAR Agency requirements Solicitation requirements For construction- Bonding requirements Labor laws Caution: will award be based upon initial offers? Ask the contracting officer questions, when needed 2

90 SECTIONS L AND M Section L gives the instructions on how to submit a proposal Follow all directions! Is there a page limitation? Oral presentations? Section M describes how the government will evaluate the proposal Technical evaluation factors Price in relation to technical: Technical > price Technical = price Price > technical Past Performance 2

91 EXPERIENCE Tailor your experience to the government s requirement Direct experience? Similar experience? Experience as a subcontractor? How recent? Anything change in the market since you last provided the goods/services? Are you lacking in any needed experience? Partner with another Demonstrated working with each other in the past The narrative must lessen the perceived risk to the reviewer in order to be considered for award. 2

92 CAUTION AVOID INCUMBENTITIS 2

93 SUBMITTING YOUR PROPOSAL Must be on time! Quality document- proof read Does it tell the story on how your team can offer the best value to meet the government s requirement? Best practice- review your proposal/oral presentation How would you rate yourself? Does the proposal meet all of the government s requirements? Does the proposal address all of the evaluation factors Does the proposal follow the government s format? Avoid fluff Is the proposal clear, or does it raise questions? 2

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95 Submitting a Winning Proposal Craig Keish Procurement Manager NASA

96 Proposal Submissions Best Practices Mentor Protégé Conference October 12, 2017 Requirements posted in the Acquisition Forecast with POCs SBS can assist with additional information, resource, and socioeconomic preference, procurement and technical POCs Current as of May 2017 Industry should review and become familiar with upcoming requirements to prepare for future RFP START to prepare 2 years in advance of a potential RFP release date Meet with Technical Representatives and COs Market Research Be prepared for Request for Information (RFI) (do homework) Respond to RFI s - Key in considering potential set-asides (WOSB, HUBZone, SDVOSB) and Acquisition Strategy Planning RFP Small Business Specialist (SBS) is a resource to support and advocate for SB When a Draft RFP is released, REVIEW instructions and evaluation criteria to determine impacts Example NAICS Code vs. Past Performance thresholds Ask Questions Follow up with vendors which you have requested past performance feedback from Past Performance = Quality over Quantity Understand the requirements of the Statement of Work and connect it to (how relevant to your past performance) the information provided in your past performance volume (size and content of the contract with respect to this acquisition) Clearly demonstrate in your past performance volume who will be doing each portion of the requirement

97 RFP Past Performance Mentor Protégé Conference October 12, 2017 Understanding the past performance requirements and evaluation criteria of the Request for Proposal (RFP). Every RFP is unique to the requirements Minimum size relevance (average annual cost/fee incurred) and how recent Identify previous contracts that are similar in size (i.e. average annual cost) to Government s requirement Definition of significant subcontractor The definition of significant subcontractor for past performance evaluation may be different than for the cost evaluation (i.e. 10% of the portion of the procurement that the subcontractor is proposed to perform in past performance vs. 20% identified in cost) Content Type and complexity of services, work or supplies, in comparison to the requirement of the solicitation Evaluation of Joint Venture Joint venture is one entity (2 or more companies form to act as a prime) Solicitation language considers JV arrangements in the evaluation of past performance Government attributes the experience or past performance of a JV to the partners comprising the JV to the JV itself if there is performance history Evaluation of Teaming Arrangements Prime and subcontractor agreement to perform requirements Solicitation language includes the term offeror which refers to a prime contractor and it s significant subcontractor Significant subcontractor performance will be compared to the work proposed to be performed Past performance of the prime will be weighted more heavily than any significant subcontractor

98 Submitting a Winning Proposal Earl Anderson Contracting Officer Washington Headquarters Service

99 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

100 Update on the All Small Mentor Protégé Program Sandra Clifford Deputy Director All Small Mentor Protégé Program

101 Updates on The New All Small Mentor-Protégé Program The Office of Government Contracting & Business Development Sandra E. Clifford, Deputy Director & ASMPP Team 3 rd Annual Mentor-Protégé Conference Arlington, VA October 12, 2017

