WIPP Works in Washington – June 2018

Adding the Voice of Women Business Owners in Addressing the Skills Gap

Ann Sullivan,                 WIPP Chief Advocate

At a recent meeting with women business owners—midsize and small–they pointed out shortages in the workforce that presented a present and future issue.  The concerns ranged from finding truck drivers and master electricians to highly skilled technical personnel.  Business owners aren’t the only ones talking about the shortages in the workforce, Congress and the Administration are concentrating on strategies to fill what is known as the “skills gap.”

The Obama Administration workforce development priorities focused on promoting community colleges and their two-year, associates degree tracks as a valid alternative to four-year degree programs, as well as encouraging partnerships between community colleges and employers.

The Trump Administration is focusing its efforts on apprenticeship.  Last year, President Trump signed an Executive Order (EO), “Expanding Apprenticeships in America,” which would provide industry associations, unions, and other stakeholders the flexibility to develop industry-recognized apprenticeships, loosening the Department of Labor regulations on apprenticeship programs.  The Administration’s Executive Order also doubled the amount of money for apprenticeship grants, from $90 million to almost $200 million a year. Additionally, the order establishes a new Task Force on Apprenticeship Expansion, chaired by the Secretary of Labor and co-chaired by the Secretaries of Education and Commerce. It would also include representatives from industry, labor, and educational institutions.

Congress is also taking a hard look at the skills gap. In a recent House Small Business Committee hearing, “Workforce Development: Closing the Skills Gap,” the committee discussed career and technical education (CTE), as well as apprenticeships as a strategies to addressing the lack of qualified, skilled workers needed by business and industry. Other Committees on both sides of Congress are also trying to figure out how to chip away at this issue.

WIPP members come to the workforce development issue from two angles:  one as an employer and one as a woman who likely experienced additional challenges in the workplace.  We are sensitive to making sure women are an important part of the workforce and treated fairly.  The article “10 facts about American women in the workforce,” highlights particular issues that women struggle with such as the wage gap, labor participation rates and paid maternity leave.

In fact, the President’s daughter, Ivanka Trump, has also brought forth the struggle with childcare as a priority issue for this Administration— with good reason. Most young children in the U.S. have parents who work outside the home or are business owners. According to the Brookings Institute, in 56% of married families with children under six, both parents work.  For single mothers the employment rate is 6%. Childcare is a necessity for these families, and unfortunately often unaffordable in the United States. Working families are spending on average between 29% to 52% of their take-home pay on childcare costs, yet the U.S. Department of Health and Human Services concludes that affordable childcare should not exceed 7% of family income.

Workforce development is a new issue to WIPP’s policy team and we welcome your thoughts and experiences.  Our goal is to ensure that the voice of women business owners is part of the discussion in both Congress and the Administration.  Businesses of all sizes share a common goal of building America’s workforce to adapt to the economy of tomorrow.  Women as business owners should be taking the lead in this effort by taking steps from strengthening women’s participation in STEAM, to being visible in the highest positions in business and industry.  There is so much work to do and our voice is critical to the solution.

President’s Corner – June 2018

Action always beats intention – and the future depends on what we do today.

Candace Waterman         WIPP President & CEO

From its inception, the core of WIPP’s mission has been uniting women entrepreneurs across the country to raise their voices and take action on issues impacting their business.  At WIPP we know that engagement of women business owners, like you, as well as organizations and corporations that support women entrepreneurship will lead to better policies and more accountable public officials.

To help us in our work to improve the economic and regulatory climate for women in business, I’m excited to announce WIPP’s 2018 Advocacy Pillars:

  • Create Parity for Women-Owned Small Businesses in Federal Contracting
  • Infrastructure Improvements
  • Fairness in the Workplace
  • Modernizing Our Tax Code
  • Increasing Access to Capital for Women

These pillars represent the core issues critical to the success of women business owners and the areas of policy WIPP will focus on in our advocacy efforts. WIPP’s Economic Blueprint provides you with a deep dive in each of these issue areas and discusses some of the current legislation as well as WIPP policy recommendations on our 2018 Advocacy Pillars.

In addition to our focus on advocacy, access to procurement opportunities is a top priority for WIPP. We are also launching our 2018 Procurement Education Platform which focuses on the following topics that are in alignment with, and support our Advocacy Pillars:

  • Doing Business with the Federal Government
  • Building Capacity
  • Financing Growth

We will work to bring you relevant educational content, webinars, events and develop partnerships that help support these key areas to federal contracting success.  WIPP already has an extensive catalog of helpful recorded webinars you can explore and a number of upcoming events around our popular procurement initiatives – Give Me 5 and ChallengeHER. We look forward to building on this great work.

