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Small Business Resource Guide -
Chapter 4 -
General Contracting Information

- -
 Information by State
 Print version
 -   Go back to the Small Business Resource Guide Main Index
 -   Regulations Governing Contracts and Acquisitions
 -   Federal Business Opportunities (FBO)
 -   Phoenix System
 -   Contracting Opportunities Information
 -   Types of Contracts
 -   Subcontracting Opportunities

Regulations Governing Contracts and Acquisitions

Departmental acquisition activities are governed by the Federal Acquisition Regulations (FAR) and the HUD Acquisition Regulation (HUDAR). The FAR is codified as Chapter 1 of Title 48, Code of Federal Regulations. The FAR implements various statutes and regulations, such as those dealing with small business and fair labor practices, which impact upon the contracting process. The HUDAR implements and supplements the FAR and is codified as Chapter 24 of Title 48, Code of Federal Regulations. The objectives of the regulations are to: ensure efficient and cost effective expenditures of government funds, optimize the opportunity for attainment of program objectives, obtain adequate and effective competition in acquisitions, assure impartial, equitable, and thorough evaluation of bids and proposals, select the best proposals, negotiate fair and reasonable contracts, and achieve effective administration of contracts.

Any firm wishing to do business with HUD should have ready access to the FAR and HUDAR . The FAR is accessible on the Internet at: http://www.arnet.gov/far Paper copies may be purchased from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C., 20402, telephone (202) 512-1800. The HUDAR is available on HUD's contracting web site at http://www.hud.gov/offices/cpo/hudar.cfm.

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Contracting Opportunities Information

Federal Business Opportunities (FBO) – Reference FAR Subpart 5.2

The Federal Business Opportunities (FBO) is the public medium by which U.S. Government agencies, including HUD, identify proposed contract actions and contract awards. At the FBO web site government buyers publicize their business opportunities and commercial vendors seeking Federal markets for products and services can search, monitor and retrieve opportunities solicited by the entire Federal contracting community. The FBO affords companies the opportunity to selectively and efficiently participate in the contracting process with vendor notification. Visit the web site at www.fedbizopps.gov and sign up to receive procurement announcements by e-mail. Note that contracting officers need not comply with publication requirements when exemptions detailed in the FAR, parts 5.202(a)(1), (a)(4) through (a)(9), or (a)(11) apply, or when oral or electronic solicitations are used. A few examples of advertisement exemptions include contract actions from unsolicited proposals, statutorily mandated programs such as, purchases from the blind or severely handicapped, Section 8(a) awards, and purchases made under unusual and compelling urgency.

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Phoenix System at the Minority Business Development Agency (MBDA)

An easy way to monitor contractual opportunities is available through the Minority Business Development Agency OMBDA) of the Department of Commerce. Registering at the MBDA web site, www.mbda.gov, gives access to several tools and services including, a Resource Locator, Business Plan Write, and Phoenix system. The Phoenix system matches minority-owned firms’ products and services with upcoming federal and non-federal requirements and notifies firms of the opportunity by e-mail or fax.

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Contracting Opportunities Information

HUD contracting offices are no longer maintaining a bidders list. Instead, all HUD contracting opportunities expected to exceed $25,000 are posted on HUD's web page at the following URL:


While most of HUD's contracting opportunities are advertised in FedBizOpps prior to solicitation, prospective contractors are encouraged to develop a general awareness of HUD's program and acquisition requirements. The Department, like most Federal agencies, publishes its annual procurement forecast which announces anticipated contracting opportunities for that fiscal year. The Procurement Forecast is available via the Internet at the contracting home page. The forecast will indicate if a procurement will be 8(a), small business set-aside, HUBZone set-aside or full and open competition. Contracting website information is updated daily.

Subscription to the FedBizOpps "Vendor Notification Service"

This free subscription service is provided by FedBizOpps to give you information about Governmentwide contracting opportunities. As a subscriber to this mailing list, you will automatically receive a daily email notification whenever new solicitations and amendments are posted to FedBizOpps. To subscribe to the FedBizOpps "Vendor Notification Service", go to: http://www.fedbizopps.gov/EPSVendorRegistration.html

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Types of Contracts

Contracts are generally grouped into two broad categories: fixed-price contracts and cost-reimbursement contracts. Variations on these two broad categories range from firm fixed-price, in which the contractor has full responsibility for the performance costs and resulting profit, to cost-plus-fixed-fee, in which the contractor has minimal responsibility for the performance costs and the negotiated fee (profit) is fixed. In between these extremes are various incentive contracts, tailored to the uncertainties involved in contract performance. Contract types are discussed in detail in the FAR, Part 16.

If the procurement is a "sealed bid," only two types of contracts can be used: (1) firm fixed-price, or (2) fixed-price with economic price adjustment.

If the procurement is "negotiated," the contracting officer is allowed considerable latitude in selecting the appropriate contract type. Two primary factors that will be considered are: (1) the amount of responsibility placed on the contractor and (2) the amount and nature of profit incentive offered to the contractor for achieving or exceeding specified standards or goals. Purchase orders are often used for simplified acquisitions. A purchase order is actually an offer from the government to buy something from a vendor, typically in response to an oral quotation or a written request for a quotation. It is not a binding contract unless the vendor accepts the order in writing or performs the required work. The purchase order spells out everything the Government and the vendor must know to complete a transaction. This includes the products or services required, their prices, when and where they are to be delivered, the originating and billing offices, contract and acquisition numbers, and other relevant information.

