|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.
By John Stanford, WIPP Government Relations
The Department of Labor and FAR Council issued final regulations that require federal contractors to disclose labor violations from the past three years. This blog updates an earlier edition with what you need to know. For more details or if this impacts your business, I encourage you to read official guidance here.
Ahhhh, Labor Day. The unofficial end of summer. A century-old government-granted day off to squeeze in another day at the pool, buy the last of the school supplies (who really needs a protractor anyway?), see the grandparents, and now – for federal contractors – an opportunity to review your company’s legal history.
It doesn’t sound quite right, does it? But for thousands of federal contractors, that is exactly what newly finalized regulations mean. I will get into to the details and timeline of the new requirement in a moment, but first, a little history on a change WIPP has watched closely.
In 2014, President Obama issued an Executive Order with the goal of barring bad companies from winning federal contracts. The following summer the Labor Department (DOL) and the FAR Council (overseers of contracting rulebook, “the FAR”) proposed how this could be achieved. Last week, final rules were published – and contractors nationwide let out a collective groan.
You see, excluding companies with a history of bad acts from winning government work – a generally universally accepted idea – is not easy. WIPP said just that in our formal comment last year. We agreed that companies that follow the rules should not have to compete against companies that break them for federal contracts. But the proposed system would place burdens on women-owned contractors and dump paperwork requirements on contracting officers.
Our comment, along with hundreds from individual business owners and other trade groups, did little to sway the government from moving forward. The new requirement detailed below goes into effect on October 25, 2016.
The regulation requires federal contractors and subcontractors to disclose violations of 14 federal labor laws and the equivalent state laws from the previous three years. Exemptions were provided for companies with contracts valued less than $500,000. Prospective federal contractors will need to declare if they had labor violations in the previous three years when submitting an offer. During an initial evaluation, contracting officers will see that declaration (a simple “yes” or “no”), without any additional detail or explanation.
Later, if a contractor were likely to win an award, the contracting officer would have to decide if the contractor is a responsible company (a requirement of all government contracts already). It is in this phase that details like appeals, remediation, or mitigating factors could be explained. Contracting officers will attempt to identify companies with “serious”, “willful”, “repeated”, and/or “pervasive” violations and not award them contracts. Companies with minor violations could still be considered responsible and win contracts.
In what the government views as a compromise since their initial proposal, the system will be phased-in over the next two years. The DOL released the following timeline:
Phased-In Implementation Schedule
- Week of September 12, 2016:Preassessment begins, through which current or prospective contractors may come to DOL for a voluntary assessment of their labor compliance history, in anticipation of bids on future contracts but independent of any specific acquisition.
- October 25, 2016: Thefinal rule takes effect. Mandatory disclosure and assessment of labor law compliance begins for all prime contractors under consideration for contracts with a total value greater than or equal to $50 million. The reporting disclosure period is initially limited to one (1) year and will gradually increase to three (3) years by October 25, 2018.
- January 1, 2017: The Paycheck Transparency clause takes effect, requiring contractors to provide wage statements and notice of any independent contractor relationship to their covered workers.
- April 25, 2017: The total contract value threshold for prime contracts requiring disclosure and assessment of labor law compliance is reduced to $500,000.
- October 25, 2017: Mandatory assessment begins for all subcontractors under consideration for subcontracts with a total value greater than or equal to $500,000.
Needless to say, our concerns remain. And before I go into a few of them, I would point out that the $50 million threshold sounds like a lot. It includes, however, companies on a multiple award contract with a ceiling amount above $50 million. Meaning a company that wins a BPA or IDIQ valued above $50 million, though not necessarily the amount of work the company will actually perform, will face the October 2016 deadline.
On a broader level, the rule simply is not ready for primetime. The Labor Department and FAR Council chose not to include what state labor law violations must be reported. It is impossible to gauge the impact of a regulation when missing significant portions.
What is in the rule, however, is equally concerning. In some cases, violations that require reporting will not be be fully adjudicated. That is, companies would have to report decisions against them that may ultimately be overturned – as nearly a third of NLRB decisions have been.
This is compounded by WIPP’s worry that simply having violations on record will “blacklist” companies without providing any opportunity to offer explanation. With limited resources and time, contracting officers may elect to avoid companies with any disclosed violations, despite the intent of the order to only bar violations of a certain severity.
Burdens on subcontractors are also being created. They must report violation history as well – directly to DOL. This was a notable change in the final rule, by making the subcontractor and the Labor Department engage each other, and not put the responsibility on the prime contractor.