102 200+ Geographically Dispersed Employees Government Contracting & Business Development Robb Wong Associate Administrator Ph: Deputy Jackie Robinson-Burnette Operations & Support Ph: Government Contracting Sean Crean HUBZone Program Mariana Pardo Business Development Ajoy Sinha (acting) Policy, Planning, and Liaison Ken Dodds Ph: Ph: Ph: Ph: Program & Resource Management Office of Certification and Eligibility Office of Size Standards Field Execution & Area Office Support Office of Management and Technical Assistance Office of Policy and Research Office of Program Review All Small Mentor Protégé Program Holly Schick Ph:

103 Resources: HQ Staff, Area Directors, Procurement Center Representatives,Commercial Market Representatives, and Industrial Specialists Resources: HQ Staff, Certification & Continuing Eligibility Team, & Field BOSs Resources: HQ Staff, Certification and Continuing Eligibility Team, & Field Staff Resources: HQ Staff Programs and Services Government Contracting Business Development HUBZone Policy, Planning and Liaison Prime Contracting: 23% of all federal government prime contracting dollars should go to small businesses. In addition: - 5% Small disadvantaged - 5% Women-owned - 3% Service-disabled veterans - 3% HUBZones Subcontracting: Federal Subcontracting goal is set at 36%. Protests and Program Exams Size, WOSB and SDVOSB Programs Certifications of Competency (CoCs) - Provides a second chance to SBs to establish their capability and competence to perform on a specific government contract. 8(a) Business Development & 8(a) Mentor Protégé Program- Business development support for socially and economically disadvantaged firms, including access to sole source and setaside contracts, and Mentoring. There are special Provisions for Alaskan Native, Native Hawaiian Organizations and Tribal Firms. 7(j) Management and Technical Assistance Program Strengthens the capabilities of eligible firms through management and technical assistance. All Small Mentor Protégé Program - for all small firms enhances the SB s ability to compete more successfully for federal government contracts by encouraging mentoring and transfer of knowledge from successful federal contractors. HUBZone Program - Promotes job growth, capital investment, and economic development to historically underutilized business zones, referred to as HUBZones, by providing contracting assistance to small businesses located in these economically distressed communities. Policy, Planning and Liaison- Drafts relevant Government contracting rules, analyzes and responds to proposed statutory changes, and leads inter-agency coordination on small business contracting rules, policies and systems. Goaling & Scorecard Management - Negotiates with each federal agency to establish individual agency goals that, in the aggregate, constitute government-wide goals. Size - Establishes small business size standards for each industry. These size standards are used for all federal small business programs.

104 History & Important Facts Authorization Jobs Act and 2013 NDAA SBA had a well-established mentor protégé program for SBA 8(a) certified firms; but lacked an MPP program for other small business concerns and specifically, one for specialized certified concerns such as WOSB, SDVOB, & Hub Zone businesses Final Rule Published July 25, 2016 Effective Date: August 24, 2016 Official Launch Date: October 1, 2016 Created One Government-wide program for all small businesses Also revised rules for 8(a) MP program to make both programs more consistent, where practicable. 104

105 Mission and Goals Mission To provide streamlined access for small businesses to enter into the federal acquisition marketplace Goal 1 To enhance the business capabilities & growth potential of Small Business firms through mentoring with experienced large businesses Goal 2 To gain increased access to domestic and international contracts through formal partnerships with large experienced businesses Goal 3 To assist large mentor firms in expanding and developing a more mature and diverse supply chains Goal 4 To assist large mentor firms in gaining access to small business contracts through value-added small business partners 105

106 What is a Mentor-Protégé Relationship Small (Protégé) and large (Mentor) pairings apply to become a recognized team that can form joint ventures defined as small to compete for small business set-aside contracts in the federal government. Blend of business development assistance and government contracting. SBA has two programs: 8(a) and ASMPP; new rules apply to SBA programs only 8 other Agencies have MP Programs, focused on building prime/sub relationships; do not offer exclusion from affiliation Not for start-ups ; experience 106

107 Mentor Services to Protégés Management & Technical Assistance (internal business management systems) Financial Assistance (in the form of equity investments and/or loans) Contracting Assistance (contracting processes, capabilities acquisitions & performance) Trade Education (learn how to export, International Trade business plan, finding markets) Business Development Assistance (strategy, finding contracting and partnership opportunities) General and/or Administrative Assistance processes and support) 107 (business

