Category Archives: Government Programs

Senator Heidi Heitkamp Introduces Bill to Reauthorize the Interagency Committee on Women’s Business Enterprise

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Senator Heidi Heitkamp (D-ND)

Senator Heidi Heitkamp (D-ND) has introduced S. 3165, a bill to reauthorize the Interagency Committee on Women’s Business Enterprise. This Committee was created by an Executive Order in 1979, and played a vital role in monitoring, coordinating, and promoting programs within federal agencies that support and strengthen women’s business ownership. By reauthorizing this Committee, which has been defunct, it will renew focus on the importance of women in business and encourage key departments and agencies to continue to provide women in business access to technical assistance, government contracts, financial support via grant and loan programs, and business training.

WIPP has submitted a letter of support for Senator Heitkamp’s legislation reauthorizing this Committee.

To learn more, take a look at the Executive Order establishing the Interagency Committee on Women’s Business Enterprise.

President Trump Signs Bill to Improve SBA 7(a) Loan Program

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President Trump signed into law a bill to strengthen the Small Business Administration’s (SBA) oversight of its loan programs and increase maximum lending authority. Championed in the Senate by Sens. Jim Risch (R-Idaho) and Jeanne Shaheen (D-N.H.) and in the House by Reps. Steve Chabot (R-Ohio) and Nydia Velazquez (D-N.Y.), the Small Business 7(a) Lending Oversight Reform Act, will strengthen and improve one of the core SBA loan programs responsible for providing access to capital to entrepreneurs.

In FY2017, the 7(a) program supported more than $25.44 billion combined across 62,430 loans. According to the SBA, 7(a) lending to women-owned businesses (both majority and minority-owned) grew in total dollar and volume in FY2017, exceeding $7.5 billion which is an increase of $298 million from FY2016.

The law will help the SBA increase efficiency of the (7)a Loan program and expand its reach by strengthening the SBA’s Office of Credit Risk Management which manages the loan program, enhancing the SBA’s lender oversight review process, providing the SBA Administrator with flexibility to increase the program’s maximum lending authority should it be reached, and requiring the SBA to perform a full annual risk analysis of the program.

Trump Administration Releases Plan to Reorganize the Federal Government

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In a wide-ranging blueprint to overhaul the federal government, the White House released a report entitled, “Delivering Government Solutions in the 21st Century,” which outlined a wide-ranging plan to overhaul the federal government. The blueprint would impact nearly every agency.

This effort stems from an Executive Order signed by President Trump last year which directed the Office of Management and Budget (OMB) to work on a comprehensive plan to reorganize the executive branch and reduce duplication and redundancy while improving efficiency. Outlined in the report, beginning on page 93, is a recommendation to streamline small business programs across the federal government, specifically citing duplicative programs in the Small Business Administration and the U.S. Departments of Agriculture, Transportation, Treasury, and Veterans Affairs.

Programs dealing with small business lending, various certifications and contracting support would be consolidated and managed within the Small Business Administration. If there are contracting programs requiring technical expertise, those programs could continue to reside in their current agency. Per the report, the goal would be to “strengthen and streamline SBA’s operations across two of its primary program areas: 1) capital access; and 2) Government contracting support.”

It is important to note that most of these actions would require congressional approval.

WIPP Statement Regarding the SBA Inspector General’s Audit Report on the WOSB Procurement Program

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The SBA Inspector General (IG) issued an audit report late last week that found 50 of the 56 sole source awards the IG chose to review were done incorrectly, either by the contracting officer or the woman-owned business.  They found paperwork problems, such as self-certifying WOSBs that did not have all of their required documentation in place, contracting officers that awarded a sole source with a NAICS code that was not in the WOSB program or awarded a sole source under a NAICs code that the WOSB had not indicated they were eligible to perform the work.

To read the full report visit:  https://bit.ly/2tyir3G

To those of us who have been involved with the Women-Owned Small Business (WOSB) Procurement Program from the inception, this is not the first time the SBA Inspector General has aggressively advocated to do away with self-certification in the WOSB program. The Congress passed legislation in 2015, instructing the SBA to stand up a certification program, replacing self-certification. The SBA has stated that it is in the process of putting together this directive sometime later this year.

There is history behind this effort – when the program was put in place in 2011, it would have taken decades and further delays for an SBA certification program to be put into place.  Therefore, the SBA opted to allow self-certification and third-party certification in its stead.  The IG was directed to aggressively investigate fraudulent companies, but we are not aware of any such efforts or reports from the IG issued with that focus.  In fact, WIPP sent a letter to the IG asking for status of investigations into fraudulent companies and is not aware of a response.

