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Small Business Resource Guide -
Chapter 5 -
Small Business Programs

- -
 Information by State
 Print version
 
 -   Go back to the Small Business Resource Guide Main Index
 -   Procurement Preference Program Goaling
 -   Small Business Set-Aside Program
 -   The 8(a) Program
 -   Women-Owned Small Business Program
 -   Small Disadvantaged Business Program
 -   Historically Underutilized Business Zone (HUBZone) Program
 -   Veteran-owned Small Businesses
 -   Small Business Procurement Procedures Order of Consideration
 -   Small Business Administration Efforts
 -   Central Contractor Registration (CCR)




HUD, like all Federal agencies, establishes goals for awarding contracts to small, small disadvantaged, women owned small, HUBZone, and small businesses owned by service disabled veterans. To meet these goals, HUD uses "small business programs."

Most small business programs include outreach activities, both to inform small businesses about what HUD has to offer, and to help in locating and working with HUD procurement offices. Some small business programs also have "price-preferences", "evaluation credits" and "set-asides" under which certain contracts are reserved for competition among small businesses. These small business programs, which are described in the following sections, are among the Government's most effective ways of increasing the number of contracts awarded to small, small disadvantaged, women-owned small, HUBZone, and small businesses owned by service disabled veterans. Information concerning new small business programs may be found in the Federal Acquisition Regulation (FAR).

Marketing Tip: Determine if you are eligible for the participation in the Federal procurement preference programs and take full advantage of the benefits (e.g., become certified as a Section 8(a) firm, Small Disadvantaged Business (SDB) and/or HUBZone business and become eligible for restricted competition contracts, non-competitive contracts, and receive price preferences up to a maximum of ten percent, etc.).

Procurement Preference Program Goaling

Section 221 or Public Law 95-507 and Public Law 100-656, Section 502 and 503 require that the head of each Federal agency, after consultation with the U.S. Small Business Administration (SBA), establish realistic goals for the award of contracts to small business concerns and to small businesses owned and controlled by socially and economically disadvantaged individuals. Subsequent amendments to Public Law 95-507 set new government-wide goals and/or establish new procurement preference categories. The Federal Government encourages full participation in its contracting activities through small business programs for groups that otherwise might not be able to compete on equal terms with large businesses. See a summary of HUD's current small business contracting goals.

Small Business Set-Aside Program

Under this program, certain acquisitions are partially or totally set-aside for small businesses when there is a reasonable expectation that (1) offers will be obtained from at least two responsible small businesses and (2) awards will be made at fair market prices.

If the requirement has an anticipated contract value of $100,000 or less, simplified acquisition (e.g., limited publicizing, three quotations) procedures are used. Only small businesses are allowed to compete for these contracts. If the anticipated value exceeds $100,000, the requirement will be solicited under full and open competition contracting procedures unless the contracting officer determines that a set-aside is appropriate.

NOTE: A small business is a firm that is organized for profit, has a place of business in the United States, is not dominant in its field, and meets size standards and other criteria set by the Small Business Administration (SBA). Size standards vary from industry to industry. They are spelled out in SBA publications and reprinted in Part 19.102 of the Federal Acquisition Regulation (FAR) and are posted at the following URL http://www.sba.gov/library/lawroom.html.

The 8(a) Program

Section 8(a) of the Small Business Act empowers the Small Business Administration to enter into prime contracts with other Federal agencies for products and services. SBA then subcontracts the actual performance of the work to socially and economically disadvantaged small businesses that have been certified by SBA as eligible and competent to receive these contracts. The selection of an 8(a) subcontractor can be either on a sole source or a competitive basis. Contracts under $3 million ($5 million for construction contracts) are sole sourced. Contract in excess of $3 million ($5 million for construction contracts) are awarded competitively among 8(a) firms. SBA also offers managerial, technical and financial support to 8(a) firms.

The SBA made significant reforms to the 8(a) Business Development Program in 1998. In order to become more inclusive in program admission as opposed to primarily race/ethnicity-based admission, members of non-presumed disadvantaged groups may apply for Section 8(a) program admission by establishing a "preponderance" of social and economic disadvantaged evidence as opposed to "clear and convincing" evidence. The reform further emphasized the developmental and training aspect of the program by establishing a formal government-wide Mentor-protégé program and easing joint venture restrictions. Section 8(a) firms are permitted to team with other small businesses and Section 8(a) graduates, while still maintaining their 8(a) status when competing for government contracts. The reform also incorporated the monitoring of 8(a) contractors for "competitive mix" of contracts in order to increase the firm's competitiveness.