At the same time the government has admitted it lacks the resources to answer all questions about weighing different labor violations from hundreds of thousands of subcontractors. Ultimately, this change could be the most damning, as many of these companies are unaware of the new requirements because they never sought business with the government in the first place.
Finally, the Fair Pay and Safe Workplaces requirement is one of many in a disconcerting trend of new regulations that specifically target federal contractors. Earlier this year, regulations raised the minimum wage solely for workers on federal contracts. New requirements regarding sick leave were also released. These make contracting with the federal government more onerous, particularly for women entrepreneurs seeking to enter the market. At a time when we want more competition and innovation in government, policies impacting only federal contractors put up barriers for entry.
Without question, WIPP supports efforts by the federal government to rid the contracting environment of businesses with a history of abusive and neglectful violations. In doing so, the government levels the playing field for the millions of businesses playing by the rules. But the government already has those tools and this rule will not achieve this goal. Instead, it will be harder to be a contractor, pushing the innovative products and services of women-owned businesses out of the federal market.
So to the federal contractors out there gearing up for a warm holiday weekend, fire up those grills, wear that final white outfit, and head into the office – it’s going to be a busy day.
John Stanford is part of WIPP’s Government Relations team in Washington, D.C., specializing in federal procurement and healthcare policy. When not bothering lawmakers about needed changes, he can be found in the woods at local golf courses.
Interview with Donna Ross Jones, Founder and CEO of Transition Music and Media Corporation
1. Tell us a little about your company and its mission.
Music is the heartbeat of our culture and our hand is forever on the pulse. We are passionate about music and the people who create it. Transition Music was originally formed with the mission to create new opportunities for artists, songwriters and composers. This became especially important when technology hit the industry, causing a massive music industry decline.
Today Transition is one of the top 100 music publishers in the world, with more than 1 million music performances globally each year. We unite music with some of the most watched content on the planet. We own a global music library and have a staff of award winning music creators and executives working daily to provide music and manage music process’s for all forms of visual media, from TV series, feature films to corporate productions to webisodes. Our first national production for the National Center for Missing and Exploited Children went viral and ignited a global conversation increasing awareness about wandering and the dangers facing children with autism.
2. Have you always planned on doing business with federal government?
No we had not always planned on doing business with federal government. In our continual goal of expansion and creating more opportunities for music creators, we routinely look at new markets. Knowing that the Federal Government is the largest purchaser of goods and services in the US we began exploring how and if there was an opportunity for us.
3. How have you proceeded with pursuing Federal Contracts?
We decided to invest in educating ourselves as to how and if the federal market place was a match for us. I began going back and forth to DC, working with the SBA and the Department of Commerce to understand the market and how Transition could be successful. We decided to invest the time and resources needed to obtain certifications when we learned Transition Music Corporation was the only WOSB music library of our size and scope, who was also an MBE and an 8a. We saw an opportunity to bring our “Hollywood” brand of expertise to the federal government through music and visual content creation, while assisting them in reaching their diversity goals.
How has this shaped your business?
It is still shaping our business. I keep going back to our mission “to create new opportunities for our creative community”. Pursuing business opportunities outside of mainstream entertainment creates new revenue streams making it possible for producers, writers, musicians, artists and so on to make a living using their gifts and doing what they love.
4. How do you think can ChallengeHER and Women Owned Small Business (WOSB) program help women-business owners in the process?
Working in the government space, like working any other market sector, is about investing time learning, making new contacts and building relationships. ChallengeHER and the Women Owned Small Business (WOSB) program give women the opportunity to make contacts and connect to resources to get the information needed to make informed decisions on all aspects of their business.
How has it helped your business?
Our efforts have resulted in contracts to produce marketing videos, and PSA’s for government agencies. Our music library is competing for music contract in multiple federal agencies and awards in recognition of our work, including Transition Music and Media being named the Minority Media Firm of the Year for the City of Los Angeles, by the Department of Commerce and the MBDA.
5. Could you share the key takeaways you took from the event?
I’ve attended several ChallengeHER and Women Owned Small Business (WOSB) events, and the key takeaways are always the same; come prepared knowing
who you want to talk to and why. Listen, you never know who you will learn from.
6. If you have won contracts under WOSB would you be willing to share size of the award? How has it impacted/grown you business? Hired new employees?
Transition holds multiple certifications; 8a, WOSB, and WMBE. Our contracts to date have been based on our 8a certification, however being a WOSB has been a part of every conversation, and people are probably checking that box too!
7. What percentage of your revenue comes from government contracts?
For YE 2016 we have forecasted 15%.
