Selling to the Federal Government Federal Government Contracting and The Historically Underutilized Business Zone (HubZone) Program Bryan, OH | November 7, 2018
Federal Contracting Consider This! • Huge Market ($500+ BILLION!) • On-time payment • Great repeat customer • Bring the $$$$ to Northern Ohio • Some company somewhere is getting this work, why not here??
Federal Spending Goals Small Business – 23% ($100+ Billion) 5% ($25+ Billion) Women-Owned 5% ($25+ Billion) Disadvantaged/8(a) 3% ($15+ Billion) HUBZone 3% ($15+ Billion) Service-Disabled Veterans * The Veterans Administration has a 12% goal for Veteran-Owned Small Businesses and a 10% goal for Service Disabled Veteran Owned Small Businesses.
Federal Contracting in State of Ohio!!! $3,000,000,000 Small Businesses $2,500,000,000 $2,000,000,000 $1,500,000,000 Small Businesses $1,000,000,000 $500,000,000 $0 2013 2014 2015 2016 2017 Total Sales in 5 years = $10,218,085,094
Federal Contracting in 4 Counties of NW Ohio in the past two years Defiance Williams Fulton Henry Federal Contracting dollars the last two years $52,361,127 $410,843 $1,066,693 $0 # Companies with Federal Sales 4 2 10 2 6
Certifications • Formal Certification • Self Certification – 8a – Small Business – HubZone – Veterans and SDVOSB • Verification (for VA – Woman Owned contracts only) – SDVOSB • SBA Repository • 3 rd party certifier – VOSB Agencies can set-aside (restrict competition) to any of the above groups if market research shows that there is adequate competition. Federal market research is done through the use of a sources sought notices in www.fbo.gov
Required Registrations • SAM – System for Award Management – If you want to do business on the Federal level, you MUST be on SAM! – www.sam.gov – DUNS Number – call 1-866-705-5711 / www.dnb.com – SBA Small Business Dynamic Database
Small Businesses in SAM in the Four County Area • Defiance 12 • Fulton 21 • Henry 6 • Williams 13 9
HUBZone Program Purpose The purpose of the HUBZone program is to provide federal contracting assistance for qualified SBCs located in historically underutilized business zones in an effort to increase employment opportunities, investment, and economic development in such areas. 10
HUBZoneImpact • Number of Participants: 5,306 as of 6/30/18 • Annual Contracting Levels: $7.3 Billion (FY 2017) • Annual Goal: 3.0% • FY 2017 HUBZone Achievement: 1.65% • FY 2016 HUBZone Achievement: 1.67% HUBZoneBenefits • Helps Agency meet/exceed HUBZone goal with set-aside option • An additional tool for economic revitalization of underutilized areas. 11
HUBZone Program Eligibility • Small business • Be at least 51 percent owned and controlled by U.S. citizens, a Community Development Corporation (CDC), an agricultural cooperative, a Native Hawaiian Organization (NHO), or an Indian tribe • Effective May 25, 2018 – indirect ownership requirement removed from U.S. citizens • Principal office located in a HUBZone • At least 35 percent of its employees live in a HUBZone https://maps.certify.sba.gov/ 12
HUBZone Contracts 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
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 126.601(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. 14
Price Evaluation Preference For HUBZone SBCs • The HUBZone price evaluation preference (PEP) shall be used in acquisitions conducted using full and open(F&O) competition • The CO shall give offers from HUBZone SBCs a price evaluation preference by adding a factor of 10% to the lowest, responsive, responsible large business offeror. 15
The All Small Mentor-Protégé Program Protégés get business development help from their mentors: • Guidance on internal business management systems, accounting, marketing, manufacturing, and strategic planning • Financial assistance in the form of equity investments, loans, and bonding • Assistance navigating federal contract bidding, acquisition, and performance process • Education about international trade, strategic planning, and finding markets • Partnership on Contracts
