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Is SBA 8(a) program bad for our economy?


Guest Self Made Hispanic
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Guest Self Made Hispanic

While the intentions of the SBA 8(a) program were good, it may now be doing greater harm to those Small Business owners that do not qualify due to being born of European Caucasian decent or middle class family.

 

The SBA 8(a) program may hinder the best qualified business to gain government entitlements. In today's tough economic environment it is important to review whether the program is helping all American Small Businesses in need of help regardless of their ethnic origin.

 

SBA 8(a) program coverage extends only to socially and economically disadvantaged U.S. citizens, or those who have been lawfully admitted permanent U.S. residency. Individuals not mentioned in the Small Business Act may be considered on a case-by-case basis.

 

Individuals specifically mentioned include:

 

Black Americans

Hispanic Americans regardless of race, culture, or origin

Asian-Pacific Americans and Subcontinent Asian Americans

Native Americans including Native Hawaiians, Eskimos, Aleuts, and American Indians

 

Women are presumed to be included under the act because of social, and therefore, economic, disadvantages women encounter.

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Guest Jenny Grace

I think the 8A program is modeled incorrectly. You don't take away something from somebody to help somebody else. Corporations use minority people to get more government contracts. Passing more qualified businesses to bid a contract is not fair and open.

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  • 2 weeks later...

The SBA has a safe guard to protect small businesses with government contracts from being removed from their existing contract with the government if the 8 ( a ) program has an adverse effect on their business. Read below (there is a link at the bottom). I would also suggest contacting an attorney to see if your business meets these conditions.

 

 

13 C.F.R. 124.504( a )-( d )

 

SBA will not accept a procurement for award as an 8( a ) contract if the circumstances identified in paragraphs ( a ) through ( d ) of this section exist.

 

( a ) Reservation as small business set-aside, or HUBZone, service disabled veteran-owned small business, or women-owned small business award. The procuring activity issued a solicitation for or otherwise expressed publicly a clear intent to reserve the procurement as a small business set-aside, or a HUBZone, service disabled veteran-owned small business, or women-owned small business award prior to offering the requirement to SBA for award as an 8( a ) contract. The AA/BD may permit the acceptance of the requirement, however, under extraordinary circumstances.

Example to paragraph (a). SBA may accept a requirement where a procuring activity made a decision to offer the requirement to the 8( a ) BD program before the solicitation was sent out and the procuring activity acknowledges and documents that the solicitation was in error.

( b ) Competition prior to offer and acceptance. The procuring activity competed a requirement among Participants prior to offering the requirement to SBA and receiving SBA's formal acceptance of the requirement.

( 1 ) Any competition conducted without first obtaining SBA's formal acceptance of the procurement for the 8(a) BD program will not be considered an 8(a) competitive requirement.

( 2 ) SBA may accept the requirement for the 8(a) BD program as a competitive 8(a) requirement, but only if the procuring activity agrees to resolicit the requirement using appropriate competitive 8(a) procedures.

( c ) Adverse impact. SBA has made a written determination that acceptance of the procurement for 8( a ) award would have an adverse impact on an individual small business, a group of small businesses located in a specific geographical location, or other small business programs. The adverse impact concept is designed to protect small business concerns which are performing Government contracts awarded outside the 8( a ) BD program, and does not apply to follow-on or renewal 8(a) acquisitions. SBA will not consider adverse impact with respect to any requirement offered to the 8(a) program under Simplified Acquisition Procedures.

( 1 ) In determining whether the acceptance of a requirement would have an adverse impact on an individual small business, SBA will consider all relevant factors.

( i ) In connection with a specific small business, SBA presumes adverse impact to exist where:

( A ) The small business concern has performed the specific requirement for at least 24 months;

( B ) The small business is performing the requirement at the time it is offered to the 8(a) BD program, or its performance of the requirement ended within 30 days of the procuring activity's offer of the requirement to the 8( a ) BD program; and

( C ) The dollar value of the requirement that the small business is or was performing is 25 percent or more of its most recent annual gross sales (including those of its affiliates). For a multi-year requirement, the dollar value of the last 12 months of the requirement will be used to determine whether a small business would be adversely affected by SBA's acceptance.