8. What contracts are you currently working on?
We are currently in production on 5 videos for the MBDA a division of the Department of Commerce. The videos being produced will tell the Minority Business Development Agency (MBDA) story, and educate the public, employees and stakeholders on MBDA products and services.
9. What have you worked on in the past?
More than 26 television series & 6 networks rely on Transition Music as their exclusive source for “ALL” things music; from composers, to production music, to licensing, to new artist, music supervision & building music revenue streams. Specifically, in the federal market Transition Music and Media has provided video production services and music for the SBA, MBDA, Center of Exploited and Missing Children (Funded by the DOJ).
10. What would you recommend other WOSBs doing business with federal government?
Do your research to determine the feasibility of opportunities, their size and scope and how long it typically takes to get a contract awarded to an incumbent. Over and over business owners say the certifications did not work for them and they wasted their time. It is critical to know that with our without any certifications, the federal government consists of people and people buy from who they like, so if you go into this with an expectation that the certifications will get you on a list, and the list will bring business opportunities to you, you will be disappointed and waste your company time and resources.
Interview with Boeing Supplier Diversity Manager, Champagne Bell.
- Tell us a little about The Boeing Company.
Champagne Bell: Boeing is the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space, and security systems. As a top U.S. exporter, Boeing supports airlines and provides products and services support to customers in 150 countries. We have global footprint and continue to expand it.
Boeing products and tailored services include commercial and military aircraft, satellites, weapons, electronic and defense systems, launch systems, advanced information and communication systems, and performance-based logistics and training.
- How does Boeing work with small businesses?
Champagne Bell: Boeing has contracts with 21,500 suppliers and partners globally and we focus on partnering worldwide for mutual growth and prosperity. Currently, we contribute over $5B to small and diverse businesses annually and Boeing is a part of the Billion Dollar Roundtable (note: an organization that brings together major corporations that make meaningful and measurable contributions to the economic growth of woman-owned and minority-owned companies).
- Do you have a supplier diversity program? Can you tell us little more about it?
Champagne Bell: Since 1951, Boeing has had a Supplier Diversity Program in place. In addition, we have also targeted initiatives and one of them focuses on women-owned enterprises.
Our commitment to small and diverse business enables us to manage our businesses and deliver value and solutions where our suppliers, Boeing, and customers win.
We are proud that our Supplier Diversity Program has demonstrated results including:
- Highest rating from Government customer.
- Received national industry awards.
- Dedicated enterprise Supplier Diversity team.
- Boeing has received recognition from our external and industry partners for its supplier diversity work.
- What role do subcontractors play in your government business?
Champagne Bell: Our subcontractors play a critical role on our business and help support our commitment to adhering to DOD Statutory Contracting and Subcontracting Goals.
- Do you have any programs to target women owned businesses for subcontracting?
Champagne Bell: Yes. One of our Strategic Initiatives focuses on enhancing relationships with eligible women-owned small businesses to ensure we maintain a viable supply chain of WOSBs to support our businesses.
- What are the key qualifications you are looking for among your suppliers/subcontractors?
Champagne Bell: Boeing is looking for suppliers who:
- Do their homework to fully understand how their products and services can directly benefit Boeing and the solutions we offer our customers.
- Share our commitment to performance excellence in terms of cost, quality, and delivery.
- Are financially healthy and are continuously focused on improving affordability and efficiency through Lean operations.
- Will share their knowledge for how we can all better manage our businesses and deliver value and solutions where our suppliers, Boeing, and customers win.
- We need suppliers who are looking toward the future with us, applying what we learn together as we continue to invest in technologies that will help us deliver the critical products and services that our customers will demand. We are looking for long-term partnerships.
- What would you recommend to WOSBs looking for subcontracting opportunities?
Champagne Bell: To summarize it:
- Become familiar with your local SBA office, PTACs, and all available resources.
- Keep Current on Business Trends.
- Know Boeing’s business and how you fit in, what is your value proposition.
- Become connected – Stay informed
- For Getting Started visit:
- How do you think can ChallengeHER and WOSB program help women-business owners to get into the federal procurement?
Champagne Bell: As mentioned above, we have a strategic initiative which focuses on WOSB suppliers and we believe that the programs like ChallengeHER are helping a lot to encourage women to enter the federal procurement business. It also helps us, the Boeing Company, to find diversified suppliers that we are looking for.
Other general advice is:
- Understand the procurement practices and requirements.
- Understand quality requirements.
- Small business owners are admired for their ingenuity and aggressiveness so embrace that mindset to find your customers and know their business.
- Leverage engagement with large primes to understand business needs.