108 Primary Functions (Certify.SBA.gov) for small (Protégé) and large (Mentor) pairings to apply to become a recognized team that can form joint ventures defined as small to compete for small business set-aside contracts in the federal government. ASMPP (All Small Mentor Protégé Program) is operated centrally at SBA HQ. Review & evaluate online applications; approve or decline per rules and quality standards. (CFR 125.9) Collect annual reports and evaluate, quantitatively and qualitatively, the success of the program through identified metrics and success stories. Joint venture agreements are not reviewed and approved in this office. 108

109 ASMPP HIGHLIGHTS SBA Program provides exclusion from affiliation vs. what other Agency s MPP Programs provide. Two maximum - MPA agreements for Protégés in lifetime. Both Protégé and Mentor must be for-profit. Mentor no more than 3 Protégés at same time (not lifetime). Self-certifying; small in size standard corresponding to primary NAICS; or seeking BD assistance in a secondary NAICs and qualify as small. Must demonstrate previous experience if applying in secondary NAICs. Existing 8(a) firms in last 6 months of the 8(a) program wishing to transfer the MPA to ALL Small online application (coordinating with 8(a) office to fine tune process) no reapplication required. Requiring upload of Business Plan; no financial statements or tax returns as part of application process. JV Agreements: ASMPP will not review and approve Joint Venture agreements 109

110 110

111 All Small Mentor Protégé Program Applications must be submitted via certify.sba.gov. No paper applications are accepted. New! Listing of approved MPAs Factsheets

112 Certify.SBA.Gov 112

113 113

114 How To Apply Do your Homework Applicants are required to register in the System for Award Management (SAM) prior to submitting their Mentor/Protégé application. Complete your business profile in Certify.SBA.gov. Assess your readiness to sell to the government. Caution! Evaluate and select your Mentor prior to applying. This is not a matching program. SBA will not find a Mentor for you. Do your homework. Begin the ASMPP application process. Protégés and Mentors must complete the online tutorial and have certificate of completion ready for upload. Have required documents ready for upload. 114

115 Annual Reports Each protégé and mentor must complete an annual report, which is due 30 days before the anniversary of the MP approval date. You will be sent reminder notices through Certify.SBA.gov 30 days before annual report is due, 15 days before it is due and then you ll get notice when the report is overdue. The reports are uploaded into Certify. Templates for Protégé s Report and Mentor s Addendum are on our website under Resources tab. 115

116 Fast Facts Oct 1, ,500+ Online Tutorial Views 12 8(a) Transfer MPAs to ASMPP 60 ASMPP applications declined 320 Approved MPA agreements in portfolio SBs - 25% SDVOB - 40% HUBZONE- 17% 8(a) - 21% 8(a) Small Business HUBZone VOB SDVOB WOSB EDWOSB Applicant Categories Average of 8-10 days turnaround on review & approval For questions, please contact the AllSmallMPP Team at: allsmallmpp@sba.gov Visit our website at: 116

117 3 rd Annual Mentor Protégé Conference October 12-13, 2017 Arlington, VA

118 Size/Affiliation Sam Le Attorney Advisor Office of General Counsel Vincent Mazzotta Area Size Program Manager Office of Government Contracting

119 Vincent J. Mazzotta, Area Size Program Manager Office of Government Contracting Area II Sam Le, Attorney Advisor Office of General Counsel

120 SBA Office of Hearings and Appeals Definition of Small Business Size Standards Size Protests Affiliation Rules

121 Very important office within SBA to know about and understand. The Office of Hearings and Appeals' mission is to provide an independent, quasi-judicial appeal of certain SBA program decisions. All Size Determinations can be appealed to OHA.