HUD is one of the federal agencies which has the authority to contract directly with 8(a) firms. This authority was delegated from SBA to HUD through a memorandum of understanding and both streamlines and further reduces administrative time required to award 8(a) contracts. For more information on the Section 8(a) Business Development Program, contact your area's nearest SBA office which are listed in Chapter 7 of this guide or visit SBA's web site at http://www.sba.gov/8abd/.

Women-Owned Small Business Program

OSDBU makes a special effort to advise women on contracting opportunities within the Department and to encourage their participation in procurement programs. Federal Agencies for both prime and subcontracting for WOSBs. In December 2000, Congress passed PL 106-554 that authorizes limited competition for WOSBs at the contracting officers' discretion. The following summarize competitive requirements for WOSBs:

  • An expectation that two or more WOSBs are qualified and will compete for the procurement;
  • Contracts awarded only in industries where WOSBs are underrepresented.
  • WOSB owners must be economically disadvantaged unless award will be made in an industry in which WOSB are substantially underrepresented.
  • SBA Administrator has authority to determine those industries in which WOSB are substantially underrepresented, and waive economic disadvantage requirement.

Anticipated awards, including options are limited to $5M in manufacturing and $3M in other industries.

  • There is an expectation that contract award will be made at a fair and reasonable price.
  • Each of the competing WOSBs must be certified by a Federal, State or local certifying entity approved by SBA's Administrator, or self-certifies the C.O. that it is a small business owned and controlled by economically disadvantaged women and it provides adequate documentation, IAW SBA standards.
  • The SBA will conduct the required study to ascertain in which industries WOSBs are underrepresented and will define "underrepresented", "substantially underrepresented", and "economically disadvantaged".
  • The proposed regulations will be published in the Federal Register for public comment before final rules are adopted
  • For further information on the WOSB Program, visit the Small Business Administration web site at http://www.sba.gov, or http://www.womenBiz.gov

NOTE: A woman-owned small business is a small business that is at least 51 percent owned by a woman or women who are U.S. citizens. The woman or women must also control the management and daily operations of the business.

NOTE: The SBA Reauthorization Act of 2001 authorized the use of set-asides for SWOBs and the FAR 19.201 implements the policy.

Small Disadvantaged Business Program

As a means of ensuring small disadvantaged businesses (SDB) the maximum practicable opportunity to compete for and receive Federal procurement opportunities, small businesses certified as small disadvantaged businesses can receive up to a 10-percent price preference or evaluation credit when competing for certain procurements as determined by the U.S. Department of Commerce. The Department of Commerce determines which industrial categories are eligible for the SDB contract price preference (currently 10%) and evaluation credits. All Section 8(a) Business Development participants are automatically certified as SDBs. Businesses seeking certification can be classified as disadvantaged under the Section 8(a) criteria (e.g., presumed racial/ethnic groups) or by a preponderance of disadvantaged evidence on a case-by-case basis. Applicants can either submit their application for certification to the SBA or to private certifiers. For more information on the SDB program or a listing of private certifiers, contact SBA's SDB Office at (202) 401-1850 or visit SBA's website at http://www.sba.gov/sdb.

NOTE: A small disadvantaged business is a small business that is at least 51 percent owned by one or more socially and economically disadvantaged individuals or stockholders. One or more disadvantaged individuals must also control the management and daily operations. African Americans, Hispanic Americans, Native Americans, Asian Indian and Asian Pacific Americans are groups that may qualify; however, the SBA is authorized to determine others who qualify for disadvantaged status on a case-by-case basis. FAR 19.001 provides a more detailed definition of an SDB. The Small Business Administration now requires businesses seeking "small disadvantaged business" status to undergo a certification process with the SBA. This new certification process will categorize a small business as "disadvantaged" only if an SBA review finds the firm to be disadvantaged. Companies participating in SBA's 8(a) Business Development Program are already considered SDBs and will not be required to undergo a second review.

