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
Showing posts with label governemnt contracting. Show all posts
Showing posts with label governemnt contracting. Show all posts
Tuesday, June 9, 2009
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!
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!
Thursday, May 21, 2009
A HUB Zone Is Not a Husband Hangout
The term HUB-Zone is thrown around a lot in government contracting. Many contracts include restrictions that limits bidding to businesses located within a these zones. If you are new to the game, it is easy not to know if the area your business is located in qualifies as a HUB-Zone or even if your business qualifies.
So… what is a HUB zone?
The Small Business Administration (SBA) created the Historically Underutilized Business Zone (frequently referred to as a HUB Zone) program in 1997 when Congress passed the Small Business Reauthorization Act, which included the HUB-Zone Empowerment Act. The SBA enforces the act by maintaining a list of qualified businesses for federal agencies to use. They certify businesses in these areas as Hub-Zone businesses based on the following requirements:
• The company must be a small business based on the size standards used by the North American Industry Classification System (NAICS).
• At least 51% of the company must be owned and controlled by US citizens.
• The main location of business, where most employees do work (excluding contract sites), must be located in an authorized HUB zone.
• At least 35% of the company’s employees must live in a HUB zone.
The main objective of the SBA’s HUB Zone program is to promote economic growth and create more employment opportunities by bringing them the opportunity to obtain Federal contracts. The SBA reports to Congress how much the Empowerment Act has increased employment opportunities in these areas. According to the SBA’s website, for an area to be classified as underutilized it must have at least one of the following:
• Qualified census tract criteria (areas are subject to change every 10 years due to census)
• A qualified non-metropolitan county that has an average household income of less than 80 percent of the State median household income, or with unemployment rates 140% or more above the state-wide average.
• Land within a federally-recognized Indian reserve.
There are many advantages designed to help businesses located within a HUB Zone and meeting all the requirements obtain these special federal contracts. For many contracts, there must be at least $100,000 set aside for small businesses that qualify as HUB-Zones. There can be sole-source contracts in the areas, but the value must be greater than $100,000 but less than $3 million (or $5 million for manufacturing contracts). While that may not seem like a decent advantage, HUB Zone small businesses receive what is known as a “10% price evaluation.” This means that a HUB Zone company bidding on a project (based on price) will have their bid evaluated at 10% lower than it actually is - so long as their price is no more than 10% higher than a non-HUB Zone small business, they will win.
Aside from the benefits listed above, there are plenty more opportunities for small businesses within these areas. Another example is that when larger companies that win bids need sub-contractors they are required to have at least one HUB Zone sub-contractor to help complete the project. In addition, these businesses can apply for higher surety bonds then others, tax credits, investment tax deductions, and tax-free facility bonds. For more information about where these HUB Zones are located visit the SBA HUB Zone homepage: http://www.sba.gov/hubzone.
So… what is a HUB zone?
The Small Business Administration (SBA) created the Historically Underutilized Business Zone (frequently referred to as a HUB Zone) program in 1997 when Congress passed the Small Business Reauthorization Act, which included the HUB-Zone Empowerment Act. The SBA enforces the act by maintaining a list of qualified businesses for federal agencies to use. They certify businesses in these areas as Hub-Zone businesses based on the following requirements:
• The company must be a small business based on the size standards used by the North American Industry Classification System (NAICS).
• At least 51% of the company must be owned and controlled by US citizens.
• The main location of business, where most employees do work (excluding contract sites), must be located in an authorized HUB zone.
• At least 35% of the company’s employees must live in a HUB zone.
The main objective of the SBA’s HUB Zone program is to promote economic growth and create more employment opportunities by bringing them the opportunity to obtain Federal contracts. The SBA reports to Congress how much the Empowerment Act has increased employment opportunities in these areas. According to the SBA’s website, for an area to be classified as underutilized it must have at least one of the following:
• Qualified census tract criteria (areas are subject to change every 10 years due to census)
• A qualified non-metropolitan county that has an average household income of less than 80 percent of the State median household income, or with unemployment rates 140% or more above the state-wide average.
• Land within a federally-recognized Indian reserve.
There are many advantages designed to help businesses located within a HUB Zone and meeting all the requirements obtain these special federal contracts. For many contracts, there must be at least $100,000 set aside for small businesses that qualify as HUB-Zones. There can be sole-source contracts in the areas, but the value must be greater than $100,000 but less than $3 million (or $5 million for manufacturing contracts). While that may not seem like a decent advantage, HUB Zone small businesses receive what is known as a “10% price evaluation.” This means that a HUB Zone company bidding on a project (based on price) will have their bid evaluated at 10% lower than it actually is - so long as their price is no more than 10% higher than a non-HUB Zone small business, they will win.
