Size and Affiliation First Wednesday Virtual Learning Series 2019 - PowerPoint PPT Presentation

Size and Affiliation First Wednesday Virtual Learning Series 2019

Hosts Christopher Eischen, Procurement Center Representative SBA Office of Government Contracting, Area IV, Kansas City, MO Gwen Davis, Procurement Center Representative SBA Office of Government Contracting, Area IV, Minneapolis, MN 3

Welcome to “SBA Virtual Learning 2019” 1. Questions answered during the final 10 minutes. 2. Technical problems: Contact the moderator with a note or call AT&T Support Desk at 1-888-796-6118. 3. 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 https://www.sba.gov/tools/sba-learning-center/search/training 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: • http://www.aptac-us.org/for-contracting-officers-sba-webinar- library/ Contracting officer resources: “How PTACs partner with • federal agencies”: http://www.aptac-us.org/federal-partners/ Find your nearest Procurement Technical Assistance Center at • http://www.aptac-us.org 5

FIRST WEDNESDAY VIRTUAL LEARNING SERIES 2019 SCHEDULE 1:00 to 2:00 Central Time FY 2019 Date Topic 1 October 3, 2018 Understanding the Non-Manufacturer Rule 2 November 7, 2018 Size and Affiliation 3 December 5, 2018 Joint Ventures 4 January 9, 2019 Certificate of Competency (COC) Program 5 February 6, 2019 Market Research 6 March 6, 2019 Woman Owned Small Business (WOSB) Program 7 April 3, 2019 Historically Underutilized Business Zone (HUBZone) Program 8 May 1, 2019 8(a) Program 9 June 5, 2019 Service Disabled Veteran Owned (SDVOSB) Program 10 July 10, 2019 Regulation Updates 11 August 7, 2019 All Small Mentor Protégé Program The program schedule is for information only and is subject to change. 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 email addresses of participants in an excel document to sbalearning@sba.gov. 7

Today’s Speaker Stephanie Lewis Area Size Specialist Office of Government Contracting Area V (AR, CO, LA, MT, ND, NM, OK, SD, TX, UT, WY) U.S. Small Business Administration 8

Topics Covered  Size ◦ Size standards ◦ NAICS Codes ◦ Nonmanufacturer Rule (NMR) ◦ Limitations on subcontracting (not size issue)  Affiliation ◦ Types of affiliation ◦ Joint Ventures – join December’s webinar! ◦ Mentor-Protégé programs  Size Protests and Appeals 9

Why is size status important? Federal Contracting: 1. Set aside for small businesses must be awarded to legitimate small businesses to ensure an even playing field Other situations: 2. ◦ Programs of other agencies – patents and licensing ◦ Certifications – VIP, 8(a), WOSB, HUBZone ◦ Obtaining federal property 10

What is a Small Business? Organized for profit 1. Place of business in the U.S. 2. And operates primarily in the U.S., or makes a significant ▪ contribution to the U.S. economy i.e. payment of taxes, use of American products, labor, or materials Each NAICS has a receipts-based OR employee-based 3. size standard Each North American Industrial Classification System ▪ (NAICS) code has a small business size standard NAICS are created by the Dept. of Census, not SBA ▪ Wholesale and retail NAICS are not used in government ▪ procurements 13 CFR § 121.105 11

SBA Size Standards Commercial and Institutional Building Construction 236220 $36.5 541310 Architectural Services $7.5 $7.5 541320 Landscape Architectural Services $15.0 541330 Engineering Services 541330_a_Except Military and Aerospace Equipment and Military Weapons $38.5 332322 Sheet Metal Work Manufacturing 500 employees Light Truck and Utility Vehicle Manufacturing 336112 1,500 employees It’s important to recognize that a firm can be small for some NAICS while at the same time be ‘other than small’ (large) for others. www. w.sb sba.gov a.gov/t /tools/si s/size-st stand andar ards-tool 12