The future depends on what we do today – and WIPP continues to take action to ensure that women business owners continue to be a strong economic force in the United States and increasingly, in the world.

House Passes FY2019 National Defense Authorization Act With Important Small Business Provisions

The House of Representatives passed the FY2019 National Defense Authorization Act by a vote of 351 to 66, prior to congressional recess. The annual defense spending measure would allow the Pentagon to spend $686 billion in the 2019 fiscal year. The legislation included important small business provisions:

Technical Assistance for Small Business: The Department of Defense (DOD) is directed to develop a small business strategy that would include a unified management structure for small business programs. DOD would also be responsible for outlining how they will engage in outreach and technical assistance to facilitate small business participation in defense programs.

Prompt Payment: The Department of Defense (DOD) is directed to accelerate payments to small business prime contractors and subcontractors, with the goal of making payment within 15 days of receiving an invoice.

Adjustments: Solicitations for small business contracts would have to include information about the agency’s policies and performance in responding to requests for compensation changes.

Expansion of Microloan Program: The loan limit in the SBA’s microloan program would be increased from $5 million to $6 million after a recipient’s first year of participation. The program allows intermediary lenders to provide loans for business development, as well as marketing, management, and technical assistance, to minority-owned or disadvantaged small businesses. Another change is the time allocation for technical assistance providers. Intermediaries could spend as much as 50% (instead of the current 25%) of their grant funds to provide information and technical assistance to prospective borrowers.

Increased Investment Limit for Small Business Investment Companies (SBICs): Banks and savings associations could invest as much as 15% of their capital and surplus in small business investment companies (SBICs) if approved by federal banking regulators. The limit is currently 5%. The maximum amount of leverage available to SBICs would be increased to $175 million from $150 million.

SBIR/STTR: Federal agencies are directed to set aside a share of their research budget for the Small Business Innovation Research program (SBIR). Agencies with larger research budgets must also set funds aside for the Small Business Technology Transfer program (STTR). This provision would allow federal agencies to use as much as 3% of reserved funds for program administration. It would also allow all agencies with SBIR programs in FY2018 through FY2022 to provide phase II grants, which focus on development and delivery of an innovation, regardless of whether a small business had first received a phase I grant for initial research.

Broadband & Information Technology: The SBA’s Office of Investment and Innovation is directed to designate an employee as the broadband and emerging information technology coordinator. They would be responsible for connecting small businesses with financing programs, and advising these businesses on how to acquire broadband and new information technology.

The Senate Armed Services Committee has approved their FY2019 legislation. The full Senate is expected to begin debate on the bill in the next week or two.

Federal Government Falls Short of Meeting Women-Owned Small Business Contracting Goal in FY2017

The U.S. Small Business Administration (SBA) released their FY2017 Small Business Procurement Scorecard this week, which shows that the federal government failed to meet the 5% goal of prime federal contracts awarded to woman-owned small businesses (WOSBs).  Only 4.71% of prime contracts – down from 4.79% in FY2016 – went to women-owned small businesses, though the amount of contracting dollars slightly increased from $19.7 billion to $20.8 billion.

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The Small Business Procurement Scorecard is released annually by SBA as a tool to measure how well federal agencies reach their small business and socio-economic prime contracting and subcontracting goals as well as report agency-specific progress.  The only year the federal government met the 5% goal of prime contracts awarded to WOSBs was in FY2015.  

On a positive note, SBA highlighted that the federal government overall met its 23% small business federal contracting goal for the fifth consecutive year, awarding 23.88% in federal contract dollars to small businesses totaling $105.7 billion.  Additionally, the 5% goal on subcontracting to woman-owned small businesses was exceeded, with 6.2% of subcontracts going to WOSBs, up from 5.7% in FY2016.

Learn more here.