Specifically, the IG makes the following recommendations:

  1. Conduct eligibility reviews for the firms identified in this report that lacked the required documentation in Certify.SBA.gov and require those firms to remove their designation in the System for Award Management.
  2. Initiate debarment proceedings, if warranted based on the results of eligibility reviews in Recommendation 1.
  3. Implement a Women-Owned Small Business Federal Contracting Program certification process as required by the National Defense Authorization Act for FY2015.
  4. Conduct quarterly reviews of firms with newly obtained WOSB or EDWOSB status, to ensure that they have the required documentation in Certify.SBA.gov, until SBA implements a Women-Owned Small Business Federal Contracting Program certification process.
  5. Conduct quarterly reviews of Federal Procurement Data System-Next Generation data for Program set-aside contracts to ensure Federal agencies’ contracting officers used the appropriate North American Industry Classification System codes and take the necessary action(s) with identified exceptions.
  6. In coordination with the Office of Federal Procurement Policy and the General Services Administration, strengthen controls in the Federal Procurement Data System-Next Generation to prevent Federal agencies’ contracting officers from using ineligible North American Industry Classification System codes.

SBA Response

At the end of the report, the SBA provides a rebuttal to the IG’s recommendations.  The SBA reiterates its intention to establish a certification program sometime this year with implementation next year.  The SBA questions the IG’s data conclusion saying that miscoding on FPDS does not necessarily mean that the sole source contract was improperly awarded and rejects the recommendation that SBA should check quarterly reviews on women new to the program and on contracts awarded through the program, ensuring contracting officers used the proper NAICs codes.  The SBA also disagrees with the IG interpretation that sole source contracts should only be awarded when SBA has a certification in place.

WIPP Perspective

WIPP led a 13- year effort to put in place the WOSB Procurement Program garnering the support of women-owned companies nationwide.  The SBA’s IG audit found much of what we already know antidotally – that the program is complex, that contracting officers and women alike are confused by the requirements, and more education is needed.  We do not agree with the IG that it was the intention of Congress to require an SBA certification before any sole source awards could be issued.  We know this to be true because we were there when it happened – leading the charge on this effort. Furthermore, we find the recommendation that WOSBs should be monitored quarterly for compliance as demeaning given the recommendation is specific to WOSBs only.

We agree that the WOSB program should be better utilized by the contracting community.  The government has only met its 5% women-owned goal once.  Since 2013, WIPP has educated tens of thousands of women on federal contracting opportunities via the WOSB procurement program through our ChallengeHER and Give Me 5 programs.  We call on Congress and the SBA to encourage federal agencies to use the WOSB program and simplify the requirements, which have proven to be confusing.  We will continue to promote federal contracts to women-owned companies both in our advocacy and our programming.

If you have any questions regarding this report, please contact WIPP’s Chief Advocate, Ann Sullivan at asullivan@madisonservicesgroup.com.

WIPP Works in Washington – June 2018

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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.

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

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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

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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.

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

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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.

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

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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.

Entrepreneurs shine during National Small Business Week

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By Linda McMahon, SBA Administrator

Through awards ceremonies, media interviews and community events, we honor entrepreneurs whose achievements stand out. As an entrepreneur myself, I know the hard work that goes in to starting and building a small business – efforts that don’t often get the attention they deserve.

Honorees in this week’ spotlight do not cast a shadow that dims the efforts of others; rather they serve as a beacon – to competitors, up-and-comers and communities as a whole. They show what is possible. They are innovators and problem solvelinda-mcmahon-high.jpgrs, creating products and services that are better, smarter or more efficient than what came before. They are risk takers. And through their success, they inspire others to dream and to create small businesses of their own.

Small businesses contribute so much to our communities and economy. They create two out of every three net new jobs in the private sector. More than half of all Americans either work for or own a small business. Entrepreneurs are not only making a living for themselves, they are making their neighborhoods vibrant places to live and work and contributing to our nation’s economic strength.

The U.S. Small Business Administration is so proud to have been a part of small businesses’ success for 65 years. Since 1953, the SBA has been supporting entrepreneurs with the tools they need to succeed. The Agency – through its headquarters in Washington, DC; its 68 district offices nationwide; and resources partners like Small Business Development Centers, Women’s Business Centers, Veterans Business Opportunity Centers and SCORE chapters – serves entrepreneurs at every stage of their lifecycle. It guarantees loans for entrepreneurs who can’t get capital from other sources, mitigating a lender’s risk. It offers counseling on starting and scaling a business, from how to draft a business plan to how to export products overseas. It trains small businesses to compete for government contracts. And it helps those recovering from a declared disaster get back on their feet.

Whether they are starting up, expanding or getting through a tough time, the SBA is the nation’s only go-to resource for small business backed by the strength and resources of the federal government. It powers the American Dream. And the SBA is working to make that dream accessible to more Americans by modernizing its application processes, improving online resources, and streamlining how technology is used to deliver services more efficiently and effectively.

National Small Business Week honors entrepreneurs who have used these resources to make their lives and their communities better. And the SBA shines a light on their achievements, I hope it will illuminate the path for even more aspiring entrepreneurs following in their footsteps.

Linda McMahon serves as the 25th Administrator of the U.S. Small Business Administration. As a member of President Trump’s cabinet, she advocates on behalf of the 30 million small businesses in America, which employ nearly half of all American workers and account for 56.8 million jobs.