Tag Archives: Small Business

From the Hill: Contractors Face Additional Reporting Burdens

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By: Jake Clabaugh, WIPP Government Relations

hillFederal contractors will now face a bevy of additional reporting requirements when seeking procurement opportunities. The House Small Business Committee held a hearing Tuesday to exam the Fair Pay and Safe Workplaces regulations. These new rules are expected to be finalized late this year or early next year and require federal contractors to document and report labor law and safety violations for their firm and all subcontractors when bidding for contracts above $500,000.

WIPP supports efforts to rid the contracting environment of businesses with a history of abusive and neglectful violations, but these new rules will be particularly burdensome for small contractors. The House Committee hearing focused on the increased administrative burden that small contractors will face and how opportunities for small and women-owned businesses to enter the federal contracting arena will be affected.

WIPP addressed many of these issues in its official comment, submitted earlier this summer. The hearing highlighted the likelihood that contractors may be “blacklisted” from contracting opportunities, a concern that WIPP expressed. The regulations require all violations to be reported, even infractions that have yet to be adjudicated. The contractor is not afforded the opportunity for explanation until the contract is likely to be awarded. The danger is that a contracting officer will simply pass over or “blacklist” a potential contractor rather than dig deeper into nature and validity of the reported infraction. This could leave many upstanding small and women-owned firms with unproven or minor violations unable to secure contracting opportunities.

The hearing also stressed the duplicative nature of these regulations. Several witnesses noted how suspension and debarment procedures already exist. In its comments, WIPP recommended incorporating safe workplaces into the well-established system of suspension and debarment as an alternative to creating this enormous reporting burden.

These reporting requirements will impose significant costs for small and women-owned firms. Not only will it require the business to submit excessive documentation, it will also require significant resources to research, gather, and report the necessary information for the small business and all of its potential subcontractors.

Far from leveling the playing field for the millions of businesses playing already by the rules, these regulations will add to the tremendous burden facing small and women-owned businesses.

How PPACA Will Affect Your Business The Next 5 Years?

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Tod Covert  By Todd Covert, Executive Vice President of ACA Track

The Patient Protection and Affordable Care Act (PPACA) – also known as the Affordable Care Act or ACA – is the landmark health reform legislation passed by the 111th Congress and signed into law by President Barack Obama in March 2010. The legislation includes a long list of health-related provisions that began taking effect in 2010 and will “continue to be rolled out over the next four years.” Key provisions are intended to extend coverage to millions of uninsured Americans, to implement measures that will lower health care costs and improve system efficiency, and to eliminate industry practices that include rescission and denial of coverage due to pre-existing.

What does it mean for business today?

Business With 50-99 Employees 2015

Key Point #1

Navigating through transition relief to determine the date you need to make sure you are in compliance.

Applicable large employers (ALEs) with fewer than 100 full-time employees, including full-time equivalent employees, may have until 2016 to offer health insurance to eligible employees and their dependents without facing penalties.

This transition relief is available to employers who can certify that they have not reduced their workforce to remain under the threshold and have not materially reduced or eliminated health coverage previously offered. This certification needs to be included with your filing under Section 6056 for 2015.

The IRS will still grant transition relief to employers who reduced their workforce for “bona fide” business reasons.

Key Point #2

If you are over 50 FTE (Full-Time Equivalents) or part of a control group (Parent Company) with more than 50 FTE than you MUST file the 1095-C and 1094-C even if you do not offer coverage.

Key Point #3

Don’t “expect” your payroll company to complete these 1094-C and 1095-C forms.

Why?  Most payroll companies don’t even track the information required to complete these new IRS forms—It is more a benefit enrollment and plan design function than payroll.

  1. Dates of hire and waiting periods determine when employees are in the limited assessment period. Partial months are treated uniquely differently than full months and the series coded will change. Most payroll vendors only track deductions.
  1. Termination, rehire dates and class changes impact offer of coverage and safe harbor designations. Employees with a number of changes during the year can see a variety of different codes appearing on form 1095. Not a payroll function
  1. Offer of coverage determines whether 70% (2015) and 95% (2016) levels are reached or significant penalties are to be paid. Not a payroll function
  1. Safe harbor designations and income drive affordability calculations. Not a payroll function
  1. Transition relief provides the ability to mitigate risk and avoid penalties altogether.  Not a payroll function

Key Point #4

Start balancing culture and cost now because the “Cadillac Tax” is on the horizon in 2018—It’s not a matter of “IF” we hit the Cadillac Tax it’s a matter of “When” we hit the Cadillac Tax.

If health insurance exceeds $10,200 in premiums for an individual or $27,500 for a family. The tax amounts to 40 percent of the cost above that threshold AND its Non-Tax Deductible.

