Tuesday, June 30, 2009

FAR Out, Man.

Some of the most important things to know about when it comes to government contracting are the Federal Acquisition Regulations, commonly referred to as the FAR. Why, you may ask? It’s simple: because the FAR are the rules that all federal agencies have to follow when they purchase supplies or services. All solicitations follow various outlines of the FAR and incorporate, usually ‘by reference’ rather than spelling out, FAR clauses within the solicitation documents. It is expected of the company bidding to understand most of the guidelines or to do some extra research themselves by asking the Contracting officer for additional documents or an informational website. All FAR clauses included must be followed or the contractor risks termination for cause.

The acquisition process that the FAR creates and maintains consists of three phrases: 1) acknowledgment of need 2) contract creation and 3) contract administration. It regulates the activities of government personnel and how they handle these contracts, not the actual purchasing activities of the bidders, unless mentioned in the contract guidelines. The full book containing the FAR is over 1,000 pages long and is updated regularly, so it is important to stay abreast of the changes. There are 53 different parts of the FAR, divided into 8 different subchapters labeled A through H. From there, it breaks down into subparts, sections, and subsections. When referenced in a contract, only the section and subsection are shown though. For example, FAR 52.222-19 refers to FAR Part 52, Section 222, subsection 19 – “Child Labor—Cooperation with Authorities and Remedies.”

The FAR is the most important single document there is when it comes to government contracting. Though it has dozens of elements, the largest and most commonly seen part of the FAR is Part 52. It contains the most-used contract clauses, certifications, notices, and other instructions for firms interested in performing a bid to abide by. However, the most heavily regulated part of the FAR isn’t about labor or production—it’s about price. The entirety of Subchapter D focuses on socioeconomic programs and their relations to federal contracts.

Even though there are regulation standards set for the entire federal government, some branches, such as the Department of Defense and the Army, have their own supplemental regulations. Also, some agencies aren’t required to follow the FAR, such as the US Postal Service or the Tennessee Valley Authority. It is interesting to note that there are agencies that are exempt or can tack on additional regulations because the original intent of the FAR was to create a government-wide set of rules in order to keep things simple. With that in mind, it is important to keep up with both the FAR and the individual agencies’ regulations to ensure that the bidding process goes in your favor. Federal regulations can be found here: http://www.acquisition.gov/far/.

In addition, while the contracting officer may answer your questions, it might be easier to keep a copy of the updated FAR in your office, or at least be able to reference it when needed. If you go to the website, you can download a PDF file which has all the current regulation standards, an explanation, and their number. Another useful tool is that they list the current bills and discussions about potential changes to the FAR which might affect your business. When dealing with the government, it is best to keep up to date on bills and other legislation that might change how contracting operates. It is important to know how these regulations change because during the bidding process, the bidder must do one of the three things: 1) comply with the stated regulations 2) demonstrate that they will comply when the contract is awarded to them, 3) claim exemption from them. One of these three things must be done or the bid will not be awarded.

Thursday, June 25, 2009

The 10 Regions of Government Contracting

As mentioned in the previous post, the most effective way to market to the government is by knowing where your product/service is needed. The Small Business Administration (SBA) has broken the country into ten different regions. There is at least one SBA office in every state which provides resources for small business survival and growth. Each region offers the same standard resources package for small businesses; however, some are more prolific than others. When logging onto the SBA website, research shows that some SBA contracting regions are more active in the small business community than others.

Below are the states that are in each region.

Region 1 - Maine, New Hampshire, Vermont, Connecticut, Massachusetts, Rhode Island
Region 2 - New York, New Jersey, Puerto Rico, and U.S. Virgin Islands
Region 3 - Pennsylvania, Maryland, West Virginia, Virginia, Delaware
Region 4 - Kentucky, Tennessee, North Carolina, South Carolina, Georgia, Florida, Alabama, Mississippi
Region 5 - Michigan, Ohio, Indiana, Illinois, Wisconsin, Minnesota
Region 6 - Texas, Oklahoma, Arkansas, Louisiana, New Mexico
Region 7 - Kansas, Nebraska, Iowa, Missouri
Region 8 - Montana, Colorado, Utah, Wyoming, North Dakota, South Dakota
Region 9 - California, Nevada, Arizona, Hawaii, Guam
Region 10 - Washington, Oregon, Alaska, Idaho

There are over 2,500 government buying offices throughout the US. Being located in one region does not prohibit you from doing business in another; many businesses – even small ones – do business across several regions. One of the many things that a business owner needs to be aware of is that while his business may be in Region 1, their services might be needed badly in Region 4 as well. Marketing to the government can help expand the business nationwide and have a guaranteed check from Uncle Sam. Working with the government doesn’t mean that your business has to be right next to the Naval Yard that needs a new refrigerator. So long as you’re able to deliver the goods per their request, your business is the most able and appealing to the government no matter the location.