Purchases Under $2,500.

Purchases under $2,500 are referred to as "micro-purchases". Micro-purchases may be made by using the governmentwide commercial purchase card. Micro-purchases are unique in that they may be awarded without soliciting competitive quotations, as long as (1) the contracting officer considers the price to be reasonable and (2) to the extent practicable, the micro-purchases are distributed equitably among qualified suppliers.

Accepting a government-wide commercial purchase card makes getting paid quick and easy.

Marketing Tip: Since the Federal government's use of credit cards is increasing both in volume and thresholds, make sure your firm accepts credit card purchases. The Federal government charge card program is know as "GSA SMARTPAY". If your company already accepts charge cards, no additional steps are necessary. If not, contact a local bank or a GSA SMARTPAY contractor (American Express (800) 686-5493 ext. 7991, Citibank (888) 241-1514, First National Bank of Chicago (312) 732-7828, Nations Bank (800) 999-5189 ext. 7991, Mellon Bank (800) 424-3004, or US Bank (800) 408-0101). Information is also available from GSA at http://www.pub.fss.gsa.gov./services/gsa-smartpay.

Vendors who accept credit card purchases are paid earlier than other payment options that come under the Prompt Payment Act. The Government-wide commercial purchase card contractor guarantees payment and the vendor does not have to prepare a paper invoice.

Purchases Between $2,500 and $24,999

Purchases worth from $2,500 to $24,999 generally are handled in one of two ways. The first is through quotations. The contracting office may solicit oral quotations from potential suppliers. The second option is written quotations. The contracting office normally solicits written quotations through Standard Form 18: Request for Quotation. This procedure is generally used if unusual specifications or a large number of different items are involved or if oral quotes are otherwise impractical.

Purchases Between $25,000 and $100,000

Purchases between $25,000 and $100,000 are reserved for exclusive participation of small businesses if the contracting officer is able to obtain offers from two or more small businesses that are competitive with regard to price, quality, and delivery.

Purchases Over $100,000

Purchases over $100,000 are generally full and open competition contracts unless the contracting officer determines that a set-aside for small, 8(a) or HUBZone businesses is appropriate.

Federal Supply Schedule (Reference FAR Subpart 8.4)

Prior to initiating acquisitions from commercial sources, the Contracting Officer must determine whether or not the required supplies or services are available from a Federal Supply Schedule established by the General Services Administration (GSA) or as a common stock item at a GSA supply depot. Federal agencies' use of schedule purchases has been increasing geometrically over the past few years and there is no dollar limit associated with an agency's purchases. Since all prices are negotiated with GSA, an agency's contracting officers have the discretion of selecting the products or services which best fit their agency's needs and are encouraged to look for small businesses when purchasing from the schedule. Firms interested in doing business as a Federal Supply Services contractor should contact the Washington DC Area GSA Business Service Center at (703) 305-5600.

Marketing Tip: If you are not already on the General Service Administration's (GSA) Federal Supply Schedule (FSS), apply to get on the schedule since the federal agencies' use of the schedule for purchases is increasing. To keep current on FSS information or determine if you potentially qualify to apply as a GSA schedule contractor, call GSA at (703) 305-5600 or access the homepage at http://www.fss.gsa.gov.

Blanket Purchase Agreements

A blanket purchase agreement (BPA) is an agreement between the Government and a supplier allowing repetitive purchases during a specified period. If a Government office is going to make several purchases of a product or service, a contracting office may write a BPA.

This procedure cuts down on paper-work and speeds up procurement. A contracting officer usually issues BPAs to a number of different suppliers for the same types of products or services. This gives Government offices greater flexibility and choice in making their purchases.

Government Wide Acquisition Contracts (GWAC)

A GWAC refers to a contract awarded by a particular federal agency for a particular product or service such as systems engineering. Other federal agencies are able to use the existing contract for products or services within the parameters of the statement-of-work by transferring funds to the host agency. There are several advantages to using GWACs. It saves time since the competition phase of the procurement has already been satisfied; GWACs' fee structure can be less than those charged under the GSA schedule; and an agency can receive credit for contracts it awards to small, minority and women-owned businesses.

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Subcontracting Opportunities

A good way to gain experience and establish a past performance record is to become a subcontractor to current government prime contractors. As a subcontractor, you will learn more about federal contracting policies and procedures, make valuable contacts and increase your skills in marketing to the federal government.

Public Law 915-507 requires that all prime contracts over $500,000 awarded to large businesses have a subcontracting plan which makes maximum use of small businesses as subcontractors. Prior to contract award, HUD and the prime contractor negotiate subcontracting goals for each of the small business categories. Small businesses are encouraged to identify their capabilities to major prime contractors who identify a subcontracting plan administrator. Firms interested in subcontracting opportunities can send company capability statements to and meet with the subcontract plan administrator. A listing of HUD prime contractors who offer subcontracting opportunities is available at the following URL: http://www.hud.gov/offices/cpo/primes.cfm.

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