The current federal small business contracting goals are at least 23% of the total value of all small business eligible prime contract awards to small businesses for each fiscal year.
The SBA’s Small Business Procurement Scorecards and GSA’s Small Business Goaling Report are distributed widely, receive media attention, and heighten public awareness of the issue of small business contracting.
Below you can find more information about the small business classification categories and contract awards as it relates to Acolyst:
WOSB / EDWOSB
Acolyst is both certified Woman-Owned Small Business (WOSB) and Economically Disadvantaged WOSB (EDWOSB).
Under the WOSB and EDWOSB program, contracts may be set aside for economically disadvantaged WOSBs in industries in which women are underrepresented and substantially underrepresented. In FY2019, the federal government awarded $25.5 billion to WOSBs.
What does this mean?
• Sole source awards to WOSB and EDWOSB can be made directly from the government. There are 4 requirements for a sole-source contract award:
o Is the contract in a WOSB/EDWOSB eligible North American Industry Classification System (NAICS) code?
o Is the contract valued up to $4.5 million for service contract ($7 million for manufacturing contract)?
o Can the contract be awarded to the WOSB/EDWOSB at a fair and reasonable price?
o In the determination of the contracting officer, is there a reasonable expectation that there is only one WOSB that can perform the contract?
• There are NO cap limit on contract dollars set-aside and awarded to WOSB / EDWOSB if not sole sourced but competed.
o National Defense Authorization Act, which went into effect on May 7, 2013, removed “caps” on contract dollar amounts under the WOSB program for competed contracts.
• Contracting officers must award at least 5% of all prime contract dollars awarded each year to WOSB and EDWOSB. These are legislative statutory contracting requirements.
• Only designated industries according to the NAICS codes are eligible for WOSB / EDWOSB awards.
o Click here for SBA’s list of qualifying NAICS for WOSB and EDWOSB – https://bit.ly/3aF4Tu1
o Currently there are 364 NAICS codes eligible for WOSB and 80 for EDWOSB
The WOSB program is one of several contracting programs that Congress has approved to provide greater opportunities for small businesses to win federal contracts. The SBA’s implementation of the WOSB program is likely to remain a priority for congressional oversight during the 117th Congress, as is federal agency use of the program.
Acolyst’s principal office is in a HUBZone designated area and qualifies for the SBA program.
The Historically Underutilized Business Zone Empowerment Contracting (HUBZone) program targets assistance to small businesses located in areas with low income, high poverty, or high unemployment with contracting opportunities in the form of set-asides, sole-source awards, and price-evaluation preferences.
Its primary objectives are job creation, stimulate capital investment in distressed communities, and empower communities through economic leverage. In FY2019, the federal government awarded $11.5 billion to HUBZone-certified businesses.
What does this mean?
• Contracting officers must award at least 3% of all prime contract dollars awarded each year to HUBZone -certified businesses. These are legislative statutory contracting requirements.
• HUBZone-certified businesses get a 10% price evaluation preference in full and open contract competitions over another offeror – other than another small business.
o NOTE: the preference CAN NOT be used: (1) in acquisitions where price is not an evaluation factor and (2) in the award of multiple award contracts, buying schedules or in circumstances where all fair and reasonable offers are accepted.
• Sole source HUBZone contracts can be awarded if the contracting officer determines that the anticipated contract will not exceed $4.5 million for service contracts ($7.5 million for manufacturing)
SDB / DBE
Acolyst is classified as a Small Disadvantaged Business (SDB) and Disadvantaged Business Enterprise (DBE).
A small disadvantaged business is defined as a firm that is 51% or more owned, controlled, and operated by a person(s) who is socially and economically disadvantaged. Under the DBE program, women are presumed to be socially and economically disadvantaged individuals.
What does this mean?
• 5% of the total value of all small business eligible prime contract awards and subcontract awards to small disadvantaged businesses (SDB) for each fiscal year.
• Exception is the Environmental Protection Agency (EPA) and Department of Transportation (DOT) which have determined that not less than 10% shall be expended with DBEs.
In a report issued February 2021, the federal government has had difficulty meeting the WOSB and HUBZone small business procurement goals. Specifically, when evaluating 15 fiscal years (from FY2005 – FY2019) the following was found:
• the 23% contracting goal for small businesses generally was achieved 8 times (in FY2005 and FY2013-FY2019),
• the 5% contracting goal for small disadvantaged businesses was achieved in all 15 fiscal years,
• the 5% contracting goal for women-owned small businesses was achieved twice (in FY2015 and FY2019),
• and the 3% contracting goal for HUBZone small businesses was not met in any of these fiscal years.
The SBA has announced that it is focusing additional efforts on promoting the HUBZone program to federal contracting officials, primarily due to the continuing difficulties federal agencies have had in meeting the 3% goal for HUBZone small businesses.
Additionally, large prime contractors are required to make a “best effort’ attempt to make use of small, disadvantaged, and women-owned Small Businesses as subcontractors if the opportunity exists under the contract.
Sometimes, the Federal Government provides substantial monetary incentives to large, prime contractors to award sub-contracts to small, or otherwise disadvantaged, firms.
For most large prime contracts anticipated to exceed $700K (or $1.5M for construction contracts), large business contractors must create a subcontracting plan.
What are the requirements to be awarded a set-aside?
For set-aside contracts, a business must perform at least a given percentage of the contract. This provision limits the amount of subcontracting a concern may enter with other firms in a partnership type of relationship (subcontracting) when performing these types of contracts. The provisions are as follow:
o Services — At least 50 percent of the contract cost for personnel must be performed by the prime contractor’s own employees.
o Construction — For general and heavy construction contractors, at least 15 percent of the cost of the contract, not including the cost of materials, must be performed by the prime contractor with its own employees. For special trade construction, such as plumbing, electrical, or tile work, this requirement is 25 percent.
o Manufacturing — At least 50 percent of the cost of manufacturing, not including the cost of materials, must be done by the prime contractor.
Federal agencies generally reserve contracts that have an anticipated value greater than the micro-purchase threshold (currently $10,000) but not greater than the simplified acquisition threshold (currently $250,000) exclusively for small businesses unless the contracting officer is unable to obtain offers from two or more small businesses that are competitive with market prices and the quality and delivery of the goods or services being purchased.
Yet, under the set-aside program, federal agencies are required to set aside contracts that have an anticipated value exceeding the simplified acquisition threshold (currently $250K) exclusively for small businesses when there is a reasonable expectation by the contracting officer that offers will be obtained by at least two responsible small businesses offering the products of different small businesses (Rule of Two) and the award will be made at a fair market price. Those set aside contracts can be reserved for specific types of small businesses such as WOSB and HUBZone small businesses.