Historically Underutilized Business Zone (HUBZone) Program

The HUBZone Act of 1997, Title VI of Public Law 105135, created the HUBZone Program. This program provides Federal contracting opportunities for certain qualified small business concerns located in economically distressed communities. The goal of the HUBZone Program is to provide federal contracting assistance for qualified small business concerns located in HUBZone areas in order to increase employment opportunities, stimulate capital investments in those areas, and empower communities through economic leveraging. HUDZone areas are determined by census tracks data including income levels, unemployment rates and Native American reservation boundaries. In order to qualify as a HUBZone business, the business must be small; owned by a US citizen; the principal office must be located in a HUBZone; and at least 35% of the employees must reside in a HUBZone. The SBA formally certifies firms as HUBZone businesses. HUBZone businesses can receive sole-source or set-aside federal contracts or receive a price preference up to 10% when competing for full and open competition procurements. For additional information on the HUBZone Program, or to find out if your business is located in a HUBZone, visit the SBA web site at the following internet address: http://www.sba.gov/hubzone.

NOTE: HUBZone small businesses must be 100 percent owned and controlled by U.S. citizens, and the firm must have its principal office in the HUBZone. The principal office must be the location where the greatest number of the company's employees works at any one location. At least 35 percent of the small business's employees must reside in a HUBZone. The HUBZone program is race, ethnicity and gender neutral.

Veteran-owned Small Businesses

Public Law 106.50, the Veterans Entrepreneurship and Small Business Development Act of 1999, amended the Small Business Act by adding Small Businesses owned and controlled by service-disabled veterans to the categories of small businesses for which the federal agencies develop prime contract goals. Federal agencies also establish best effort goals and collect data regarding prime contract and subcontract awards to veteran-owned small businesses. For more information on the service-disabled veteran or veteran-owned small business programs, contact the SBA's Office of Government Contracting at (202) 205-6460, visit SBA's web site at http://www.sba.gov/vets or visit the Department of Veteran Affairs's web site at http://www.va.gov.

NOTE: Veteran-owned small business concern means a small business concern, not less than 51 percent of which is owned by and managed by a veteran who served in the active military, naval, or air service, and who was discharged or released there from under conditions other than dishonorable, or in the case of any publicly owned business, not less than 51 percent of the stock of which is owned and managed on a daily basis by one or more veterans.

Veteran - A person who served in the active military, naval, or air service, for at least 24 months and who was discharged or released under conditions other than dishonorable 38 CFR 3.12a(i). Service-disabled veteran-owned small business - A small business concern, which is not less than 51 percent owned and managed by a service-connected disabled veteran(s) or any publicly owned small business, not less than 51 percent of the stock of which is owned by one or more service-disabled veterans.

Service-disabled veteran as defined in 38 USC 101(2), The term "service-connected" means, with respect to disability that such disability was incurred or aggravated in the line of duty in the active military, naval, or air service.

Small Business Procurement Procedures Order of Consideration
(Developed by Kevin Boshears, OSDBU Director, Department of Treasury)

Note: This chart is a recommended order of consideration based on FAR Part 19.800(e) and guidance from the Small Business Administration. This information is applicable after the use of mandatory sources cited in FAR Part 8, and the consideration of pre-existing contract vehicles such as the GSA Federal Supply Schedule and Government-wide acquisition vehicles.

Dollar Amount Category Small Business Involvement
N/A Required Sources of Supplies and Services (see FAR Part 8):Supplies:-agency inventories-excess from otheragencies-Federal Prison Industries, Inc.-products available from the Committee for Purchase From People Who Are Blind or Severely Disabled-wholesale supply sources (see FAR 8.001)-mandatory Federal Supply Schedules-optional use Federal Supply Schedules-commercial sources

optional use Federal Supply Schedules (see FAR 8.4 and www.fss.gsa.gov). When considering schedule contractors, place orders with the firm than can provide the supply or service representing the best value. When conducting evaluations and before placing an order, considering including, if available, one or more small, women-owned small, and/or small disadvantaged business schedule contractors (including HUBZone, veteran owned, and service disabled veteran owned small businesses). Orders placed against the schedules may be counted credited toward the ordering agency's small business goals.

optional use Department-wide and Government-wide acquisition vehicles. When considering these vehicles, consider small businesses (of all types) that can meet the acquisition objectives using the optional use Federal Supply Schedule guidelines at FAR 8.4.

N/A

Required Sources of Supplies and Services (see FAR Part 8):Services:-services available from the Committee for Purchase From People Who Are Blind or Severely Disabled-mandatory Federal Supply Schedules-optional use Federal Supply Schedules-Federal Prison Industries, Inc.