( ii ) Except as provided in paragraph ( c )( 2 ) of this section, adverse impact does not apply to "new" requirements. A new requirement is one which has not been previously procured by the relevant procuring activity.

( A ) Where a requirement is new, no small business could have previously performed the requirement and, thus, SBA's acceptance of the requirement for the 8( a ) BD program will not adversely impact any small business.

( B ) Construction contracts, by their very nature (e.g., the building of a specific structure), are deemed new requirements.

( C ) The expansion or modification of an existing requirement will be considered a new requirement where the magnitude of change is significant enough to cause a price adjustment of at least 25 percent (adjusted for inflation) or to require significant additional or different types of capabilities or work.

( D ) SBA need not perform an impact determination where a new requirement is offered to the 8( a ) BD program.

( 2 ) In determining whether the acceptance of a requirement would have an adverse impact on a group of small businesses, SBA will consider the effects of combining or consolidating various requirements being performed by two or more small business concerns into a single contract which would be considered a "new" requirement as compared to any of the previous smaller requirements. SBA may find adverse impact to exist if one of the existing small business contractors meets the presumption set forth in paragraph ( c )( 1 )( i ) of this section.

(3) In determining whether the acceptance of a requirement would have an adverse impact on other small business programs, SBA will consider all relevant factors, including but not limited to, the number and value of contracts in the subject industry reserved for the 8( a ) BD program as compared with other small business programs.

( d ) Release for non-8( a ) competition. ( 1 ) Except as set forth in ( d )( 4 ) of this section, where a procurement is awarded as an 8( a ) contract, its follow-on or renewable acquisition must remain in the 8(a) BD program unless SBA agrees to release it for non-8(a) competition. If a procuring agency would like to fulfill a follow-on or renewable acquisition outside of the 8( a ) BD program, it must make a written request to and receive the concurrence of the AA/BD to do so. In determining whether to release a requirement from the 8( a ) BD program, SBA will consider:

( i ) Whether the agency has achieved its SDB goal;

( ii ) Where the agency is in achieving its HUBZone, SDVO, WOSB, or small business goal, as appropriate; and

( iii ) Whether the requirement is critical to the business development of the 8(a) Participant that is currently performing it.

( 2 ) SBA may decline to accept the offer of a follow-on or renewable 8(a) acquisition in order to give a concern previously awarded the contract that is leaving or has left the 8( a ) BD program the opportunity to compete for the requirement outside of the 8(a) BD program.

( i ) SBA will consider release under paragraph (2) only where:

( A ) The procurement awarded through the 8( a ) BD program is being or was performed by either a Participant whose program term will expire prior to contract completion, or by a former Participant whose program term expired within one year of the date of the offering letter;

( B ) The concern requests in writing that SBA decline to accept the offer prior to SBA's acceptance of the requirement for award as an 8(a) contract; and

( C ) The concern qualifies as a small business for the requirement now offered to the 8( a ) BD program.

( ii ) In considering release under paragraph (2), SBA will balance the importance of the requirement to the concern's business development needs against the business development needs of other Participants that are qualified to perform the requirement. This determination will include consideration of whether rejection of the requirement would seriously reduce the pool of similar types of contracts available for award as 8(a) contracts. SBA will also seek the views of the procuring agency.

( 3 ) SBA will release a requirement under this paragraph only where the procuring activity agrees to procure the requirement as a small business, HUBZone, SDVO small business, or WOSB set-aside.

( 4 ) The requirement that a follow-on procurement must be released from the 8(a) BD program in order for it to be fulfilled outside the 8(a) BD program does not apply to orders offered to and accepted for the 8( a ) BD program pursuant to §124.503(h).

 

http://edocket.acces...3cfr124.504.pdf

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If your small business if being adversely affected, request for a letter determination of finding from your contracting officer to answer your question.