122 Organized for profit Place of business in the U.S., operates primarily in the U.S., or makes a significant contribution to the U.S. economy (i.e. jobs, taxes, US products) Does not exceed revenue-based OR employee-based size standard for NAICS code Each North American Industrial Classification System (NAICS) code has a small business size standard (wholesale and retail NAICS are not used in government procurements) 13 C.F.R

123

124 It s important to recognize that a firm can be both small for some NAICS codes AND other than small (large) for other NAICS codes at the same time. Sector 54 Professional, Scientific and Technical Services Subsector 541 Professional, Scientific and Technical Services Offices of Lawyers $ Title Abstract and Settlement Offices $ All Other Legal Services $ Offices of Certified Public Accountants $ Tax Preparation Services $ Payroll Services $ Other Accounting Services $ Architectural Services $ Landscape Architectural Services $ Engineering Services $ _a_Except Military and Aerospace Equipment and Military Weapons $ _b_Except Contracts and Subcontracts for Engineering Services Awarded Under the National Energy Policy Act of 1992 $ _c_Except Marine Engineering and Naval Architecture $ Drafting Services $ Building Inspection Services $ Geophysical Surveying and Mapping Services $ 15.0

125 Use Federal Tax Returns Cost of Goods Sold plus Total Income Average of last three completed fiscal years Use AARs for all receipts-based NAICS The calculation of AAR is the same for all SBA programs, including 8(a). 13 C.F.R

126 Total Revenue = $8,888,888

127 Count all individuals employed on a full-time, part-time, or other basis. This includes employees obtained from a temporary employee agency, professional employee organization or leasing concern. Numbers of employees for each of the pay periods for the preceding completed 12 calendar months (running average). Payroll records/irs Form C.F.R

128 Firm Exceeds Size Standard!!!

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130 All size protests, irrespective of when received and regardless of any other office s opinion as to validity. Size protests that are not specific or were received late (even post-award) must be forwarded to SBA. Protests are decided by the SBA GC Area Office with jurisdiction over location of headquarters of protested concern (not its parent). If you re unsure if something constitutes a protest, consult with the appropriate SBA GC Area Office. 13 C.F.R

131 If the contract at issue is a long term contract (over five years duration), a protest may be filed at three times: 1. Within 5 days of award notification of the contract itself; 2. Within 5 days of notification of the exercise of an option; or 3. Within 5 days of award notification an individual order where the contracting officer has requested size certifications. Protests made at any other time will be dismissed as untimely. 13 C.F.R

132 Small Businesses must certify their size status in accordance with NAICS codes assigned to MAC. For MACs, self-certification is at time of initial offer including price. For Agreements such as BPAs, BAs, BOAs, Size is determined at time of response to the solicitation for agreement. Because Agreements are not Contracts under FAR, SB credit is applied only if SB qualifies as small at time of order. For BPAs issued against GSA MAS Contracts, Size is determined at time of offer on the Contract. Recertification requirements apply if a Small Business acquires another business or is acquired, or is part of a Joint Venture involved in a merger or acquisition.

133 Formal size determinations and NAICS code designations made by authorized SBA officials are binding upon the parties. Only GC Area Offices are authorized to make formal size determinations. SBA Regional or District Offices have no jurisdiction or authority to make formal size determinations. Companies found to be other than small are required to amend their DSBS/SAM listings and to notify any COs to whom they selfcertified their size as a SB in the intervening period. 13 C.F.R , 13 C.F.R , 13 C.F.R (g)(5)

134 A concern may request SBA to recertify it as a small business at any time. The prohibition against future self-certification does not apply if the adverse size determination is limited to a specific procurement. A denial of an application for recertification is a formal size determination. The granting of an application for recertification has future effect only. 13 C.F.R

135

136 The key to Size is Affiliation A concern s size includes the size of all its affiliates. Separate divisions, subsidiaries, locations, CAGE codes, product lines, incorporation, payment of taxes, existence are all irrelevant. The key to Affiliation is Control Concerns and entities are affiliates of each other when one controls or has the power to control the other, or a third party or parties controls or has the power to control both. It does not matter whether control is exercised, so long as the power to control exists. 13 C.F.R (a); FAR

137 When one controls or has the power to control another through: Common ownership Common management Identity of interest (family members, common investments, dependence through contractual or economic relationships) A newly organized concern Joint ventures Negative control Remember: it does not matter whether control is exercised, just that it exists. 13 C.F.R

138 General Affiliation Ongoing basis Common ownership, management, identity of interest, etc. Applies to the firm in all business transactions Procurement Specific Joint venture (ostensible subcontracting) Nonmanufacturers rule (NMR) Applies only to the contract at hand