Why do we say “When” we hit the Cadillac Tax?  The insurance cost threshold ($10,200 in premiums for an individual or $27,500 for a family) only increases at CPI each year which is about 3.1% and Healthcare inflation increases close to 8.0% thus the X & Y axis lines are eventually going to cross.

Please join us September 29th for Women Accessing Capital: 5 Things You Need to Know About the New 1094-C and 1095-C IRS Reporting. Register now! 

From The Hill: Dodd-Frank’s Impact on Small Business Lending

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By Jake Clabaugh, WIPP Government Relations

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Women entrepreneurs face unintended consequences of wall-street reform. According to a House Committee hearing yesterday, the Dodd-Frank Wall Street Reform and Consumer Protection Act, introduced in an effort to prevent another financial crisis, is contributing to small businesses’ inability to access capital from banks.

WIPP’s Access to Capital Platform has cited some of Dodd-Frank’s regulations as a contributing factor to the decrease in small businesses lending. Capital access is a lifeline for small businesses. It is essential for entrepreneurs to have access to sufficient capital to found and grow businesses.

DF picThe House Committee on Small Business convened lenders and experts to discuss how Dodd-Frank has affected the ability to provide entrepreneurs with critical capital. Access to private capital, including bank loans is a primary concern to women entrepreneurs as women-owned small businesses receive only 4% of private sector lending dollars. Additional regulatory burdens could be exacerbating this problem.

The hearing touched on many of the difficulties WIPP members have experienced when trying to access to capital. The Committee cited increased administrative burdens as a significant cost for small and community banks, a primary lender to small businesses. These regulations have increased the cost of making loans and therefore made it more difficult for banks and borrowers. The result is less capital for entrepreneurs.

The hearing also cited the direct impacts on borrowers. Many that would have qualified pre-recession are no longer able to obtain loans from banks due to tighter lending standards. WIPP’s platform advocates for modernized credit scoring that would level the playing field for women business owners.

Until Dodd-Frank is fully implemented, its complete impact will remain unclear. WIPP continues to review ongoing regulations as well as work with Congress to scale back unnecessary barriers to capital access for women entrepreneurs.

Success: Sole Source Finalized

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by Ann Sullivan, WIPP Government Relations 

When you’ve been working on a program for 15 years, it’s almost anti-climatic when you realize you won and it’s over. I suppose lawyers feel this way when they win a big case, or business owners when they close a major contract.

For me, the SBA announcement integrating a sole source component into the WOSB procurement program on October 14, 2015 marks the end of a long campaign by Women Impacting Public Policy (WIPP). First, we fought for eleven years to establish a program that gives a government buying preference to women-owned companies whose industries have been underrepresented. Not an easy fight – we had plenty of Congressional and White House opponents—it wasn’t until the Obama Administration came into power that the program was established. At the time, SBA Administrator Karen Mills made it her number one priority, which we will always be thankful for. We had strong Congressional proponents – Senators Cantwell and Shaheen and Representatives Speier and Graves.

Then, we had to make the program work. That required two major changes to the program in 2013 and 2014. The first change required lifting the award caps the law imposed on the program. The WOSB procurement program limited contract awards through the program to $4 million ($6.5 million for manufacturing). In 2013, Congress helped us get rid of those caps. The last big piece was the sole source piece—allowing contracting officers to award sole source contracts to women-owned companies through the program. This major change gives the program parity with other small business programs and again, required Congressional action. Effective October 14, agencies will be able to use this mechanism to award contracts to women whose companies offer innovative products and services.

As with all government programs, the rules are a little complicated and the ability to self-certify as a woman owned business will eventually have to change, due to Congressional direction in 2014. But for now, self-certification remains the law and women should be actively pursuing contracts through the WOSB procurement program whether or not they are self-certified or certified by a third party.

It is important to note that not all industries (NAICS codes) qualify for the program. You can find a list at http://www.SBA.gov/WOSB. We have developed a one pager that go through the rules of the sole source portion of the program and our GiveMe5 program has comprehensive information on the WOSB program. In addition, our ChallengeHER events are all over the country so that women can find out more about the program. The information can all be found at www.wipp.org.

The WOSB procurement program is in good hands. All the major pieces to make it successful are in place. When we started this effort in 2002, women received 2.7% of government contracts. Since the program has been in place, more than $500 million has been set-aside for women- owned companies. In fact, in 2014 the government awarded 4.7% of its contracts to WOSBs –a 75% increase since 2002. Now women business owners need to know how to use it with the help of SBA, the federal contracting community and organizations, such as WIPP.

Fifteen years seems like a long time, but when you are fighting for something—somehow it doesn’t seem that long. WIPP members and coalition partners were with us every step of the way. For this, I am exceedingly grateful.

