Tag Archives: SBA

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.

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.

 

WIPP Works in Washington – May 2018

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“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.

But Wait – There’s More

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By Ann Sullivan, WIPP’s Chief Advocate

The first quarter of 2016 was big for us. The Federal Government met its goal of awarding 5% of all contracts – $17.8 billion – to women-owned firms. This was only possible because of the Women-Owned Small Business (WOSB) procurement program which allows contracting officers to set aside contracts for women only to bid on.

In February, the FAR Council added sole source authority to the program. Now, contracting officers can use the program to award sole source contracts to women-owned businesses that are uniquely qualified to perform the work the government needs. All of the other small business procurement programs have sole source authority, so it was important to bring parity to the WOSB program.

In March, the WOSB program was expanded to include 113 industry codes. The same law that added sole source authority also called for SBA to update a study on participation in federal contracting by women-owned businesses. The last study was done in 2007. The new study found more industries where women are underrepresented and now those industries are part of the WOSB program – an expansion that will provide additional procurement opportunities.

While we have been making gains on that front, there is much more to do to open doors to federal agency contracts for women-owned companies. Never content to rest on our laurels, the WIPP policy team in Washington, DC is ready to tackle two new procurement issues.

First, we must increase access for women-owned firms to multiple-award contracts. The government increasingly buys its products/services through these ongoing contracts, like Indefinite Delivery, Indefinite Quantity (IDIQ) contracts, and other large contracts. Often, these contracts select vendors through an initial competitive process and then issue task orders to that group of vendors only. Some multiple-award contracts have a “track” for large businesses and a “track” for small businesses. Others, though, have different tracks within the small business track. For example, they may have a HUBZone track, an 8(a) track and a veteran’s track. In those instances, WOSBs should also have their own track. We will be asking for parity in these cases.

Second, there should be parity in sole source contract ceilings. Sole source contracts are capped – they are not unlimited. Every five years, the FAR Council adjusts the cap for inflation. In October, all the other small business programs’ caps were increased. The HUBZone program, for example, now has sole source awards capped at $4 million for most products/services and $7 million for manufacturing. Women did not get an increase — our manufacturing cap is a half a million less at $6.5 million. Again, the theme is parity. We will be pressing the FAR Council to adjust the WOSB sole source to match the increases of other programs.

WIPP’s advocacy is always in motion and in the federal contracting space, there is always much more to be done. So, join us in the effort. When talking to federal agencies or elected officials, echo our two asks. Everyone’s voice is important.

Growth Accelerator Fund Competition

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The SBA’s Growth Accelerator Fund Competition is open for applications and ready to award successful incubators and growth accelerators with cash prizes. This competition, which awards the most innovative and promising small business accelerators and incubators, was announced by the Small Business Administration this morning. These prizes will give the winning organizations additional capital and ultimately assist promising start-ups and entrepreneurs.

For more details on the competition, including competition rules and eligibility, please see the SBA’s announcement. Applications are due by June 3, 2016 and can be submitted through Challenge.gov.

Small Things Come In Big Packages

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May 2016 WIPP Works In Washington

Small Things Come In Big Packages

By Ann Sullivan, WIPP Government Relations Team

 

In an epic week fueled by bipartisanship, the Senate Small Business Committee and the House Armed Services Committee put small business issues front and center in a way that was nothing short of amazing. This just goes to show that the “do-nothing Congress” does in fact do plenty when it comes to small business.

Let’s first talk about the Senate Small Business Committee. Members of the Committee introduced and are expected to pass three bills important to WIPP. One bill would extend the Small Business and Innovative Research program (SBIR) and a related program the Small Business Technology Transfer program (STTR) and included a mandate to do better outreach to women and minorities (thanks to Michigan’s Senator Gary Peters). The government funds innovative products and services through federal grants to bring the products to commercialization. Don’t know about it—look into it at: SBIR.gov. By the way, this is part of WIPP’s access to capital platform – so another accomplishment for our advocacy.

Are you a contractor? Then you might be interested in the introduction of The Small Business Transforming America’s Regions Act of 2016. If you aren’t aware of the HUBZone program, you should look into it. The government gives a bid preference to companies who invest in low-income areas. It could supplement the WOSB program you already belong to. At least check it out at SBA’s HUBZone Page.

