|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.
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.
“Grow – Don’t Grow”
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:
- 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.
- 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.
- 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.
Some people say timing is everything, but I say timing is the only thing!
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!
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.
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 email@example.com.
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 solvers, 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.
HSBC Chairman Chabot Urges Inclusion of Small Business Bills in FY19 NDAA
Last week before the House Committee on Armed Services, Chairman Steve Chabot of the House Small Business Committee urged members to incorporate a package of 13 bipartisan small business bills in the FY 2019 National Defense Authorization Act. The bills include legislation addressing SBA loan programs and technical assistance programs such as Women Business Centers, small business lending, cybersecurity, government contracting, and other issues impacting small business.
Legislation to Reform & Modernize the IRS Makes it Out of House Ways & Means
The House Ways and Means Committee last week approved the passage of the Taxpayer First Act (H.R. 5445), legislation sponsored by Oversight Subcommittee Chairman Lynn Jenkins (R-KS) and ranking member John Lewis (D-GA). The bill would improve the independent appeals process, taxpayer services and enforcement. It also updates the IRS and Tax Court structure.
Click here to learn more about the legislation and other recent bills relating to IRS reform passed out by the House Ways & Means Committee.
House Passes Bill to Ease Financial Regulations with Goal of Improving Lending
The House approved H.R. 4790, the Volcker Rule Regulatory Harmonization Act by a vote of 300-104. The legislation would exempt banks with total assets of $10 billion or less and comprised of 5% or less of trading assets and liabilities from the Volcker Rule. The rule prohibits banking agencies from engaging in proprietary trading or entering into certain relationships with hedge funds and private-equity funds. The bill would also grant exclusive rulemaking authority under the Volcker Rule to the Federal Reserve Board. The intent of the legislation is to alleviate the compliance burden on small banks, which would help improve capital markets and lending, especially to small business.
With Possible Trade War Looming, HSBC Holds hearing on the State of Trade for Small Business
The House Small Business Committee heard from a panel of business owners and experts on the state of international trade for small businesses. The hearing’s focus was the State Trade and Export Promotion (STEP) Grant Program and the federal government’s overall efforts to increase small business exports. However, with tariffs proposed by the administration and discussion of a possible trade war with China, witnesses highlighted how recent activity would impact their businesses and small business exporters at large.
FY2018 Omnibus Spending Package Signed into Law
On March 23, President Donald Trump signed a $1.3 trillion omnibus spending bill for FY2018—10 percent higher than FY2017 due to the budget agreement reached last month by lawmakers.
The Small Business Administration (SBA) received $18 million less than in FY2017. SBA received $247 million for entrepreneurial development grants including $130 million for Small Business Development Centers; $18 million for Women’s Business Centers; and $11.5 million for the SCORE program. SBA’s business loan program will have new authority to guarantee $29 billion in 7(a) loans.
For government contractors, passage of this bill means a compressed procurement and grant cycle. The new Fiscal Year started in October but has just now been funded. That means agencies have one quarter instead of four to procure goods and services.
Here is a chart of WIPP’s FY2018 appropriations requests and what was included in the FY2018 Omnibus bill signed by the president.
FY2018 Entrepreneurship Funding Update
Small Business Administration – Financial Services and General Government Appropriations
|Program||FY17 Enacted||FY18 WIPP Requests||
|Microloan Program: Lending||$44 million||$44 million||
|Microloan Program: TA||$31 million||$31 million||
|PRIME||$5 million||$10 million||$5 million|
|Women’s Business Centers||$18 million||$21.75 million||
|SBA Office of Advocacy||$9.22 million||$9.3 million||
Small Business 7(a) Lending Oversight Reform Act of 2018 Unanimously Approved in Both the House & Senate Small Business Committees.
Legislation (H.R.4743/ S.2283) to increase the Small Business Administration’s (SBA) oversight authority over the 7(a) loan program for the purpose of improving the efficiency and reach of the program, passed both the House and Senate Small Business Committees. The Small Business 7(a) Lending Oversight Reform Act of 2018 would:
- Strengthen SBA’s Office of Credit Risk Management by outlining in statute the responsibilities of the office and the requirements of its director
- Enhance SBA’s lender oversight review process, including increasing the office’s enforcement options
- Require SBA to detail its oversight budget and perform a full risk analysis of the program on an annual basis
- Strengthen SBA’s Credit Elsewhere Test by clarifying the factors that must be considered
Read the House Small Business Committee’s Press Release here.