139 The size of a business is determined by counting its employees (or average annual receipts) plus those of all of its affiliates. Separate divisions, subsidiaries, locations, CAGE codes, or product lines are irrelevant. Whether a concern has any affiliates is determined by analyzing the existence of (common) control or the power to control. 13 C.F.R (a)(6)

140

141 Majority ownership: Owns 50% or more of firm s voting stock Minority ownership: Single minority ownership: Owns less than 50% but large compared to others Multiple minority ownership: Less than 50% by multiple minority owners Widely held ownership 13 C.F.R (c)

142 If I own: 1) 100% of an ice cream parlor in Chicago; 2) 100% of a furniture manufacturing plant in China; 3) 75% of a machine shop in Ohio; and 4) 51% of a construction company in Montreal I control all four through my ownership interest. Because I control them all, they are affiliated and must be included to calculate the size of any one of them. Location and line of business are irrelevant. 13 C.F.R (c )(1)

143 Individuals or firms with identical business or economic interests may be treated as one party with such interests aggregated.

144 Firms owned or controlled by married couples, parties to a civil union, parents, children, and siblings are presumed to be affiliated with each other if they conduct business with each other, such as subcontracts or joint ventures or share or provide loans, resources, equipment, locations or employees with one another. This presumption may be overcome by showing a clear line of fracture between the concerns. Other types of familial relationships are not grounds for affiliation on family relationships. Fracture exists if family members have no involvement with each other s business concern or are estranged. Not necessary that there be the complete absence of any business ties between the family members or their firms. SBA must consider pertinent factors in examining a clear fracture. 13 C.F.R (f)

145 Economic dependence is presumed if a firm derives 70% or more of its revenue from another firm. This presumption may be rebutted by a showing that despite the contractual relations with another concern, the concern at issue is not solely dependent on that other concern, such as where the concern has been in business for a short amount of time and has only been able to secure a limited number of contracts. A business concern owned and controlled by an Indian Tribe, ANC, NHO, CDC, or by a wholly-owned entity of an Indian Tribe, ANC, NHO, or CDC, is not considered to be affiliated with another concern owned by that entity based solely on the contractual relations between the two concerns. 13 C.F.R (f)

146 Parties to a JV are considered to be affiliates. A joint venture of two or more business concerns may submit an offer as a small business for a Federal procurement, subcontract or sale so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract. 13 C.F.R (h)(1)&(2)

147 JV cannot be awarded more than three contracts over two YR period, starting from first contract award date or will be subject to general affiliation (3-in-2 rule). The same two (or more) entities may create additional joint ventures, but long-standing relationship might lead to affiliation finding. Proportional share of JV receipts are included when determining size. 13 C.F.R (h)

148 A joint venture of two or more business concerns may submit an offer as a small business for a Federal procurement, subcontract or sale so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract. 13 C.F.R (h)(3)(i)

149 In services contracts, the prime must perform the contract s primary and vital requirements, not merely manage the subcontractor s performance of these tasks. In construction contracts, subcontractors often perform a majority of work. Thus, the primary role of prime contractor is to superintend, manage, and schedule the work, including coordinating the work of the various subcontractors. A subcontractor that is not a similarly situated entity (SSE) is an ostensible subcontractor if: The subcontractor performs the primary and vital requirements, or The prime contractor is unusually or unduly reliant upon the subcontractor. A contractor and its ostensible subcontractor are treated as joint venturers, and therefore affiliates, for size determination purposes.

150 A similarly situated entity (SSE) is a subcontractor that has the same small business program status as the prime contractor. This means that: For a HUBZone requirement, a subcontractor that is a qualified HUBZone small business concern; for a small business set-aside, partial set-aside, or reserve a subcontractor that is a small business concern; for a SDVO small business requirement, a subcontractor that is a selfcertified SDVO SBC; for an 8(a) requirement, a subcontractor that is an 8(a) certified Program Participant; for a WOSB or EDWOSB contract, a subcontractor that has complied with the requirements of part 127. In addition to sharing the same small business program status as the prime contractor, a similarly situated entity must also be small for the NAICS code that the prime contractor assigned to the subcontract the subcontractor will perform. 13 C.F.R