 

Determinations and Findings (D&F) means a special form of written approval by an authorized official that is required by stature or regulation as a prerequisite to taking certain contracting actions. The "determination" is a conclusion or decision supported by the "findings." The findings are statements of fact or rationale essential to support the determination and must cover each requirement or the stature or regulation.

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I decided to call SBA to see if this information is correct. They agreed with sending out a letter of determination of findings from your contracting officer. I have also contacted Marie-Alice Denis, a public affairs officer at the GSA Office of Citizen Services and Communications. I asked whether GSA was aware of 13 C.F.R. 124.504 and what safeguards have been put into place to protect their contractors? Mrs Denis stated that she needed to speak with the Director and would get back with me in a few hours.

Edited by Luke_Wilbur
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Marie-Alice Denis wrote me back on this matter.

 

Hi Luke,

Thank you for your inquiry. Shaunta Johnson, one of our supervisory program analysts responded to your query.

 

The federal government has the legal right to place a re-compete or new opportunity that was once awarded to a small business in the 8a program. There are a few factors that may drive this decision such as the agency's 8a contract awards status against Small Business goals. Also, the contractor could have met a number of firms who marketed their services and he/she decided to take a different acquisition approach.

 

Contracting officers have a lot of latitude in determining the acquisition strategy for a new requirement. As long as there is ample market research (prior to solicitation issuance), coordination with the regional Small Business office, and formal documenting of the process in the contract file - it's allowed.

 

However, when a requirement is placed in the 8a Program, it typically stays there unless the agency gets permission from SBA to remove it.

 

Public Law 95-507 requires every federal agency (including DOD) to established annual small business goals, in dollar and percentages, for doing business with Small, Minority-Owned (including 8a), Woman-Owed, HubZone, and Service Disabled Veteran-Owned small businesses. These goals are negotiated annually based on agency budgets, past small business contract award performance, and anticipated contract awards for the upcoming fiscal year.

 

There is no legitimate argument that can prove that an 8a firm award negatively impacts any small business. It usually becomes a personal complaint from a business that thinks it should get the contract and can't compete because they aren't eligible for 8a certification. Many companies understand that one option for dealing with this reality is to establish a teaming arrangement or joint venture with a quality 8a firm so they can continue to participate in these types of contract opportunities.

 

For more information about GSA's Office of Small Business Utilization, please visit:

http://www.gsa.gov/p.../category/21015

 

If you have any follow up questions, please let me know. Please feel free to send us the link to your article once it has been published. Thank you.

 

Here is bio on Shaunta Johnson

 

Shaunta Johnson

U.S. General Services Administration

Shaunta Johnson serves as the Director of U.S. General Services Administration's (GSA), Small Business Utilization Center at the National Capital Region. She is responsible for promoting and assisting small, minority, and women-owned businesses interested in providing services and commodities to the Federal Government. Internally, she serves as the small business "advocate" within the Public Buildings Service and Federal Technology Service. Ms. Johnson meets with the senior executive leadership and the lead procurement officials on a monthly basis to develop new acquisition strategies that will afford small businesses an opportunity to provide services in areas where there participation has been minimal. Ms. Johnson is a sought after speaker for small business conferences and seminars locally and nationally. She’s developed a notable reputation as a GSA resource on small business programs, the GSA Multiple Awards Schedules Program and marketing strategies for successfully doing business with the Federal Government. During her tenure within GSA, Ms. Johnson has received numerous awards and recognitions for her support of small businesses. She continues to share here knowledge as an instructor at the George Mason University Procurement Technical Assistance Center (PTAC) as well as a facilitator for the Greater Washington Board of Trade Small Business seminars. Ms. Johnson works tirelessly as an advocate to increase procurement opportunities for small, minority, veteran, and women-owned businesses around the Washington, DC metropolitan area by hosting FREE GSA Schedules workshops, Small Business roundtables, procurement conferences and more. Shaunta is a 1999 graduate of the USDA’s Women’s Executive Leadership Program and received a Bachelor of Arts degree in Mass Media Arts from Hampton University, Hampton, Virginia.

Edited by Luke_Wilbur
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