Introducing Peer-To-Peer Lending: Alternative Funding for Your Small Business

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SBA Advocacy- P2P issue brief

The Office of Advocacy is an independent office within the Small Business Administration that is a great source for small business statistics, as well as a voice for small business owners that can express their views and issues to policy makers in DC. Today, the Office of Advocacy released an issue brief on “Peer-To-Peer Lending: A Financing Alternative for Small Businesses”.

To explain a little more, Peer-To-Peer Lending or P2P is a funding model where individual investors give small personal loans online to individuals. The Office of Advocacy describes P2P as a hybrid of crowdfunding and marketplace lending.

The issue brief released today details the funding model and gives a side-by-side view of P2P and traditional small business financing options. It also shows how it could affect small businesses in the future, giving them more opportunity for financial growth.

Read the brief to learn more.

“Fair Pay” Rules Just Aren’t Fair

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women comp

By John Stanford, WIPP Government Relations

Women Impacting Public Policy (WIPP) recently submitted comments on proposed regulations that would require federal contractors to disclose labor violations from the past three years. This blog accompanies those comments as a summary of WIPP’s position. For more details or if this impacts your business, I encourage you to read the full comment here.

Last summer, President Obama issued an Executive Order with the goal of barring bad companies from winning federal contracts. WIPP, along with most in the contracting community, agrees that companies that follow the rules should not have to compete against companies that break them for federal contracts.

In May, the Labor Department and the FAR Council (overseers of contracting rulebook, “the FAR”) proposed how the President’s order would be implemented. It turns out, as with most things, the devil is in the details.

The proposed regulations require federal contractors and subcontractors to disclose violations of 14 federal labor laws and equivalent state laws from the previous three years. Exemptions were provided for companies with contracts valued less than $500,000. As proposed, prospective federal contractors would need to declare if they had labor violations in the previous three years when submitting an offer. During an initial evaluation, contracting officers would 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.

WIPP responded to the regulation during the public comment period expressing concerns with the new system and how it could negatively impact women-owned businesses, including those who had no history of unsafe or unfair work practices.

Notably, the proposals were incomplete as 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 – the reason for comments– when missing significant portions.

What was in the proposals, however, was equally concerning. WIPP’s comment discusses how, 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.

The comment also considers burdens on subcontractors who similarly must report violation history, and the lack of resources the government may face to answer questions about weighing different labor violations. Moreover, the onus to collect and judge subcontractor violations falls to primes, a strategy the Labor Department itself questions.

WIPP’s final concern is that this rule 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 are expected to come later this year. These make contracting with the federal government more onerous, particularly for women entrepreneurs seeking to enter the market.

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 proposals commented on will not achieve this goal. Instead, they will make it harder to be a contractor – pushing the innovative products and services of women-owned businesses out of the federal market.

NWBC Survey Analysis Shows Women-Owned Business Growth Soars

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women biz

The National Women’s Business Council has released its analysis of the 2012 Survey of Business Owners and while the growth rate for new businesses has slowed down, that is not the case for women-owned firms. The rate of growth of women-owned businesses is almost FOUR TIMES the rate of businesses owned by men. The results show that there were nearly 10 million women-owned small businesses in the US in 2012, a 27.5% increase since 2007. There is also a huge spike in minority women business ownership. The analysis also shows that In 2012, women-owned firms with employees paid their employees $290.5 billion- a $75.8 billion or 35.3% increase since 2007.

For more information, check out several articles written on the analysis:

Click here to view the National Women’s Business Council Fact Sheet.

Babson and Other Business Schools Commit to White House to Create ‘Best Practices’ to Give New Opportunities for Women in Business

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Graduation cap with coins.

Babson, along with 45 other business schools have committed to a set of best practices, shared with the White House, offering strategies for business schools to help women succeed during and after school. These business practices are designed to prepare female students for the challenges of the changing American workforce.

These best practices have four major area’s of focus:

  • Ensuring access to business schools and business careers;
  • Building a business school experience that prepares students for the workforce of tomorrow;
  • Ensuring career services that go beyond the needs of traditional students;
  • Exemplifying how organizations should be run.

To read more about the set of best practices, click here.

SBA’s Announcement of the 2016 InnovateHER Challenge and Summit

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FeatureInnovateHER

By Annie Wilson, Intern

On Tuesday, August 4th the Small Business Administration (SBA) announced the launch of the 2016 InnovateHER: Innovating for Women Business Challenge and Summit. In partnership with Microsoft, the 2016 InnovateHER includes the second round of the women’s business competition to feature new, innovative products and services that help to change and empower the lives of women and families. Last year, the SBA engaged over 100 organizations and reached 1000+ entrepreneurs around the country and this year they have expanded their challenge to include a women’s summit.

It is the SBA’s hope that through this summit they can unveil products or services that have a measurable impact on women and their families, fulfill a marketplace need and have potential for commercialization. The SBA recognizes that while women control 80% of the purchasing power in this country they only make up less than 5% of venture capitalists. The InnovateHER Challenge is an effort to bridge that economic standard for women and elevate commercial success for women entrepreneurs and products for women.