Questions? Cleveland District SBA Northwest Ohio PTAC John Renner Kent Kahn 216-522-4167 419-995-8283 (Office) john.renner@sba.gov 419-860-4032 (Cell) Kahn.k@rhodesstate.edu Vanessa Behrend 216-522-4171 vanessa.behrend@sba.gov
Lending in the HUBZone/Rural Areas November 7 1pm to 230pm 1425 E. High St. Bryan, OH 43506 For a copy: Raymond.Graves@sba.gov SBA Cleveland District Office | SBA Indiana District Office
Ohio Rural Business Initiative ➢ Loans to Rural Entrepreneurs by FY – Northern Ohio Row Labels Count Dollars 2017 Rural 342 $ 58,756,650.00 2018 Rural 363 $ 96,516,800.00 Grand Total 705 $ 155,273,450.00 ➢ Increased Outreach & Partnership with USDA • SBA & USDA entered into a new MOU 04/04/2018 • Formalized interagency cooperation ➢ Outreach efforts ➢ Partnering on credit transactions 19
What’s the SBA Doing To Support Rural Entrepreneurs? ➢ 7(a) Loan Fee Relief • Borrowers in rural / HUBZone areas • Loans < $150,000 ➢ Upfront guaranty fee reduced to 66.67 basis points (.6667%) ➢ Ongoing servicing fee waived entirely ➢ Rural includes counties that are 30% or more rural by population ➢ Williams, Fulton, Defiance, Henry, Paulding, Putnam – not Wood or Allen ➢ 504 Rural Initiative Pilot Program • CDC’s are able to make loans anywhere within their SBA Region ➢ You're in SBA Region 5: Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin • Available from July 19, 2018 to July 20, 2020 ➢ Renewed effort to reach out to rural areas and populations 20
HUBZoneMap https://maps.certify.sba.gov/hubzone/map 21
Williams County Financing Activity PROJ COUNTY NAME WILLIAMS Row Labels Count Dollars 2017 11 $794,700 Other Specialized Design Services 2 $85,600 General Freight Trucking, Long Distance, Truckload 1 $13,200 Residential Remodelers 1 $20,000 All Other Specialty Trade Contractors 1 $125,000 Other Clothing Stores 1 $50,000 Caterers 1 $13,000 Portfolio Management 1 $55,000 Convenience Stores 1 $44,000 All Other Rubber Product Manufacturing 1 $238,900 General Freight Trucking, Local 1 $150,000 2018 16 $2,450,100 General Freight Trucking, Local 5 $312,700 Limited-Service Restaurants 2 $62,400 All Other Plastics Product Manufacturing 2 $755,000 Offices of Physicians (except Mental Health Specialists) 1 $25,000 Pharmacies and Drug Stores 1 $600,000 Other Industrial Machinery Manufacturing 1 $365,000 Plumbing, Heating, and Air-Conditioning Contractors 1 $120,000 Automotive Parts and Accessories Stores 1 $50,000 Drycleaning and Laundry Services (except Coin-Operated) 1 $145,000 Janitorial Services 1 $15,000 Grand Total 27 $3,244,800 22
What: Two Major Lending Programs Two Two flags flagship bus hip busines iness l s loan oan guaran guarantee tee programs programs he help sta lp start rt-up up business businesses es lau launc nch and existing busine h and existing business ss expan expand: d: 504 7(a) SBA provides a Supports job creation guarantee of select and economic small business loans development through made by lender guaranteed participants debentures Accounts Certain Working Receivable Refinancing Real Estate Capital Equipment and of Debt and Buildings Inventory Financing Change of Equipment Ownership Leasehold Real Estate Improvements and Buildings 23
What if the Borrower Isn’t a Good Fit For Us? ➢ SBA’s Network of Counseling Partners • SCORE • Small Business Development Centers • Women’s Business Center • Veteran’s Business Outreach Center ➢ SBA Microloan – Small working capital loans for applicants with higher risk profiles than will be contemplated by a bank. • Loans up to $50,000 • Maximum term 6 years • Interest rates set by Micro Lender • Pre and Post loan technical assistance ➢ USDA B&I Guarantee Program (see following slides) 24
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