 

Seven Small Business Bills Approved by the House of Representatives

This month, the House voted to pass seven of nine small business bills under suspension of the rules— a procedure used to quickly pass non-controversial bills. The seven bills that passed:

  • Small Business Development Center Cyber Training Act (H.R. 3170):  The Small Business Administration would offer cybersecurity and related planning assistance. The bill would require the SBA to train Small Business Development Center employees in counseling small businesses on cybersecurity questions.
  • Change Order Transparency for Federal Contractors Act (H.R. 4754):  Small business contractors and subcontractors seeking bids for federal construction projects would receive improved information from agencies including performance data and policies on change orders.
  • Women’s Business Centers Improvements Act (H.R. 1680):  The Office of Women’s Business Ownership’s responsibilities would be modified and it would be authorized to make larger grants to women’s business centers.
  • Small Business Development Centers Improvement Act (H.R. 1702): The SBA’s Small Business Development Center grant program would be modified and given new reporting requirements.
  • Spurring Business in Communities Act (H.R. 4111):  The creation of new Small Business Investment Companies in underserved states would be promoted under this bill.
  • Main Street Employee Ownership Act (H.R. 5236):  Employee cooperatives would become eligible for loans backed by the Small Business Administration. The bill would also allow loans to be made to a small business to facilitate employees’ purchase of the firm. The measure also would require additional agency outreach to promote employee purchase of companies.
  • Small Business 7(a) Lending Oversight Reform Act (H.R. 4743):  The Small Business Administration’s Office of Credit Risk Management would be codified and given new oversight responsibilities for the 7(a) program.

The two bills that did not pass were Small Business Advanced Cybersecurity Enhancements Act (H.R. 4668), which would create a central small business cybersecurity assistance unit and small business cybersecurity assistance units in each small business development center, and the SCORE for Small Business Act (H.R. 1700), reauthorizing the SCORE program.

WIPP Action Alert: Urge Your Members of Congress to Support the Accelerated Payments for Small Business Act!

Contact Your Members of Congress to Support the Accelerated Payments for Small Business Act (H.R. 5337)!

House Small Business Committee member, Rep. Steve Knight (R-CA) recently introduced the Accelerated Payments for Small Business Act of 2018 (H.R. 5337) which would direct federal agencies to make payments to small business prime contractors within 15 days of sending an invoice. This important legislation needs to move quickly to maintain assurance of prompt payment for small business contractors in the federal contracting arena.

Please contact your Representative and urge them to support the Accelerated Payments for Small Business Act of 2018.

Not sure what to say? Use this sample script:

My name is _____________, I am a constituent and [owner/founder/president] of [business name]. As a woman-owned small business contractor, I am calling to urge the Congress[woman/man] to co-sponsor H.R. 5337, the Accelerated Payments for Small Business Act of 2018. This bill is crucial for small business contractors, like me, because it would direct federal agencies to make payments to small business prime contractors within 15 days of sending an invoice. This is a common issue for small business contractors who rely on a consistent flow of income in order to be able to continue to serve their customer – the federal government. Ensuring prompt payment for small business contractors will help provide stability for companies who suffer large consequences when payments are delayed. Please ask the Congress(man/woman) to support H.R. 5337 and consider cosponsoring the bill. Thank you for your time.

Visit WIPP’s Legislative Action Center to Call Your Representative!

The Trump Administration Sends Request to Congress for Over $15 Billion of Spending Cuts for This Year

Using an obscure federal law, the White House sent a sweeping $15.4 billion rescission package to Congress which requests spending cuts this year across 10 federal departments.  This request comes from the Trump Administration in an effort to address the rising federal deficit.

Some programs in which cuts were requested include:

  • $50 million from the Rural Business-Cooperative Service (Department of Agriculture)
  • $30 million from the Economic Development Administration (Department of Commerce)
  • $4.3 billion from the Advanced Technology Vehicles Manufacturing Loan Program (Department of Energy)
  • $683 million from the Innovative Technology Loan Guarantee Program (Department of Energy)
  • $800 million from the Center for Medicare and Medicaid Innovation (Department of Health & Human Services)
  • $179.1 million from the Federal Highway Administration (Department of Transportation)
  • $53.4 million from the Federal Railroad Administration (Department of Transportation)
  • $46.5 million from the Federal Transit Administration (Department of Transportation)
  • $22.7 million from the Community Development Financial Institution (CDFI) Fund (Department of Treasury)
  • $151 million from Capital Magnet Fund, Community Development Financial Institutions (Department of Treasury)

These cuts, if approved, could impact current government contracts depending on the agency. In addition, cuts to the CDFI Fund and the Capital Magnet Fund will have a big impact on lending to minority and women-owned businesses and those in economically disadvantaged areas.