Aside from the benefits listed above, there are plenty more opportunities for small businesses within these areas. Another example is that when larger companies that win bids need sub-contractors they are required to have at least one HUB Zone sub-contractor to help complete the project. In addition, these businesses can apply for higher surety bonds then others, tax credits, investment tax deductions, and tax-free facility bonds. For more information about where these HUB Zones are located visit the SBA HUB Zone homepage: http://www.sba.gov/hubzone.
Tuesday, May 19, 2009
What Are No Bid Contracts?
There are several things business owners need to know when joining the contracting circle. As we mentioned last week, contract bundling is a big one that many don’t know about, and this week’s topic is no different. Lucky for us regular folk, the government doesn’t create wacky acronyms for every contracting term they use and in this case the name makes sense.
Sole-source contracts, also commonly known as no bid contracts, are contracts awarded when the government feels there is only one company or business that can successfully complete all requirements of the contractual agreement. Another reason Uncle Sam feels these contracts are necessary is because if regular bidding were to be held, only one company would be eligible to successfully complete the contract, making the process last longer than it should.
Typically, the government awards sole source contracts after negotiations with the company and the sole source contracts are considered justified only if a few criteria are met:
a. only one business has a product that will meet the projects needs or only one firm can do the work (for example due to patent restrictions)
b. the existence of an unusual and compelling urgency (emergency, disaster, etc)
c. for purposes of industrial mobilization or expert services (unique or exclusive experience)
d. a sole source award is authorized or required by law, (socio-economic programs, etc)
e. national security
f. the general interest of the public, or
g. the work involved is time sensitive.
While no bid contracts may seem like a negative aspect of government contracting, there is some good to them. For instance, in a pinch, if you’re offering services that the government needs immediately, then Uncle Sam will forego the normal bidding process and award the contract much more quickly. Or, if you have an exclusive product, patent, or licensing agreement or some sort of unique experience or expertise, you are going to be very well-positioned to do business on sole-source contracts. Of course, there are instances where this type of contract backfires and corruption ensues.
In March 2009, President Obama made a promise to help cut back on the number of no bid contracts in order to save money. As mentioned before, the original intent of awarding contacts without bidding is to cut costs and to speed the process up, but not everything always goes according to plan. The President claims that by decreasing the amount of sole source contracts the government can save as much as $40 billion each year. "The days of giving government contractors a blank check are over," President Obama stated.
President Obama asked his budget director, Peter Orszag, to have a reform plan ready by the end of September 2009. The reforms will involve making more contracts open to bidding and, in the process, hopefully saving the taxpayers money by awarding the contract to an independent contractor and their sub-contractors rather than a single company that could potentially inflate the price.
Obviously, there are still circumstances in which sole-source contracts will occur. For example, if you hold the patent on a particular item that the government determines that it needs, a sole-source contract will still be awarded.
The reforms requested are important because in the past eight years the amount of money spent on contracts has increased from $200 billion in 2000 to $500 billion in 2008. Many believe that a large percentage of the increase went to no bid contracts and by eliminating the number of them in 2010, Uncle Sam hopes to create more competition to cut back costs and to help the independent contractors and small business owners gain more work.
Sole-source contracts, also commonly known as no bid contracts, are contracts awarded when the government feels there is only one company or business that can successfully complete all requirements of the contractual agreement. Another reason Uncle Sam feels these contracts are necessary is because if regular bidding were to be held, only one company would be eligible to successfully complete the contract, making the process last longer than it should.
Typically, the government awards sole source contracts after negotiations with the company and the sole source contracts are considered justified only if a few criteria are met:
a. only one business has a product that will meet the projects needs or only one firm can do the work (for example due to patent restrictions)
b. the existence of an unusual and compelling urgency (emergency, disaster, etc)
c. for purposes of industrial mobilization or expert services (unique or exclusive experience)
d. a sole source award is authorized or required by law, (socio-economic programs, etc)
e. national security
f. the general interest of the public, or
g. the work involved is time sensitive.
While no bid contracts may seem like a negative aspect of government contracting, there is some good to them. For instance, in a pinch, if you’re offering services that the government needs immediately, then Uncle Sam will forego the normal bidding process and award the contract much more quickly. Or, if you have an exclusive product, patent, or licensing agreement or some sort of unique experience or expertise, you are going to be very well-positioned to do business on sole-source contracts. Of course, there are instances where this type of contract backfires and corruption ensues.