Chabot Supports Bill to Ensure Small Contractors Get Paid Quickly
House Small Business Committee Chair Steve Chabot (R-OH) released a statement recently in support of Rep. Steve Knight’s (R-CA) bill, the Accelerated Payments for Small Businesses Act, encouraging federal agencies to make payments to small business prime contractors within 15 days of sending an invoice.
Read Chair Chabot’s statement here.
National Small Business Week Virtual Conference
SBA has partnered with the SCORE Association to offer a NSBW Virtual Conference which will take place May 1- May 3, between 12:30pm ET and 6:30pm ET each day. The conference will offer 12 educational webinars, mentoring sessions, networking opportunities and resources in a three-day event. You will hear from industry experts, such as Visa, Google, Chase, Constant Contact, Square and more. They will share insider tips on various aspects of online marketing, financing, customer service, cybersecurity among other topics.
Register for the NSBW Virtual Conference here.
SBA Office of Advocacy to Host a Regulatory Reform Roundtable and a NAFTA Outreach Meeting in Atlanta
Next week, the SBA Office of Advocacy will be hosting a Regulatory Reform Roundtable and a NAFTA Modernization Outreach meeting for small business owners in order to gain insight into which specific federal regulatory burdens present the biggest barriers to small business growth and get input on possible NAFTA changes.
Meeting will be held:
- Tuesday, April 10, 2018: Regulatory Reform Roundtable at 8:30am with a special focus on environmental regulatory issues at 2pm
- Location: GTRI Conference Center, 205 14th Street, NW, Atlanta, GA
- Wednesday, April 11, 2018: NAFTA Modernization Outreach meeting at 9:00 a.m. for small business owners.
- Location: Georgia Department of Economic Development, 75 5th Street Northwest, 10th floor, Atlanta, GA.
To register for these meetings, visit SBA’s website.
National Women’s Business Council Releases Reports on Crowdfunding
The National Women’s Business Council released two new research reports on success factors for women business owners access to small business finance, finding that the first 30 days of crowdfunding campaigns matter the most and personal stories play a vital role in reaching fundraising goals. The reports also showed that while it helps to have large network, the way you leverage that network to help you with funding your business is equally important to your success at raising money.
Read the press release and access the reports here.
For all women business owners who have secured, or are seeking federal contracts, the first order of business is remembering the incredible effort it took to get the Women-Owned Small Business Procurement Program in place. WIPP and thousands of women across the country pushed for this program and as a result, today women are awarded
nearly $18 billion in contracts through the program. As part of that 13-year effort, I have had the privilege to gain insights on successful strategies.
Last month, the Department of Treasury held a women’s history month event organized by Lisa Jenkins, who heads the small business office and is an incredible advocate for women-owned businesses. I thought I would share my five tips for being successful in the federal marketplace I presented at the event. PS: If you do not know Lisa Jenkins, make it your business to do so.
Since the federal government just received its FY18 money, expect spending to be fast and furious until the end of the fiscal year—September 30. Think about the strategies you have in place to respond to a myriad of requests for information and Sources Sought notices. Remember to ask agencies to consider setting aside the contract for women-owned companies and familiarize yourself with the WOSB sole source rules.
- Know more than the person you are meeting with.
Dig deep—read the Small Business part of the FAR (https://www.acquisition.gov/far/html/FARTOCP19.html) and all the government contracting articles/news. you can get your hands on. Look up WIPP’s Give Me Five http://www.giveme5.com program and take classes that are applicable to building your knowledge base. Look up the agency’s FY18 funding and understand their focus (Give Me Five: Follow the Money Webinar).
- Seek to establish relationships in unconventional ways—go to events where the person you are trying to meet is speaking and get creative about getting an introduction to them through your networks. Follow them on social media. Only ask for meetings when you have all your ducks in a row and you have a specific ask.
