3RD ANNUAL NCMA/NAVY/PTAC OF HAMPTON ROADS SERVICE-DISABLED VETERAN-OWNED

SMALL BUSINESS CONFERENCE 29 JUNE 2010

Maryland Vets Conference.pptx

Center for Veterans Enterprise (CVE)

• Division of VA’s Office of Small and Disadvantaged Business Utilization within the Office of the Secretary

• Executive Director: Mr. Tim J. Foreman

• Established February 14, 2001

• www.VetBiz.gov

• email: VACVE@va.gov

• phone: 866.584.2344 or 202.303.3260

• mail: U.S. Department of Veterans Affairs, 810 Vermont Avenue, N.W., Washington, D.C. 20420

SBA and VA Relationship• VA ranks #1 among Federal Govnment agencies in:

- Small Business (SB) Actions

- Service-disabled Veteran-owned (SDVO) SB actions

- Veteran-owned (VO) SB actions

- Historically Under-Utilized Business (HUB) Zone actions

• VA ranks #2 behind DoD in:

- Total Small Business spending

- Actions with Woman-owned small businesses

- Actions with Small Disadvantaged Businesses

source: FY 2008 Official Goaling Report on SBA web site

VA and SBA Have Mutual Duty to Support Veterans

• Promote formation and expansion of VOSBs• VA and SBA support National Veterans

Business Development Corporation• Promote awareness and education• Small Business Development Center support• Goaling Program • Performance Improvement

Legislation and Guidance on VOSB Programs

• P.L. 105-135: created Veterans Business Outreach Program

• P.L. 106-50: foundational; set 3% SDVOSB procurement goal

• P.L. 106-554: established two subcontracting goals – SDVOSBs, VOSBs

• P.L. 108-183: created set-aside opportunities for SDVOSBs

• Executive Order 13360: requires public posting of SDVOSB strategic improvement plans

• P.L. 109-461: gives VA unique authority for buying from Veterans

• P.L. 110-186: creates interagency Task Force

• P.L. 110-389: expands VA sourcing priorities to other agencies buying on behalf of VA

Improving Prime Contracting Opportunities for Veterans and Small Businesses – (FY 2008)

• $434,014,401,347 total reported Govt spend

• 21.49% SBC (VA: 35.32%)

• 1.49% SDVOSB (VA: 11.76%)

• 3.19% VOSB (VA: 14.73%)

• 6.75% SDB (VA: 7.97%)

• 3.39% WOSB (VA: 4.02%)

• 2.34% HUB (VA: 2.77%)

source: FY 2008 Official Goaling Report on SBA web site

Improving Subcontracting Opportunities for Veterans and Small Businesses – (FY 2008)

• $250,242,291,519 total reported spend

• 28.6% SBC (VA: 17.4%)

• 3.9% SDB (VA: 1.2%)

• 4.9% WOSB (VA: 1.9%)

• 1.5% HUB (VA: 0.1%)

• 0.9% SDVOSB (VA: 0.1%)

• 0.0% VOSB - no data posted to SBA report

source: Federal FY2008 Procurement Subcontracting Report available on SBA web site

Construction Set-Aside Guidance

• FAR 19.10 SB Competitiveness Demonstration Program

• Purpose: assess SB ability to compete without set-asides in Designated Industry Groups

• Measures awards to “emerging small businesses”

• Applies only to 10 Federal agencies, including VA

• Exclusions: Federal Supply Schedules, Govt agencies, Educational Institutions and Non-Profit Organizations

• FAR 19.1007: DIGS must continue to be considered for 8(a), HUBZone and SDVOSB program

Federal SDVOSB Program Overview: FAR 19.14

• Self-representation of status

• CO may set-aside for SDVOSBs– FAR Part 8 has priority– Must seek release from SBA for existing 8(a)

requirement

• If only one source, may sole-source up to $5.5M/product or $3M/service

• Limitations on Subcontracting applies

Unique VA Legislation – Veterans First!