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152 A joint venture of at least one 8(a) Participant and one or more other business concerns may submit an offer as a small business for a competitive 8(a) procurement, or be awarded a sole source 8(a) procurement, so long as each concern is small under the size standard corresponding to the NAICS code assigned to the procurement. Additionally, a joint venture between a protégé firm and its approved mentor will be deemed small provided the protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the contract and has not reached the dollar limits set forth in C.F.R (b)(1), (b)(2)

153 In order to initially qualify as a protégé firm, a concern must qualify as small for the size standard corresponding to its primary NAICS code or identify that it is seeking business development assistance with respect to a secondary NAICS code and qualify as small for the size standard corresponding to that NAICS code. A firm may self-certify that it qualifies as small for its primary or identified secondary NAICS code. Where a firm is other than small for the size standard corresponding to its primary NAICS code and seeks to qualify as a small business protégé in a secondary NAICS code, the firm must demonstrate how the mentor-protégé relationship is a logical business progression for the firm and will further develop or expand current capabilities. SBA will not approve a mentor-protégé relationship in a secondary NAICS code in which the firm has no prior experience. 13 C.F.R (c)(i) & (ii)

154 Contents of joint venture agreement. Every joint venture agreement to perform an 8(a) contract, including those between mentors and protégés authorized by , and joint ventures under the ASMPP program must contain a provision: Setting forth the purpose of the joint venture; 13 C.F.R (c)(1), 125.8(b)(2)

155 Designating an 8(a) Participant [small business] as the managing venturer of the joint venture and an employee of an 8(a) Participant [small business] as the project manager responsible for performance of the contract. The individual identified as the project manager of the joint venture need not be an employee of the 8(a) Participant [small business] at the time the joint venture submits an offer, but, if he or she is not, there must be a signed letter of intent that the individual commits to be employed by the 8(a) Participant [small business] if the joint venture is the successful offeror. The individual identified as the project manager cannot be employed by the mentor and become an employee of the 8(a) Participant [small business] for purposes of performance under the joint venture; 13 C.F.R (c)(2), 125.8(b)(2)

156 Stating that with respect to a separate legal entity joint venture the 8(a) Participant(s) [small business] must own at least 51% of the joint venture entity; Stating that the 8(a) Participant(s) [small business] must receive profits from the joint venture commensurate with the work performed by the 8(a) Participant(s) [small business] ; 13 C.F.R (c)(3) & (4), 125.8(b)(2)

157 Providing for the establishment and administration of a special bank account in the name of the joint venture. This account must require the signature of all parties to the joint venture or designees for withdrawal purposes. All payments due the joint venture for performance on an 8(a) contract [set-aside contract] will be deposited in the special account; all expenses incurred under the contract will be paid from the account as well; 13 C.F.R (c)(5), 125.8(b)(2)

158 Itemizing all major equipment, facilities, and other resources to be furnished by each party to the joint venture, with a detailed schedule of cost or value of each, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated major equipment, facilities, and other resources to be furnished by each party to the joint venture, without a detailed schedule of cost or value of each, or in the alternative, specify how the parties to the joint venture will furnish such resources to the joint venture once a definite scope of work is made publicly available; 13 C.F.R (c)(6), 125.8(b)(2)

159 Specifying the responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, including ways that the parties to the joint venture will ensure that the joint venture and the 8(a) partner(s) [small business partner] to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, where practical. If a contract is indefinite in nature, such as an indefinite quantity contract or a multiple award contract where the level of effort or scope of work is not known, the joint venture must provide a general description of the anticipated responsibilities of the parties with regard to negotiation of the contract, source of labor, and contract performance, not including the ways that the parties to the joint venture will ensure that the joint venture and the 8(a) partner(s) [small business partner] to the joint venture will meet the performance of work requirements set forth in paragraph (d) of this section, or in the alternative, specify how the parties to the joint venture will define such responsibilities once a definite scope of work is made publicly available; 13 C.F.R (c)(7), 125.8(b)(2)

