GSA Shakes Things Up a Bit - A Small Business Quake
In an effort to encourage more small businesses to participate in the GSA’s multiple award contracts, it is instituting an interim rule that permits procurement officers to set aside a larger share of the awards to small, veteran owned, disadvantaged, minority, women owned businesses. This new rule took effect in November 2, 2011, advising agencies to seriously consider setting aside task and delivery orders for small businesses. Changes in the FAR make clear that agencies can set aside orders for small businesses on blanket purchase agreements (BPA's), under the GSA's Multiple Award Schedules and Contracts.
Trying to Maximize your GSA Schedule? Consider a CTA
Contract Teaming Arrangements (CTA's) allow for GSA holders to respond to a GSA contract requirement which they would otherwise be unable to do were they to respond to the requirements on their own. By using a CTA, ordering activities can procure a total solution rather than making separate buys for each part of a requirement and satisfy socio-economic procurement goals.
By forming a CTA, GSA contractors on different schedules can compete for orders for which they wouldn’t otherwise qualify, increase their market share, become more competitive, reduce risk by sharing responsibilities with other team members, focus on the products and services that best match their company’s resources and strengths, and find greater success as a small and/or disadvantaged business.
The differences between a CTA and a prime/subcontracting arrangement, are that each member of the CTA is considered a prime and receives direct payment and performance evaluations from the GSA purchase agency. Once member is designated as the team lead for streamlined communications.
For small businesses, there are many perks for using the CTA. The table below describes the differences between the new Contractor Team Arrangements and the Current Prime Contractor/ Subcontractor Arrangements. Take a look and find out what works best for your organizational needs:
||Prime Contractor/ Subcontractor Arrangement|
|Each Team Member must have a GSA Schedule Contract.||Only the prime contractor must have a GSA Schedule contract.|
|Each team member is responsible for duties addressed in the CTA document.||The prime contractor cannot delegate responsibility for performance to subcontractors.|
|Each team member has privity of contract with the government and can interact directly with the government.||Only the prime contractor has privity of contract with the government and can interact with the government. The prime contractor is responsible for its subcontracting activities. (Ordering activities are encouraged to specify in the Request for Quotation (RFQ) that the use of subcontractors requires prior approval by the ordering activities.)|
|The ordering activity is invoiced at each team member's unit prices or hourly rates as agreed in the task or delivery order or GSA Schedule BPA.||The ordering activity is invoiced in accordance with the prime contractor's GSA Schedule contract, including any applicable price reductions.|
|Total solutions, otherwise impossible under individual GSA Schedule contracts, can be put together quickly and easily.||The prime contractor is limited to the supplies and/or services awarded on its GSA Schedule contract.|
On 14 Nov 2011, OMB and SBA issued a memorandum to Procurement officials regarding the improvement of small business data. Quality and timely Federal procurement data are essential to increasing Federal small business contract awards and achieving the agencies small business contracting goals. Actions are being taken to improve the quality of procurement data on small business contract awards.
As a result of these changes separate processes related to small business data quality are being aligned to increase awareness and attention on small business contracting data. Integrating small business data quality reviews into routine agency processes and procedures is expected to reduce burden on the acquisition workforce, facilitate improved acquisition planning, and increase data accuracy of awards made to small businesses.
Accordingly, OMB and SBA asks all procurement officials to increase the attention given to small business data quality as part of their ongoing data validation efforts. Reference memorandum.
Most small businesses feel intimidated when competing with larger businesses. If you review the Top 100 Government Prime Contractors List, published by Washington Technology.com, majority of the companies are large businesses. If you are a small business reviewing a government solicitation, you may come to the conclusion that the requirement is tailored for a large business. You may ask yourself, why bid? In most cases, you would not bid. The truth is, the government encourages large and small business participation. The small business set-aside programs are not only used for small businesses to respond, but the subcontracting plans that mandate large businesses to respond to a solicitation also require a planned percentage to be subcontracted or set-aside for small businesses. This seems to be fair for the small businesses, but the question is, is it fair to large businesses? Why are they required to share a piece of their pie with small businesses?
The federal government has an overall goal of setting aside 23% of prime contracts flowing to small businesses. Every federal government purchase anticipated to be valued from $2500 to $100,000 is automatically set-aside for small businesses as long as there are at least 2 companies that can provide the product/service. Contracts over $100,000 can be set aside if enough small businesses are qualified to do the work. Contracts over $500,000 have to include a small business subcontracting plan ensuring small businesses an opportunity to obtain work under these large contracts.
Without these set-aside programs, large companies would continue to dominate the federal market and the small businesses would go out of business, never get off the ground, or never be created due to the lack of projected demand. For years, Lockheed Martin, Northrop Grumman, Raytheon, Boeing, and other prime contractors continued to capitalize on the federal marketplace. Without the small businesses set-aside programs, the small businesses would not be able to participate, gain financial stability, or grow into a medium to large size business. If the government had to choose between a Top 100 prime contractor and a small business, they would most likely pick the large prime. The set-aside programs ensure that the government gives the little guy a chance. This also benefits the government in the long run because the small guy is enabled and expanded to become a contender for other contract vehicles. This promotes efficient and effective competition. It also provides the government with competitive and responsible buying options.
The 8(a) program is a good example of a fair set-aside program, when properly executed. There is a certain time allotted for the small business to take advantage of set-aside contracts, learn the ropes, gain financial stability, capture commercial business to off-set the government revenue, and grow into a medium to large size company. This opens up a new slot for another small business, and enables your company to subcontract and help other small businesses. I guess you could call this the government’s small business circle of life. If rules are followed, it works for all parties involved.
Contact GovPartners to find out how your organization can join the government's circle of life.
This analysis is a first-ever, in-depth review of the characteristics of women-owned firms in federal contracting and a comparison of those characteristics with those of all women-owned firms. It will enable public-policy makers, government procurement officials, women business owners themselves, and other interested parties to gain a greater understanding of the women entrepreneurs who are providing products and services to federal government agencies. Reference article. Download analysis.