- Join organizations that work with agencies and become a leader. It is not enough to join an organization at the lowest level. The real benefit comes from being a leader. Organizations feature their leaders, give them opportunities to introduce speakers and assist their leaders in connections that are helpful in the federal contracting arena.
- Learn how to use the SBA set-aside programs, such as the WOSB procurement program and be prepared to educate agency contracting officers on the benefits of using the program. Don’t be offended that contracting officers don’t know your program—you can be the educator. That’s a good place to be.
Understand the budget process—it’s all public information. Know how your programs are funded. Look up the agency’s funding and understand their focus (Check out Give Me Five: Follow the Money Webinar). Although this can be complicated, understanding this process and using it to your advantage will give you a huge leg up on the competition.
Spring is upon us and with spring comes … National Small Business Week!
SBA Administrator Linda McMahon announced that this year’s National Small Business Week will be held from April 29-May 5. Every year since 1963, the country spends a week recognizing the critical contributions of our small business owners. More than half of Americans either own or work for a small business, and small businesses create about two out of every three new jobs each year. And, of course, women business owners are a significant part of that small business story—growing at a rate four times faster than their male counterparts!
This year’s events kick off in Washington, D.C., where the administrator will recognize and award outstanding small business owners and resource partners from around the country. It will continue with a bus road show stopping in various cities, where Administrator McMahon and SBA staff will meet with small business owners and hold roundtable discussions. Read more here.
Speaking of small business owners who really contribute, we want to give you the opportunity to get to know WIPP’s board better. This month, we’re featuring Board Vice Chair Angela Dingle, owner of Ex Nihilo Management. Read on for a short Q&A with Angela
Q. Why did you join Women Impacting Public Policy?
A. I joined WIPP because I was and continue to be impressed with its non-partisan approach to advocacy. The issues that are being discussed on Capitol Hill are important to me as a woman business owner and membership in WIPP means I have a seat at the policy table during the discussions. Someone once said to me, “get into politics or get out of business.” Well, I jumped in with both feet and haven’t let up yet.
Q. What about WIPP is most beneficial for your business?
A. Thanks to my WIPP membership, I’ve testified before policymakers, received help navigating federal contracting and benefitted from networking opportunities and media exposure. Being a part of WIPP makes me feel connected to issues affecting women entrepreneurs and women in the workforce.
By Carolyn A. Schultz
Starting and maintaining a business by yourself is an overwhelming process. I’m not afraid to admit it, because I know that’s a normal feeling and many of us have been there.
As a longtime marketer and writer, but a recent newcomer to the women entrepreneurs “club,” I’ve been inspired to get involved in ChallengeHER and WIPP, and I appreciate this opportunity to introduce myself with a thank you message and a plan.
I am a marketing consultant and writer, and started my own business in 2015, after 15+ years putting small businesses and nonprofits on the map. With Carolyn A. Schultz Marketing & Communications, I provide personalized services from start to finish for articles, proposals, brochures and other winning marketing materials.
While I have helped numerous other businesses navigate and win multi-million-dollar project proposal processes and contracting with local, state and federal governments, and I look forward to continuing helping others, I am also determined to help myself and my own business grow. Starting everything from scratch on your own is tough, but doable with the right support system and guidelines that work for you and your goals.
That’s where ChallengeHER and WIPP come in. ChallengeHER’s program in New York in November was a helpful, inspiring call to action that jumpstarted idea development for my business, and introduced me to a new powerful network of government resources and fellow women entrepreneurs in a variety of fields. The “Give Me Five” webinar program with WIPP has also been extremely helpful, as I’ve discovered recently. Wherever you are, you can hear words of wisdom from experienced experts during hour-long presentations that help us divide and conquer the many steps needed to win work and grow our businesses.
During my 15+ year career and during the first two years of my business, one of the most important marketing lessons I’ve learned is that new opportunities don’t always come to you automatically. While chance and good luck certainly play key roles, success is usually something you have to work for, as you make your own opportunities. That’s a big reason why networking and learning through ChallengeHER and WIPP have become key strategies for growing my business.
I look forward to seeing you at an upcoming event soon, and continuing our journey together as women entrepreneurs building our businesses!