• 38 USC 8127 & 8128

• VA Acquisition Regulation rule effective 01/07/10

• In SB Programs, VA shall give priority to SDVOSBs, then VOSBs, then all others

• VA shall verify ownership & control of VOSBs

• VA prime contractors shall use verified VOSBs

• VA may sole source up to $5 Million

• Primes must substitute “like for like” concern

• Some surviving spouses eligible

GAO SDVOSB Fraud Reports

• GAO 10-108 (10/23/09) & GAO 10-255T (11/19/09)

• 10 ineligible firms recd $100M in SDVOSB awards & $300M in other awards

• Two types of fraud identified: status and performance

• Contracting offices did not terminate performance after SBA negative findings

• 6 of 10 firms were “pass-throughs” violating contract performance requirements

• Recommend increased referrals for debarment

Commonalities in SB Program Reports

• GAO regularly reviews Small Business Programs

• Since 2008, 7 reports have been issued

• HUBZone: GAO-09-440 & 532T (3/25/09); GAO-08-975T & 964T (7/17/08)

• 8(a): GAO-09-16 (1/21/08)

• SDVOSB detailed on previous slide

• Common findings include:

• Need for additional surveillance reviews

• Need for stricter scrutiny of eligibility

• Need for improved oversight/mgmt

Limitations on Subcontracting

• Multiple FAR/VAAR clauses with some variations on the following text for construction (see FAR 52.219-3, 52.219-14; 52.219-27; VAAR 852.219-10 and VAAR 852.219-11); text changes to fit SB program:

• General construction, at least 15 percent of the cost of the contract performance incurred for personnel will be spent on the concern’s employees or the employees of other service-disabled veteran-owned small business concerns; or

• Construction by special trade contractors, at least 25 percent of the cost of the contract performance incurred for personnel will be spent on the concern’s employees or the employees of other service-disabled veteran-owned small business concerns.

• HUBZone and SDVOSB permit prime to use services of another eligible concern to satisfy performance requirement

Determining Responsibility

• FAR 9.104-1  General standards.(a) Possess adequate financial resources(b) Ability to meet delivery or performance schedule(c) Satisfactory performance record (d) Satisfactory record of integrity and business ethics(e) Necessary organization, experience, & skills(f) Necessary construction, and technical equipment(g) Be otherwise qualified and eligible

• Or have the ability to obtain (a)-(f) above

Responsible Subcontractors•FAR 9.104-4  Subcontractor responsibility

•Generally, primes are responsible for subcontractors

•When in best interest, CO may examine subs

•SBA makes final decision on small businesses

•VA is looking more closely at subcontractors due to :

•Increase in teaming arrangements•Increase in joint ventures

•Recent performance fraud reports

Mitigating Risk – VA’s Verification Program

• 38 CFR Part 74 (May 2008)

• Interim Final Rule

• VA affirms individual eligibility by examining Personally Identifiable Information for:

• Veteran status; service-connected Veteran status; eligible spouse

• Character of Service

• Reviews GSA Excluded Parties’ Listing

• VA examines ownership and business documents for:

• 51% or greater ownership by eligible parties

• Evidence of eligible parties in control of the business

• Independent status of business

• VA relies upon SBA for determinations when size or affiliation is questioned

• VA conducts random site visits

• Approved concerns appear in VIP database on web portal

Issues Encountered To Date• Most common issue: Disorganized owners inhibit application completion through

poor record-keeping

• Other issues:

• Protecting Personally Identifiable Information - owners are careless about release of SSN data and other sensitive or proprietary information sent electronically without encryption

• Possible identity theft - CVE referred case to VA OIG for action

• Remote ownership is a problem across SB programs and has been criticized in several GAO reports

• Owners need to be available during normal business hours, M-F, 9-5; GAO SDVOSB Fraud report identified a full-time USAF employee who was using his business for 100% pass-through to subcontractors.

• Control by ineligible parties is most common reason for status protest denial by SBA and for denial by VA for the Verification Program

Other Issues

• Most interesting issue: Individual versus “Government” freedom of speech - does Govt have authority to not publish an obscene or profane business name on a Govt-owned web site?

• Data Security & Data Sharing Issues: how much information can VA share with other Federal officials and what must be withheld? We refer regularly to the Privacy Act System of Records notice.

• Freedom of Information Act Issues: how much information may be released to media or competitors upon receipt of request?

Marketability Options – FCC, SFAA• Federal Contractor Certification Program:

• Help business owners understand the Federal contracting process, submit intelligent responses to solicitations and perform successfully once they win the contract.

• Jointly developed by VA CVE, Defense Acquisition University and the Association of Procurement Technical Assistance Centers

• Bonding Initiative to Enhance Marketability to Sureties: • The Surety and Fidelity Association of America offers training for

owners to improve their “bondability.”

Future Direction• Expect oversight of Federal construction awards and

projects to increase:

• Fraud reports will generate increased attention to performance oversight; high interest in ARRA jobs

• SDVOSB protests have spiked since release of the 11/09 fraud report; to continue short-term

• SBA and VA will examine more cases for referral to debarment and suspension committees

• Congressional interest in ensuring clean awards and performance will remain very high