There is a flip side to this, though. If your business is relatively new to the contracting game, it is best to try local contracts first to test the waters. Being local and having the ability to meet face-to-face with a contracting officer will give your business preference. Developing a more personal connection with contracting officers can help give you a leg up over your competition. Once your business has completed several contracts, you will have a good feel for the process and branching out won’t be nearly as difficult.
In addition, what type of business you are really counts. For instance, if completing a contract requires you to be on a job site, don’t bid on contracts too far away. Stick to a smaller geographical region in order to make the job easier on yourself.

With Gateway to Government, your company can use our tried and true name to help jumpstart your government contracting career. Our name is established in the Washington, D.C. area and can go nationwide, making your location unimportant as you can share the benefits of having our certifications and name.

Tuesday, June 16, 2009

Grabbing the Government’s Attention

Marketing is one of the most dynamic and ever-changing fields out there and all small business owners know it. It is the area most likely to change, on a whim, and one of the few areas that needs constant attention and research to ensure your message reaches the right crowd. Marketing to the government is different than other businesses or individuals. There is a certain way that you have to promote to Uncle Sam so you can be competitive in the government contracting arena.

One of the first things that needs to be done is market research. As we’ve mentioned multiple times, the government buys any- and everything. There is pretty much nothing that Uncle Sam has not purchased at some point and time. The main thing one has to realize is where to market your supplies and services in the country. If you’re in Georgia, you can sell your products anywherei n the US – not just that state. The federal government is looking for the cheapest vendor and if the business happens to be two states away, so be it. There are ten different regions that the Small Business Administration has created which encompass more than 2,500 buying offices throughout the US. To succeed, a contractor must research each region to see which one would be the most lucrative for their business to market to and participate in bids.

Unlike marketing to the public, there are certain rules and reglations about what you can and cannot say when selling to the government. For instance, the flowery, descriptive words one would use as a hook, line and sinker for the everyday individual aren’t allowed. What your company sells is presented in list format; there is no other description aside from the product/service title. A benefit of having every product and/or service your company offers in a list format is that the government will order more from you or select your company over another because of your larger selection. It makes more sense for Uncle Sam to purchase from one vendor, rather than multiple.

There are several different ways to let the government know exactly what products and services you have to offer. One way is to create a GSA schedule. This method allows a business to establish long-term government-wide contracts for specific services and products. Vendors with schedules are preapproved to contract with federal agencies at pre-established prices, automatically putting your company on a list of “preferred vendors.” However, these are not that easy to obtain and can take up to a full year to get everything in place. There are stacks of paperwork and red tape to go through, not to metion the research andother elements that go into having a GSA schedule awarded to your company. GSA schedules are not the right route for every company to take, but can be very beneficial to those companies making government contracting a major portion of their business.

Another way to let the government know about your services is to have and distribute a Statement of Abilities. Included are the classification codes for the company’s products/services, contact information, a statement about your company, and an extensive list of all the products and services that your company provides. Gateway to Government understands the difficulty in creating both the GSA schedule and statement of abilities – there are very specific formats and requirements for each. To make the process go smoothly, we have created a capabilities statement template for each business that participates in our program. We help you write effective descriptions about your company to help market and sell your services and products. With Gateway to Government, your foot isn’t just in the door – we’re holding it open.

Thursday, June 11, 2009

SBA Lends a Helping Hand to Small Businesses

The Small Business Administration (SBA) recently created a new program called the American Recovery Capital (ARC) in order to help struggling businesses during these hard economic times. These loans are not designed for start-up businesses, but those that have been in operation for at least three years and have supporting documents for proof. Effective on June 15, 2009, the ARC loan program will give up to $35,000 to small businesses that are suffering economically until September 30, 2010 – or until the funds have run out.

Some of the benefits of obtaining an ARC loan are that they are interest free, with no other hidden fees, and each one is a deferred payment loan. In addition, the business has 12 months after the last loan check received before payments are owed on the loan. The loan will be paid back over a period of 5 years. The funds provided are to go toward term and revolving lines of credit, mortgages, business credit cards, capital leases as well as other vendors, suppliers and utilities.