Need capital? The Committee is expected to modernize the Microloan Program administered by the SBA. The program lends $50,000 and below to companies who need capital. In case you didn’t know it, there is a whole nationwide network of lenders who stand ready to lend, backed by the government’s guarantee against failure.

Now onto the House Armed Services Committee. This Committee and its counterpart, the Senate Armed Services Committee, prepare a bill each year, the National Defense Authorization Act (NDAA) that funds all military operations. It is a must-pass bill because the military requires certainty in funding. In order for the US to keep its competitiveness, it must have a strong and diverse industrial base. That’s where small businesses come in.

To that end, a whole section of the bill is devoted to small business contracting changes and strengthening resources for women entrepreneurs including women’s business centers. The bill:

 

  • Requires an annual report on the share of contract dollars awarded to small businesses without any exclusions
  • 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
  • Requires the SBA to develop a list of no-cost programs that assist small businesses in compliance with Federal regulations.
  • Strengthens agency small business offices to recommend which small business set-aside programs should be used for each contract at their agency.
  • Requires commercial market representatives (CMRs) to assist prime contractors in identifying small business subcontractors and assess the prime’s compliance with their subcontracting plans
  • Adds HUBZone and SDVOSB to small business office oversight (previously not listed in statute but already happening in practice)

 

In case you do not remember, the Women’s Business Center reforms would raise the funding authorization level by 50% from $14.5M to $21.75M and increase grants to individual centers as well as streamline the program. Better program, better training for women.

How did all of this happen? Champions. The leadership of the House Small Business Committee, which passed the provisions now part of the NDAA, worked together hand-in-glove to assist our businesses. Chair Steve Chabot (R-OH) and Ranking Member Nydia Velazquez (D-NY) set the gold standard of getting things done without a partisan fuss. Similarly, the Senate Small Business Committee, under the guidance of Chair David Vitter (R-LA) and Ranking Member Jeanne Shaheen (D-NH) worked together to introduce reforms good for small businesses.

The real story behind all of this activity is the power of small businesses uniting to ask for changes in contracting and better resources to succeed. Organizations, such as WIPP are the champions, walking the halls of Congress to press for better programs and fairness in contracting.

While I would agree that Congress is more partisan than ever before, there are bright spots. This past week was certainly one—all made possible by elected officials crossing party lines for the good of women-owned companies. If you ever wondered what your WIPP membership is paying for or if you need a reason to join WIPP, look no further. The advocacy WIPP provides on your behalf is the best return on investment you may ever find. It requires almost none of your time, requires a minimal monetary investment (dues) and you get a whole team dedicated to advancing your agenda to the Congress on a daily basis.

I call that value.

 

Filing Frenzy: Tax Deadline Strikes Today

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By: Jake Clabaugh, WIPP Government Relations

Tax Day is upon us and woman business owners have been working overtime. Not on growing their firms, planning investments or making important hiring decisions, but on tax compliance. At least, that’s according the House Small Business Committee, which took a look at the burdensome tax.

Forgetting tax liability – the amount a business owes – the Committee focused on how difficult it is for small businesses to satisfactorily comply with dense tax rules. According to the Small Business Administration (SBA), small businesses spend 5.5 billion hours preparing and filing taxes – time that should be spent growing the business. The costs and complexity of calculating tax provisions makes it difficult for smaller businesses to take advantage of incentives designed to reward investment. As a result, larger businesses that can incur the costs of calculation reap the rewards.

As we’ve heard from WIPP members across the country, tax certainty is a top priority. Clarity on what provisions and incentives will be enacted would provide businesses with the ability to plan ahead, rather than adjust to a changing environment. For the last few years, Congress has passed legislation solely for “tax extenders” – deductions and credits that were set to expire at the end of the previous year, but were extended to cover the current tax year. While many of these credits could provide some relief for small businesses, firms spent the entire year without knowing if these provisions would be available. Hardly an efficient way to have to run your business.

A simpler tax code would reduce compliance time and allow owners to focus on their business – not the latest tax rules. Also, small businesses should be able to take advantage of the same incentives that larger businesses can. WIPP will continue to focus our advocacy on the two guiding principles of simplicity and fairness for women-owned businesses.