The House Appropriations Committee has 25 days to address the request by crafting its own bill based on the White House recommendations or decide not to act.  After 25 days, other House members can introduce their own rescissions legislation. Congress must act within 45 days of the request, which was made on May 8th.  If the House passes a bill, it would be taken up next by the Senate. Rescissions bills require only a simple majority for passage.

WIPP Works in Washington – May 2018

“Grow – Don’t Grow”

Ann Sullivan, WIPP Chief Advocate

We’ve all experienced a difficult friend or boss who tells you “do this” and then when you do it, they say “no I didn’t mean it that way.”  Then you spend the next hour trying to undo the thing they told you to do in the first place. Frustrating, right? 

That is largely what the federal government has been telling small businesses who enter public sector contracting.  The message to small businesses is “grow.”  The SBA and its stakeholders pour significant resources into helping small businesses succeed.  Those range from SBA District offices in every state, lending and counseling programs and support for programs like ChallengeHER that WIPP sponsors.

Organizations like WIPP encourage their members to think about federal contracting as a complement to commercial business.  We have spent an inordinate amount of resources promoting policies such as the women-owned small business contracting program, subcontracting and acquisition strategies designed to provide more opportunities for the government to buy from women-owned firms.

But then, the government says “wait don’t grow” by implementing a pretty rigid system of determining when a company is too big to be small.  SBA determines this by a system called size standards.  The government determines the average size of business revenue in industry categories and sets a size that a business cannot exceed in order to take advantage of small business contracting programs.  The SBA then takes the average of the last three years of your revenue, deciding whether you are small or have exceeded the size standard, bumping you into being a midsize company.  Ouch.

This is exactly the position WIPP Chair, Lisa Firestone finds herself in.  She testified at a House Small Business Committee hearing on the challenges larger small businesses face when approaching the top of their size standard. Lisa testified on behalf of WIPP, telling her story of watching her company, Managed Care Advisors go from a small boutique healthcare consulting company to the leading provider of Federal Workers’ Compensation Case Management Services. She grew a four-person company to facing a daunting dilemma of growing beyond the $15 million size standard for her industry.

Witnesses at the hearing, “No Man’s Land: Middle-Market Challenges for Small Business Graduates,” discussed the issue of options available to small businesses who reach the top of their size standard.  Should they stay small, sell their business or venture into a midsize company that has to compete for government business with the 110 very large companies? According to Bloomberg Government’s recent report, Mid-Tier Market Report: 2018, only 325 companies have made the decision to be a midsize vendor to the federal government.  This is in contrast to the 118,000 small businesses who sell to the federal government.

How can this trend be reversed?  The Montgomery County Chamber of Commerce, a WIPP partner in the initiative, “Pathway to Growth” proposes the following recommendations:

  1. Agency: Bring Multiple Award Contracts (MAC) requirements in line with the capabilities of midsize firms. It is essential to sustain midsize businesses participation on these MACs to diversify the types of businesses engaging in the federal market.
  2. Regulatory: Require a five-year look-back for the purpose of Small Business Administration (SBA) size determination. Due to the long contract award process and significant size of task orders, small businesses can quickly outgrow their size standard without having the time and resources to invest in firm infrastructure. This change would allow businesses a smoother transition by changing the receipt calculation by using the lowest three of these preceding five years of receipts, to determine the average.
  3. Legislative: Deduct research and development (R&D) expenses and expenditures from total revenue for size determination. This recommendation supports the government’s initiative to stimulate innovation and allows companies to pursue and develop new products and processes, without undue penalty.

The execution of these proposals would set the record straight: small business owners should grow their business – and those that do should not be penalized for that growth but supported by our federal government. It’s time to end the mixed signals.

President’s Corner – May 2018

Some people say timing is everything, but I say timing is the only thing!

WIPP President, Candace Waterman @CandaceWaterman

I have spent over 30 years in the business world, as a corporate executive, a business owner and almost 13 years with Women’s Business Enterprise National Council (WBENC) helping women-owned firms get access to growth opportunities through corporate and government procurement.

For over a decade, I have worked with WIPP as a one of our partners. Thus, with the announcement of the WIPP and WBENC Strategic Partnership, the time was right for a new challenge that would harness my expertise, my network of wonderful WBENC partners and constituents, and my passion for leveling the playing field for women in business.  I am honored, and humbled to be stepping into the role of WIPP President this month.