One of the main eligibility requirements to get one of these loans is that the business must have a history of good performance and their current financial difficulties are a result of the current economy. There must be supporting documents stating that in at least one of the past three years the business has turned a profit and will have sufficient cash flow to make current future loan payments over a two-year period. The SBA wants these documents and the projected cash flow in order to deem whether or not your debts are able to be paid off in a two year period as well as repaying the loan. Their logic is that it would make no sense for the SBA to give an ARC loan to a struggling business that, even with assistance, will ultimately fail due to severe pre-existing debt or lack of future cash flow.

The money is not coming from the SBA itself, which is why the loan must be repaid promptly within a two year period and only certain good standing businesses are eligible. One of the major benefits of this loan is that the banks are loaning the money to the businesses, but the SBA will be paying the interest charges, not the small businesses. By having the loans payments wait a year, the SBA is giving small businesses a chance to invest in themselves instead of pouring all their money in their debts. These loans are going to be given out in the hopes that they will stimulate the community that the business serves through creating jobs and restoring the bank’s faith in loaning to small businesses for future loans.

For more information about applying for an ARC Loan visit the SBA website: http://www.sba.gov/recovery/arcloanprogram/REC_ARCLOAN_WHERE.html

Tuesday, June 9, 2009

Veteran Owned Businesses

Veteran Owned Businesses are businesses that are owned by veterans and are another type of government classification for businesses. This certification is one of the most beneficial and is usually preferred more often than Woman or Minority owned. In addition, there isn’t only a Veteran Owned title, but three others that each offer different advantages in government contracting.

Veteran Owned Business

First, let’s define what the government considers a veteran. It is an individual who served in the active military, naval, or air service and who was discharged other than dishonorably. One of the key differences between a small business and a veteran owned business is that the size does not matter, so long as the owner and operator of the company is a certified veteran of the armed forces.

There are two other classifications that are underneath the Veteran owned business – Service-Connected Disability and Service Disabled Veteran. Service-Connected Disability is someone that received an injury in the line of active duty. A Service Disabled Veteran is an individual who served in the military and whose disability was received or aggravated during their duty in the service. In order to be eligible for the Service Disabled Veteran classification, you must have one of the following: a letter from the Veteran’s Administration, a Department of Defense form 214, Certificate of Release or Discharge from active duty, or a statement from the Service from the National Archives and Records Administration stating your service-connected disability.

The third type of Veteran owned business is a Service-Disabled Veteran-Owned Small Business, which, in addition to meeting the Veteran qualification, must also meet the Small Business Administration size requirements for a small business. In addition, at least 51% of the company must be owned, maintained, and operated by one or more Service-Disabled Veterans, as well as having a service disabled veteran holding the highest officer position in the company.

Similar to Woman-Owned Small Businesses, the Veteran classification doesn’t mean that veterans are socially or economically disadvantaged. However, the government is responsible for ensuring that these individuals receive fair consideration in agency purchases. Congress mandated that at least 3% of all government contracts are to be awarded to disabled veteran owned businesses. In addition, a group called Veterans Business Outreach Program (VBOP) helps eligible veterans build small businesses through mentoring, counseling, and business training. Another program, the Veterans’ Entrepreneurial Training (VET) offers a long-term (up to 12 months) of in-depth business training to veterans.

For more information about the Veteran classification visit: http://www.vetbiz.gov

Thursday, June 4, 2009

The Different Types of Set-Aside Programs

As mentioned in our previous post, set-aside programs are designed and intended to help disadvantaged businesses get a leg up in the government contracting arena and to make the bidding process more competitive. There are several programs that the Small Business Administration (SBA) has created to give advantages to certain types of small businesses; one that we’ve already mentioned, but today we’re going to discuss two of the biggest ones: woman- and minority-owned small businesses. Please note that businesses can only qualify as a woman or minority owned business if they also meet the SBA standards for a small business. The following two categories fall under the Minority and Disadvantaged Business Owners.

Woman-Owned Small Business

A business qualifies as a woman owned business if at least 51% of the company is owned by one or more women, or at least 51% of the stock must be owned by one or more women. In addition, one or more women must have majority control over the daily business operations and management. One of the many goals of having this certification is to help teach woman how to market to the government and bring them into the federal contracting marketplace, and the procurement benefits are usually delivered through the Office of Government Contracting.

The certification “woman-owned business” can be of significant help in the government contracting arena. In 1994 President Clinton signed Public Law 103-335, which established a government-wide goal of having no less than 5 percent of all prime and sub-contracts awarded each year given to women-owned businesses. The law added women-owned companies as a separate class for subcontract goals and required agencies to meet minimum standards.