In March 2009, President Obama made a promise to help cut back on the number of no bid contracts in order to save money. As mentioned before, the original intent of awarding contacts without bidding is to cut costs and to speed the process up, but not everything always goes according to plan. The President claims that by decreasing the amount of sole source contracts the government can save as much as $40 billion each year. "The days of giving government contractors a blank check are over," President Obama stated.
President Obama asked his budget director, Peter Orszag, to have a reform plan ready by the end of September 2009. The reforms will involve making more contracts open to bidding and, in the process, hopefully saving the taxpayers money by awarding the contract to an independent contractor and their sub-contractors rather than a single company that could potentially inflate the price.
Obviously, there are still circumstances in which sole-source contracts will occur. For example, if you hold the patent on a particular item that the government determines that it needs, a sole-source contract will still be awarded.
The reforms requested are important because in the past eight years the amount of money spent on contracts has increased from $200 billion in 2000 to $500 billion in 2008. Many believe that a large percentage of the increase went to no bid contracts and by eliminating the number of them in 2010, Uncle Sam hopes to create more competition to cut back costs and to help the independent contractors and small business owners gain more work.
Tuesday, May 12, 2009
Trimming the Fat – Proposed 2010 Budget Cuts
By now, everyone has thrown in their two cents on President Obama’s proposed budget for the 2010 fiscal year. Most brought up the point that while he plans to cut out $17 billion next year, the $3.2 trillion he spends this year will still hurt the country overall. Many of the articles available don’t dig deep enough to see what exactly President Obama removed from the budget for next year.
Upon opening the Termination, Reductions, and Savings report that the White House recently published online, I went straight to the government contracting section. I was interested to see how President Obama planned to reduce the contracting costs for the government for next year while increasing the opportunities for small businesses this year. The method that was chosen is decreasing the Department of Defense (DoD) budget by $0.9 billion.
While $0.9 billion may not sound like a lot considering the $787 billion Recovery Act recently passed, it will be next year. Unlike this year, the US won’t need another bill to help stimulate the economy. The money allocated from the Recovery act will still exist until August 2010, when the White House predicts that roughly 75% of the money will have been contracted out.
One of the reasons that the Obama administration selected budget cuts for the DoD and not another federal agency is that they are the largest part of the government that hires contractors. According to the Government Accountability Office (GAO), the DoD’s contract obligation spending increased 83% between the years 1998 and 2007. One government solution involves hiring 33,500 Federal civilian employees by 2015 to help complete jobs that the DoD outsourced. It is projected to save the US about 40% on contracting dollars per year.
Not all small business owners offer products that the DoD requires, so many won’t be affected by their decrease in contracts. However, if the efforts to redo the DoD contracting arena are successful, many agencies might follow suit and hire Federal civilians rather than outside contractors. An advantage of gaining work now means that once August 2010 has gone and Uncle Sam’s agencies start to reform their policies, those contractors who already have their foot in the door will be favored over others who joined the cause too late.
Upon opening the Termination, Reductions, and Savings report that the White House recently published online, I went straight to the government contracting section. I was interested to see how President Obama planned to reduce the contracting costs for the government for next year while increasing the opportunities for small businesses this year. The method that was chosen is decreasing the Department of Defense (DoD) budget by $0.9 billion.
While $0.9 billion may not sound like a lot considering the $787 billion Recovery Act recently passed, it will be next year. Unlike this year, the US won’t need another bill to help stimulate the economy. The money allocated from the Recovery act will still exist until August 2010, when the White House predicts that roughly 75% of the money will have been contracted out.
One of the reasons that the Obama administration selected budget cuts for the DoD and not another federal agency is that they are the largest part of the government that hires contractors. According to the Government Accountability Office (GAO), the DoD’s contract obligation spending increased 83% between the years 1998 and 2007. One government solution involves hiring 33,500 Federal civilian employees by 2015 to help complete jobs that the DoD outsourced. It is projected to save the US about 40% on contracting dollars per year.
Not all small business owners offer products that the DoD requires, so many won’t be affected by their decrease in contracts. However, if the efforts to redo the DoD contracting arena are successful, many agencies might follow suit and hire Federal civilians rather than outside contractors. An advantage of gaining work now means that once August 2010 has gone and Uncle Sam’s agencies start to reform their policies, those contractors who already have their foot in the door will be favored over others who joined the cause too late.
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