What a future this organization has before it!  The WIPP and WBENC Strategic Partnership is a win, win, win – a win for WBENC, a win for WIPP, and a win for women business owners across our nation.  WIPP’s public policy efforts and federal procurement education programs are to become an important benefit that WBENC’s 14 Regional Partner Organizations will offer to WBEs certified in their regions.  WBENC will be adding the voices of its over 14,000 certified women-owned businesses to WIPP’s national advocacy work in Washington, ensuring that women business owners will continue to be a force to be reckoned with on Capitol Hill.

WIPP has been doing amazing work for decades, yet many women business owners don’t realize the depth and breadth of WIPP’s impact on policy and the entrepreneurship ecosystem.  My first goal as WIPP President will be to raise the brand awareness for WIPP.

We’ll be creating an “Each One, Reach One” campaign, in which every person that has been engaged with WIPP will have the tools to become an ambassador for this great organization by reaching out to at least one woman business owner and bringing them into the WIPP community.  With a refreshed focus and new partnerships, we will work to improve the visibility of this great organization and all its accomplishments through our expanded network of women business owners.  I am committed to make WIPP a household name, ensuring that current or prospective women entrepreneurs know that WIPP is tirelessly working to create an economic and policy climate they need to succeed.

Second, I plan to work with our top-notch policy team to leverage the economic impact of women-owned firms in this country to expand our policy reach.  We will not only continue to take the voice of the Boardroom to the Halls of Congress, but with new partnerships that provide a regional reach and WIPP’s stellar reputation in the policy arena, we will get women business owners engaged in grassroots advocacy in their communities as well.

There are so many policy challenges and opportunities before us on issues like procurement, infrastructure, implementation of tax reform, access to capital, and workforce development.  In my role as WIPP’s President, I will dedicate my full resolve to ensuring that women’s entrepreneurship continues an upward trajectory and business owners, like you, have continued success and growth.

Thank you again for this opportunity and I look forward to meeting you all!

How Can My Unpopulated Small Business Joint Venture Get a Clearance?

When the SBA issued its final rule concerning its new Small Business Mentor Protégé Programs, it adopted a major change for 8(a) and small business joint ventures:  no more populated joint ventures. Instead, the rule provides that where a joint venture is formed as a separate legal entity, like a limited liability company, it may not have its own separate employees to perform contracts awarded to the joint venture.

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By Megan Connor, Partner PilieroMazz

For contractors well-versed in the National Industrial Security Program Operating Manual (“NISPOM”) and who otherwise pursue and perform cleared contracts, the SBA’s move away from populated joint ventures in favor of unpopulated joint ventures raises some eyebrows. A joint venture without any personnel of its own cannot obtain a facility clearance (“FCL”) because an FCL always depends on the personnel security clearance (“PCL”) of the company’s key management personnel, including the facility security officer (“FSO”). In other words, the only way a contractor receives an FCL is if it has cleared employees.So how, then, can a small business comply with the SBA’s regulations requirement for an unpopulated joint venture (if a separate legal entity) and the requirements of Defense Security Service and NISPOM?

By “populating” the joint venture with administrative personnel. This is expressly allowed under SBA’s regulations. While the SBA does not want separate legal entity joint ventures populated with direct labor, the regulations expressly allow a joint venture to have “its own separate employees to perform administrative functions.”  13 C.F.R. § 121.103(h). Thus, a joint venture may be populated with employees and still be considered an unpopulated joint venture so long as these employees are not performing the contracts awarded to the joint venture.

The administrative personnel employed by an unpopulated joint venture can be the individuals upon whom the joint venture’s FCL is based. For instance, the joint venture could employ a single management position, the FSO, and the joint venture’s FCL would be contingent on the FSO’s PCL. Although the NISPOM requires the FSO tobe an employee of the cleared entity, there is no requirement for the FSO to be a full-time employee, so the FSO could split his time as the FSO of the joint venture and as the FSO of one of the venturers. The FSO could not perform direct labor on the joint venture’s contracts, but could (and should) be performing administrative functions, like supervising the joint venture’s compliance with the NISPOM and maintaining the joint venture’s records in the Joint Personnel Adjudication System.

____________________________________________________________________________________________Megan Connor is a partner with PilieroMazza and focuses her practice in the areas of government contracts, small business administration programs, business and corporate law, and litigation.  She may be reached at mconnor@pilieromazza.com.