160 Obligating all parties to the joint venture to ensure performance of the 8(a) contract [set-aside contract] and to complete performance despite the withdrawal of any member; Designating that accounting and other administrative records relating to the joint venture be kept in the office of the 8(a) Participant [small business] managing venturer, unless approval to keep them elsewhere is granted by the District Director or his/her designee upon written request; Requiring the final original records be retained by the 8(a) Participant [small business] managing venturer upon completion of the 8(a) [set-aside] contract performed by the joint venture; 13 C.F.R (c)(8) & (9) & (10), 125.8(b)(2)

161 Stating that quarterly financial statements showing cumulative contract receipts and expenditures (including salaries of the joint venture's principals) must be submitted to SBA not later than 45 days after each operating quarter of the joint venture; and Stating that a project-end profit and loss statement, including a statement of final profit distribution, must be submitted to SBA no later than 90 days after completion of the contract. 13 C.F.R (c)(11) & (12), 125.8(b)(2)

162 For any 8(a) contract [set-aside contract], including those between a protégé and a mentor authorized by , the joint venture must perform the applicable percentage of work required by of this chapter [40% of the work performed by the joint venture]. 13 C.F.R (d)(1), 125.8(c)

163 The 8(a) partner(s) [small business partner] to the joint venture must perform at least 40% of the work performed by the joint venture. The work performed by the 8(a) partner(s) [small business partner] to a joint venture must be more than administrative or ministerial functions so that the 8(a) partners [small business partner] gain substantive experience. The amount of work done by the partners will be aggregated and the work done by the 8(a) partner(s) [small business protégé] must be at least 40% of the total done by all partners. In determining the amount of work done by a non-8(a) partner [mentor], all work done by the non- 8(a) partner [mentor] and any of its affiliates at any subcontracting tier will be counted. 13 C.F.R (d)(2) & (2)(i) & (2)(ii), 125.8(c)

164 For 8(a) procurements, JV must be approved by SBA prior to award. For other contracts (i.e., SBSA, HUBZone set-aside), SBA does not need to approve the JV prior to award, but if the size of the joint venture is protested, the provisions of (c) and (d) will apply. JV is considered small so long as the 8(a) protégé is small for the procurement. JV may bid as a small business on any federal prime or subcontract. 13 C.F.R (b)(3) &13 CFR (h)(3)(iii)

165 13 CFR Part 121 SBA.gov at igationstructure/contracting/contractin g-officials/eligibility-sizestandards FAR 19.1 & 19.3 Bottom Line: When in doubt, check it out with a Size Specialist!

166 State of HQ: Send your request to: State of HQ: Send your request to: CT ME MA NH PR NJ NY RI VT USVI SBA Office of Government Contracting, Area 1 ATTN: Janette Fasano, Area Director* 10 Causeway Street, Rm. 265 Boston, MA Phone: Fax: *Contact Ms. Fasano before sending Janette.Fasano@sba.gov IL IN IA KS MI MN MO NE OH WI SBA Office of Government Contracting, Area 4 ATTN: David Gordon, Size Program Manager 500 W. Madison Street, Ste Chicago, IL Phone: Fax: David.Gordon@sba.gov DC MD PA VA WV SBA Office of Government Contracting, Area 2 ATTN: Vince Mazzotta, Size Program Manager Parkview Office Tower 1150 First Avenue, Ste King of Prussia, PA Phone: Fax: Vincent.mazzotta@sba.gov AR CO LA UT WY NM OK TX MT ND SD SBA Office of Government Contracting, Area 5 Robert C. Taylor, Area Director ATTN: Stephanie Lewis, Size Specialist 4300 Amon Carter Blvd., Suite 116 Fort Worth, TX Phone: Fax: Stephanie.Lewis@sba.gov AL FL GA KY MS NC SC TN SBA Office of Government Contracting, Area 3 Carol Thompson, Area Director ATTN: Ivette Mesa Bascumbe, Size Specialist* 233 Peachtree St., NE, Suite 225 Atlanta, GA Phone: Ext. 182* Fax: *Contact Ms. Bascumbe before sending Ivette.Bascumbe.Mesa@sba.gov AK AZ CA HI ID NV OR WA GU SBA Office of Government Contracting, Area 6 ATTN: Esmeralda Sanchez, Size Specialist 455 Market Street, Ste. 600 San Francisco, CA Phone: Fax: Esmeralda.Sanchez@sba.gov

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