We wouldn’t be where we are without you, your participation is important to us! Whether you are a WIPP member or not there is a way for you to participate. Here are 5 ways you can get started:
- Follow WIPP online. Stay up to date by following one of our social media channels.
- Participate in WE Decide 2016 polls. Who knows better than you how policy affects your businesses and your families? As an important voting bloc, women need to be the voice of reason. Now you can make a difference. You can have your voice heard through We Decide 2016. Learn more about WE Decide 2016 and take the latest quick poll: http://wedecide2016.org/get-involved/todays-quick-poll/
- Go to a ChallengeHER event. These events are designed to assist you in competing for government contracts by reducing the competition utilizing the WOSB Set Aside Program. The ChallengeHER events have sessions for those who are just beginning the process of becoming a federal contractor, and for those who have federal experience but looking for higher level content. Read more about the program and register for an event near you: http://www.wipp.org/?ChallengeHER
- Become a WIPP Member. WIPP has a wide range of membership levels and benefits. Check them out here and join today: http://bit.ly/1EpjHDm
- Join a WIPP Issue Committee. Already a WIPP member but want to do more? Join one of our Issue Committees and be the first to hear about policy issues affecting your business: http://bit.ly/1L8YNxm
By: Ann Sullivan, WIPP Government Relations
In its first major action of 2016, the House Small Business Committee approved changes to federal contracting which affect small companies who do business with the federal government. Acting in a bipartisan manner is relatively rare in Congress these days, but the Committee unanimously adopted the legislation, The Defending America’s Small Contractors Act of 2016, with over two-thirds of the Committee contributing content to the bill.
For the last three years, the House Small Business Committee has pushed for changes to the government’s buying rules and this week’s legislation was no exception. In our view, the following changes in the bill will prove to be significant to small contractors. One attacks an age-old problem – showing past performance without a government contract. The bill establishes a pilot program that enables contractors to receive a past performance rating by submitting a request to the contracting officer and/or prime contractor. Second, the bill strengthens agency small business offices to recommend which small business set-aside programs should be used for each contract at their agency.
Third, WIPP’s recommendations were incorporated in the legislation, including one made by Anne Crossman, a member of WIPP’s Leadership Advisory Council, in her testimony before the Committee. Anne took the opportunity to highlight WIPP’s “if you list us, use us” policy for prime contractors’ subcontracting plans. This bill incorporates WIPP’s recommendations to clarify the role of commercial market representatives (CMRs) in encouraging prime contractors to work with small businesses. Lastly, the bill takes the first step toward getting a better handle on the actual amount set aside for small businesses by requiring agencies to divulge awards counted toward multiple small business goals.
An amendment offered by Rep. Takai scored a victory for women entrepreneurs by allowing Women’s Business Centers (WBCs) to provide procurement assistance to women participating in the DOD mentor-protégé program. Rep. Takai’s statement on the amendment is available here and includes WIPP’s statement of support.
These improvements set the stage for a productive year of improvements for small contractors. The bill, which passed unanimously, will now be considered by the full House of Representatives. The House Small Business Committee is off to a great start. We can’t wait to see what they do next.
The contracting rulebook used by most federal agencies embraced the new sole source authority for women entrepreneurs. In the final step of a multi-year effort – with WIPP at the helm – the government gave the final green light for contracting officers to award sole source contracts to women business owners.
Deciding that finalizing the sole source authority of the WOSB program was an urgent and compelling need, the FAR Council issued an interim rule on December 31, 2015, to immediately allow contracting officers to award sole source contracts in the WOSB program. While the Small Business Administration (SBA) already finalized their rules for WOSB sole source on September 14, 2015, the FAR Council needed to issue guidance to contracting officers on how to use the program. This rule provides that guidance and is effective immediately. Notably, the FAR Council determined that sole source applies to acquisitions at or below the acquisition threshold.
As a reminder, sole source contracts are allowed in the WOSB program when four conditions are met:
- Contract falls in a NAICS code approved for the WOSB program.
- The value of the contract, including options, is under $4 million ($6.5 million for manufacturing contracts).
- The contract can be awarded at a fair or reasonable price.
- The contracting officer does not have a reasonable expectation that two or more WOSBs/EDWOSBs will submit offers at a fair and reasonable price.
The interim rule is available here, with comment due February 29, 2016. While a final rule will ultimately be issued, this rule makes sole source effective in the FAR as of December 31, 2015.
A substantial part of Women Impacting Public Policy’s (WIPP) Federal Procurement Programming lies undoubtedly with ChallengeHER. ChallengeHER is an educational program, which provides women business owners with the guidance to better compete for federal contracts under the Women-Owned Small Business (WOSB) Federal Contract Program.