Could comprehensive reform – not seen since the 1980’s – be on the horizon? House Ways and Means Committee Chair Kevin Brady (R-TX) announced last week that his Committee is planning to release a tax-reform “blueprint” this summer. Additionally, Members of the House and Senate have stirred over international tax reform in the wake of recent corporate mergers. While the conversations are ongoing, comprehensive tax reform in an election year, with an ardently divided Congress seems, at least in our view, unlikely.

For updates on tax policy and other finance issues, please visit WIPP’s Economy and Tax section and WIPP’s Economic Blueprint.

 

 

Critical Updates to WOSB Procurement Program

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If you are women-owned small business in the federal contracting arena, please take a look at the following critical updates to the WOSB Procurement Program.

You Need to Know: WOSB Program Update
SBA Certify.gov siteThe WOSB procurement program website is undergoing a facelift. A new website, called SBA ONE, will allow for the electronic submission of SBA forms, as well as a streamlined location to monitor all certifications for your company including the repository. With the change, there are three things you need to know:
  1. All WOSBs will need to create a new login for the new system. The new website is actually an entirely new system and as such all WOSBs will need to create a new account and login (but not reload all documents – see next). The SBA is also asking that after creating a new account, all WOSB/EDWOSB companies submit new Form 2413 (WOSB certification) and/or Form 2414 (EDWOSB certification) electronically. Businesses should do this as soon as possible.
  1. The repository is being migrated, but is currently closed. This is important for two reasons: 1) your documents previously submitted should move to your new account and not require resubmission (except as mentioned above a new electronic Form 2413/2414); and 2) Contracting officers will not be able to view your repository documents for WOSB awards. Instructions for you to provide to a CO about how they can confirm your eligibility is available at the end of this document. This only impacts WOSB/EDWOSBs about to win EDWOSB or WOSB set-aside or sole source awards.
  1. The new site supports self-certification. Self-certification for WOSB/EDWOSBs remains an option until SBA finalizes new certification requirements. The website supports companies electing this option by allowing for the electronic submission of required documents. Third-party certifications can be uploaded as well.

SBA ONE, located at certify.sba.gov, will eventually house all program certifications, but is beginning with the WOSB program. Additional programs will be incorporated onto the site on the following projected timeline: 8(a) Business Development Program (Fall 2016), HUBZone Program (Spring 2017) and Dynamic Small Business Search (DSBS) (Spring 2017).

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 Information to Share with Contracting Officers
(Direct from SBA)

If you are working with a contract officer on a pending award requiring them to review your status, the following is information provided directly from SBA which you may share with contract officers.

Due to the system upgrade, access to the WOSB Federal Contract Program Repository will be temporarily unavailable for contracting officers (CO), starting on Wednesday, March 23 at 1:00 EDT.  This may be down for several weeks.   During this time, in order to comply with the WOSB Program requirements at 13 CFR 127.301 and FAR 19.1505(e) (specifying that a CO shall verify that an apparent successful offeror has provided all the required documents set forth in 127.300(e) to the WOSB Repository), SBA will review the Repository on behalf of a CO.

A CO may request that SBA review the Repository on their behalf by sending an email to wosb@sba.gov (link sends e-mail) with the following in the subject line:

“PENDING AWARD UNDER FAR 19.505(e) VERIFICATION REQUEST- SOLICITATION NUMBER [insert solicitation number].”

In the body of the email, the CO should provide the following: provide the apparent successful offeror’s DUNS, EIN, FIRM NAME, OWNER NAME; indicate whether the pending award is a WOSB or EDWOSB set-aside or sole source award; specify the NAICS code assigned to the procurement; and identify the State where the CO is located. Within 2 business days, SBA will perform the necessary check to determine whether the apparently successful offeror has filed all the required eligibility documents and provide the CO with an email response which either: (a) notifies the CO that all required documents have been provided or (b) identifies which documents are missing in order to allow the CO to file a status protest in accordance with SBA regulations and the FAR.

Emails for this information will be processed only for Contracting Officers.

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LEARN MORE
  • Upcoming Webinar:  WIPP is working to arrange for a special webinar with experts from the SBA’s Office of Government Contracting to further review the new site and re-registration process.  More details will follow.
  • If you have any questions about the certification program, or comments on improving the site, please email certify@sba.gov. More details on the transition of repository documents are available atwww.sba.gov/wosb.