How SBA sets Size Standards SBA has exclusive authority to set the small business size  standard for each NAICS code 2017 NAICS/Size Standards  Rolling reviews every five years  Adjustments for inflation  Changes apply to new solicitations posted after rule takes  effect (or CO may modify them into an existing open solicitation at their discretion) 13

Average Annual Receipts (AAR) ❑ Use Federal Tax Returns ❑ Cost of Goods Sold plus Total Income ❑ Average of last three completed fiscal years Number of Employees ❑ Count all individuals employed on a full-time, part-time, or other basis. ❑ Numbers of employees for each of the pay periods for the preceding completed 12 calendar months (running average). 14

Exclusions-- 13 CFR §121.104(a) Inter-affiliate transfers 1. net capital gains or losses 2. taxes collected for and remitted to a taxing authority if 3. included in gross or total income proceeds from transactions between a concern and its 4. affiliates amounts collected for another by a travel agent, real estate 5. agent, advertising agent, conference management service provider, freight forwarder or customs broker Inclusions ❑ Receipts or employees of an affiliate 15

Recognizing a small business  General rule: Contracting Officer (CO) “shall” accept self - certification unless there is “a reason to question” the firm’s self-certification.  SAM self-certification ◦ Must be updated every 12 months ◦ Effective at time of offer ◦ Can use date adjustment field to look up size for previous dates 16

Assigning NAICS codes  Best describes the principal purpose of the product or service being acquired  13 CFR 121.402(b)  Subcontracts: ◦ NAICS determined by prime contractor ◦ Reflects product or service obtained in the subcontract → NOT just to make sub small ◦ Nonmanufacturer Rule & Limitation on Subcontracting rules do not apply 17

As of What Moment is Size Determined? “…as of the date the concern submits a written self - certification that it is small to the procuring activity as part of its initial offer (or other formal response to a solicitation) which includes price.” 13 CFR §121.404(a) Multiple Award Contracts – “ a business is small at the time of offer for the Multiple Award Contract, it is small for each order issued against the contract, unless a contracting officer requests a new size certification in connection with a specific order .” 13 CFR 121.404(a)(1) 18

As of What Moment is Size Determined? A small business which becomes large after written self- certification is still considered small for the life of that contract (including options) unless recertification is requested/required. 13 CFR §121.404(g) In recertification, size is determined as of the date the concern self-certifies to the order/contract. 13 CFR §121.404(g) 19

SIZE RECERTIFICATION GENERAL RULE: if the concern is small at the beginning, it is small for the life of the contract (including options). EXCEPTION: recertification of size is required if there is a: novation or ✓ merger or acquisition without a novation or ✓ “long - term contract” (over 5 years including ✓ options; includes MAS, MAC, and GWACS). For long-term contracts, contractors must recertify before the end of the fifth year and every time an option is exercised thereafter. 13 CFR §121.404(g)(1)-(3); FAR §19.301-2 20

Limitations on Subcontracting Supplies: 50% of amount paid to it (excluding costs of materials) Services: 50% of the amount paid to it General Construction: 85% of the amount paid to it (excluding costs of materials) Specialty Construction: 75% of the amount paid to it (excluding costs of materials) Work performed by similarly situated entities (SSEs) does not count toward the percentage 13 CFR § 125.6 21

Similarly Situated Entities (SSE)  An SSE is a firm that meets the same size and status requirements as the prime for the subject procurement.  I.e., a women owned small business (WOSB) subcontractor for a contract that is set aside for women-owned small businesses (WOSB)  Firms that are “similarly situated entities” (SSEs) will not be found to have an ostensible subcontracting relationship. 22

Manufacturing Contracts  On a small business set-aside contract, the offeror must be the Manufacturer or meet the requirements of the NonManufacturer Rule  Not applicable to small business set-asides between the MPT and the Simplified Acquisition Threshold (SAT) ◦ IS APPLICABLE TO SBSAs over the SAT ◦ IS APPLICABLE TO SOCIO-ECONOMIC SBSAs of any dollar level  Applies to orders off GSA Schedule if they are set-aside for small business  Has to be self-performed by the offeror themselves (not an affiliate) 13 CFR § 121.406 23