Another benefit of being a woman-owned business (in addition to the contracting preference) is that the SBA offers training courses and counseling in owning or managing a business as a woman, including financial, management, marketing and technical assistance, and procurement training. There are at least 70 women’s business centers in 40 states and an additional location in the Washington, D.C metro area. Part of the benefit of these courses is that they will help teach women how to market effectively to the government while still having the agencies’ preference.

Minority-Owned Small Business

As a part of the small disadvantaged business development program, businesses that are owned by people of a ‘socially disadvantaged ethnic group’ are given additional procurement advantages. What the government considers socially disadvantaged individuals, completely disregarding the person’s individual qualities or talents, are those who have been subject to ‘racial or ethnic prejudice or culture bias because of their identity in relation to being a member of a group.’

To obtain the minority status, one must be able to present a clear and well-supported case. First off, the applicant, who must be a US citizen, must own at least 51% of the company. Secondly, the individual must be able to prove that they are at a social or economic disadvantage based upon their color, national origin, gender, physical handicap, long-term residence in an insolated environment away from American society, or other similar instance that was beyond the individual’s control. The discrimination the individual faced must have happened in America and not another country, and the social disadvantage must have had a negative impact on their entry into the business world. In addition, one must be able to prove that they are indeed suffering a disadvantage from the aforementioned differences and that disadvantage must be constant and chronic.

Just as women have their own centers for training and counseling, so do minority owned businesses. These small business development centers offer counseling and management advice and are in every state. Visit the main SBA website at www.SBA.gov for more information.

Some of the many ways these opportunities are presented are through contracting officers, the SBA, and from the Office of Small and Disadvantaged Business Utilization (OSDBU). Contracting officers are required to give a certain percentage of all small business contracts to minority owned businesses, both as a primary contractor and as a sub-contractor. In addition, there are different loans and advance payment structures that may be available to program participants.

A huge benefit of working with Gateway to Government is that we have both of these certifications, giving our company several advantages over many others. The preference that we have makes government contracting a breeze for your company to get started bidding on – and winning – government contracts. Uncle Sam is required to favor businesses with these certifications, so why not work with Gateway and participate in a program legally required to help your business grow!

Tuesday, June 2, 2009

Set Aside Programs

The Small Business Administration (SBA) wants all small businesses to succeed in the government contracting arena. A set-aside program is proof that the SBA takes actions in trying to help out businesses of all varieties. We already spoke of one type of program, the HUB Zone, but there are plenty more than just that.

A set-aside program is a category reserved exclusively for businesses who meet the minimum requirements. These programs generally reserve contacting dollars for small, woman-owned or minority owned businesses. These set-aside programs allow businesses that would traditionally be at an advantage to obtain favor when bidding on a contract or becoming a sub-contractor to a larger company.

While many of you may consider yourselves to be small business owners, that may not be the case with the SBA. To participate in its set-aside program, your business must follow a strict set of rules, which can vary slightly depending on the industry. As a general rule, it must be independently owned and operated, must not be the dominant company in the field of operation in which you’re bidding, and cannot have more than 500 employees. However, there are size standards that business owners need to be aware of once they receive the small business qualification. For instance, once the SBA has awarded your company the title ‘small business,’ it can be taken away if one of two things happens:

1. your business grows and exceeds the maximum employee number (over 500), or
2. the amount of annual income for each industry code exceeds its set limit.

It may seem odd that there are limitations to these programs, but they are set in place for a good reason. In order to combat fraud, the size and monetary limits help the SBA prevent larger companies (that have grown from being small) from obtaining contracts intended for legitimate small businesses, who need the assistance more. What many business owners need to realize is that these programs are not a guaranteed lifetime all-access pass to contracts – they are intended to give a temporary advantage in the arena until the company is strong enough to compete in the big leagues.

In the upcoming weeks, we will be focusing on the different types of certifications that these set-aside programs create and the lengthy process involved in obtaining them. Gateway to Government knows how painful it can be sometimes to become qualified, which is why we allow our clients to use our certifications by acting as contractors. We’re a small, woman, minority-owned business – that’s three classifications right there. Many individuals are lucky to just be one, but we’re three, giving us preference over many other businesses in the contracting arena. Gateway to Government wants to make your contracting experience a breeze, which is why with our packages you can use all our certifications to help give your business the leg-up it truly deserves.