The InnovateHER event will kick off in the fall of 2015 in its initial round starting with competitions hosted by universities, accelerators, clusters, scale-up communities, resource partners and other organizations. The SBA is encouraging organizations all across the country to participate in this challenge to provide accessibility to an innovative space for women. A way in which organizations can help the InnovateHER challenge and women entrepreneurs within their community is to host a local business competition and submit the winner to the SBA no later than December 3rd, 2015 for the semi final rounds. The SBA will then select up to 10 semifinalists from their community nominations that will be sent to the final pitch competition. The 2016 InnovateHER and final pitch competition will be held March 16-17th, 2016 in Washington D.C. At the final competition, the remaining contestants will do one final marketing pitch and compete to be one of the top three winners to receive up to $70,000 in prize money.

Make sure to check out last year’s winners: LIA Diagnostics, the Shower Shirt, and Trusst.

If you’d like to learn more about the challenge rules or how to become a host organization, please click here.

If you’d like to learn more about the challenge itself, please click here.

August 2015 WIPP National Partner of the Month

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Lynn Sutton

August WIPP National Partner of the Month: Lynn Sutton 

WIPP sat down with Lynn to hear a little bit more about her business and relationship with WIPP…

 

Tell us a little about your company and its mission.

Advantage Building Contractors, Inc. is a federal government contractor specializing in design build, general construction, and facilities support.  The company was founded by Patricia Summers and I in 2002 as a residential roofing specialty trades contractor. In 2010 Advantage made its way into the federal arena and within a year, Advantage was awarded the first WOSB set aside contract in construction. Like most other small businesses getting started with the federal government, Advantage faced the brutal challenges of developing business in the absence of no relevant past performance and, specific to construction, little bonding capacity. We were able to build our capabilities through sole source opportunities, teaming partners and relentless follow-up with agencies. Our Mission Statement is “We’re on a mission to make our customer’s job easier.”

Have you always been an entrepreneur?  If not, what, or who, inspired you to take this leap? 

I grew up in Philadelphia and was raised within a family who valued an intense work ethic and entrepreneurship. My grandfather was a shoemaker in the early 1900’s and my grandmother worked tirelessly at home raising seven children while instilling in them to pursue and achieve all of their dreams. My father played the single most influential role in inspiring me to be an entrepreneur. He had several businesses and influenced me to create my own opportunities. I began by selling greeting cards before the age of nine and shortly thereafter I worked for my Father who was an Amway Distributor until I was able to start my own Distributorship.

 

How are you engaged in your community (or state or national scene) in philanthropic or political causes?

Since I have experienced success in federal contracting, many other small business owners, especially women, have come to me looking for guidance. I am Editor of Hattie’s Hammer, a blog that serves as a resource to help women and disadvantaged groups navigate the federal market by providing information regarding current events, programs, opportunities, and legislation. Hattie’s Hammer is a local and national platform in which I contribute to the collective social conscience by promoting awareness of the need for small businesses to participate in federal contracting as a means to overcome many of the socioeconomic challenges women and disadvantaged businesses face on a daily basis. I must add all of us have the ability to engage by supporting organizations that are advocating on their behalf and respond to sources sought when possible.

 

Have you advocated for an issue or a cause important to you (for example:  called or written to your elected official, spoken publicly, or written an op-ed).

One of the most impactful highlights of my life was having the opportunity to represent WIPP by providing testimony to the US Senate in support of the Women’s Small Business Parity Act and Sole Source Authority in July 2014.

My first major cause was participating in a campaign to stop a Mayor from being elected in Philadelphia. Decades later, I was a community organizer for the National Organization for Women for the rally to support The Violence Against Women Act in Washington, DC. Prior to that I at the National Gay and Lesbian Task Force. We had many critical issues to tackle. I am humbled to have been a contributor to equal rights and marriage for LGBT couples. Trish and I have been partners for almost twenty years and we were finally able to get married on June 29, 2015.

 

What value/resources has WIPP brought you (training or education, member or political connections/access, awareness of policies that affect your business and its growth, etc.) that have been helpful to you?

One of the most incredible resources WIPP has brought to both me personally and my business, is the network of professionals that have provided support and information that has been invaluable. Through connections of WIPP members and Board Members, I have been able to meet with key agency decision makers, exponentially increase our bonding capacity, and enhance my company’s exposure to opportunities through multiple teaming partnerships. My life has changed with great relationships and role models that take my breath away. I’ll affirm for everyone that the value, resources, education, connections, or whatever you desire is happening for you right now. I am just starting on this path and look forward to contribute as I grow.

 

Click here to read Lynn’s full bio.