In order to provide as much impact as possible and to get women business owners together with federal buyers, ChallengeHER events are being held in several cities and states throughout 2015. As the year is progressing toward the fall season, several events have already been held (e.g. Washington D.C., New York, Dallas, Atlanta, New Hampshire), but many more are still scheduled until the end of the year. And what can participants expect?
ChallengeHER provides women around the United States with the most important, standardized knowledge and guidance in the federal marketplace and an opportunity to:
- Learn about the WOSB set aside program and how to market their business using this set aside.
- Learn from experiences and best practices of successful WOSBs working as federal contractors.
- Find out from federal buyers how to do business with their agency in Federal Buyer’s Panel.
- Participate in one-on-one matchmaking sessions with federal buyers at most events.
- Learn about the new Sole Source Authority rule! More information on SBA’s announcement integrating a sole source component into the WOSB procurement program starting October 14, 2015, can be found here.
- Network with peer mentors and other WOSB and Economically Disadvantaged Women-Owned Small Business (EDWOSB) firms.
Some of the participants’ feedback:
“ChallengeHER provided me with pathway to applying for federal contracts and becoming a successful women business owner.” – Attendee from Atlanta event
“As well as strong individual speakers, it was particularly helpful to have “panels” that provided different perspectives at once.” – Attendee from NYC event
Registration for upcoming events is available for:
- Santa Ana, October 8
- Cincinnati, October 16
- Denver, October 21
- Washington D.C., November 6 (Department of Energy)
More events to come will be held in Central New Jersey, Baltimore, Kansas City, and Orlando in Florida throughout November and early December 2015.
ChallengeHER aims not only to provide one time learning experience but also to build a standing long-term knowledge and support base for its participants. Therefore additional resources are available for attendees both before and after the event:
- To prepare and get ready for discussions and topics covered during the event by listening the following courses:
- To follow up on gained knowledge and sort out where to go from there, by following 10 Quick Steps for guidance to successful federal contracting.
For those of you, who are not familiar with the program, here is some basic information:
ChallengeHER, an initiative from the U. S. Small Business Administration (SBA), WIPP, and American Express OPEN (OPEN), is designed to strengthen and promote the Women-Owned Small Business (WOSB) Federal Contract Program. ChallengeHER offers women business owners important information to established and new businesses on working with the federal government. Further, these events enable more women business owners to take advantage of contracting opportunities so they can boost their businesses and help propel the success of the WOSB Procurement Program.
Each year on August 26th we celebrate Women’s Equality Day, the day women were granted the right to vote when the 19th Amendment to the Constitution was passed in 1920. This day not only commemorates the passage of the 19th Amendment, but it also recognizes the ongoing fight toward full economic equality. While we have made gained some ground with WIPP’s efforts to increase federal contracting opportunities for women, we still have a long way to go with issues such as access to capital, equal pay, and ensuring more women are in leadership roles in the corporate and political spheres.
See below for more resources on Women’s Equality Day:
- White House – Presidential Proclamation: Women’s Equality Day, 2015
- National Women’s History Project
- National Women’s History Museum
- Huffington Post
Please don’t forget to recognize this important day by highlighting it via your social media channels. Use the hashtag – #WomensEqualityDay to add your voice to the chorus in recognizing the important role women play in our nation.
In 2000, the federal government set a goal to award 5% of all contracts to women-owned businesses. In February 2011, after 11 long years of work, the Women-Owned Small Business Federal Contract Program was finally enacted to help make that goal a reality. This program allows federal contracting officers to restrict competition for certain federal contracts to women-owned businesses.
Give Me 5, named for the 5% federal contracting goal for women-owned businesses and created by WIPP and American Express OPEN®, is designed to educate women entrepreneurs on how to successfully navigate the federal contract marketplace through a full range of freely accessible and on-demand online educational courses ranging from contracting basics to more advanced courses.
Give Me 5 has over 90 educational courses, with 20 highly specialized contracting instructors .
We encourage you to join successful women-owned companies and start doing business with federal government. Our next webinars are focused on Understanding Project Accounting and its Impact on Government Contracting and on The Essential Ingredient of All … Relationships!
Also don’t forget to check out WIPP’s other federal contracting education resources:
- ChallengeHER – a live event series, cosponsored with the SBA and American Express OPEN.
- WIPP Federal Contracting Certificate Program
- WIPP National Directory of Women-Owned Small Businesses
- WIPP’s Procurement Policy Page – Procurement news, policy updates, legislation and regulatory actions