Other Considerations (see FAR 8.002):-public utility services-printing and related supplies-leased motor vehicles

optional use Federal Supply Schedules (see FAR 8.4 and www.fss.gsa.gov). When considering schedule contractors, place orders with the firm that provide the supply or service representing the best value. When conducting evaluations and before placing an order, considering including, if available, one or more small, women-owned small, and/or small disadvantaged business schedule contractors (including owned small businesses). Orders placed against the schedules may be counted credited toward the ordering agency's small business goals.

optional use Department-wide and Government-wide acquisition vehicles. When considering these vehicles, consider small businesses (of all types) hat can meet the acquisition objectives using the optional use Federal Supply Schedule guidelines at FAR 8.4.

$1 - $2,500 Micropurchases Typically done via government purchase card; no small business preference; therefore, encourage small business participation by identifying qualified small business concerns that accept the purchase card.
$2,501 - $25,000 Simplified Acquisition Procedures Typically not formally publicly advertised, reserved exclusively for small business participation of some kind:1) 8(a) Program with emphasis on HUBZone 8(a) concerns or
1) Small Business Competitiveness Demonstration Program (for participating agencies) - reserved for emerging small businesses if emerging small business "rule of 2" is met for four designated agency groups (construction, refuse systems, nonnuclear ship repair, and architectural and engineering services or
1) Very Small Business Set-Aside Program-reserved for very small businesses if very small business "rule of 2" is met
2) HUBZone Small Business Set-Aside Program(competitive)-reserved for HUBZone small businesses if HUBZone small business "rule of 2" is met (optional for procurements under $100,000)
3) Small Business Set-Aside Program reserved for small businesses if small business "rule of 2" is met
$25,001 - $50,000 Simplified Acquisition Procedures Typical publicly advertised (Commerce Business Daily); reserved exclusively for small business participation of some kind:
1) 8(a) Program with emphasis on HUBZone 8(a) concerns or
1) Small Business Competitiveness Demonstration Program (for participating agencies) - reserved for emerging small business if emerging small business "rule of 2" is met for one designated agency group (architectural and engineering services) or
1) Very Small Business Set-Aside Program - reserved for very small businesses if very small business "rule of 2" is met
2) HUBZone Small Business Set-Aside Program (competitive) - reserved for HUBZone small businesses if HUBZone "rule of 2" is met (optional for procurements under $100,000)
3) Small Business Set-Aside Program - reserved for small businesses if small business "rule of 2" is met (note: for participating agencies, a CBD waiver is permitted when acquiring services by soliciting 5 small businesses, to include one small disadvantaged business and one women-owned small business for procurements over $25,000 up to $100,000; this can be expanded to include HUBZone, veteran owned, and service disabled veteran owned small businesses)
$50,001 - $100,000 Simplified Acquisition Procedures Typical publicly advertised (Commerce Business Daily), reserved exclusively for small business participation of some kind:
1) 8(a) Program with emphasis on HUBZone 8(a) concerns
2) HUBZone Small Business Set-Aside Program (competitive) - reserved for HUBZone small businesses if HUBZone small business "rule of 2" is met (optional for procurements under $100,000)
3) Small Business Set-Aside Program - reserved for small businesses if small business "rule of 2" is met (note: for participating agencies, a CBD waiver is permitted when acquiring services by soliciting 5 small businesses, to include one small business for procurements over $25,000 up to $100,000; this can be expanded to include HUBZone, veteran owned, and service disabled veteran owned small business)
$100,001 - $500,000 Formal Contracting Procedures or Simplified Acquisition Procedures for commercial purchases up to $5,000,000 Typically publicly advertised (Commerce Business Daily)
1) 8(a) program with emphasis on HUBZone 8(a) concerns [general rule of thumb: up to $3,000,000 sole-source basis; over $3,000,000 ($5,000,000 for manufacturing)], use 8(a) program on competitive basis if 8(a) "rule of two" is met
2) HUBZone Small Business Set-Aside Program (competitive) - reserved for HUBZone small businesses if HUBZone "rule of 2" is met
3) HUBZone Small Business Sole-Source Program - reserved for a HUBZone small business if only one HUBZone small business can satisfy the requirement [threshold: up to $3,000,000 ($5,000,000 for manufacturing)]
4) Small Business Set-Aside Program - reserved for small businesses if small business "rule of 2" is met
5) Full and Open Competition (aka Unrestricted Competition) - if applicable, use price evaluation adjustment for small disadvantaged business concerns and price evaluation preference for HUBZone small business concerns
$500,000+ Formal Contracting Procedures or Simplified Acquisition Procedures for commercial purchases up to $5,000,000 Typically publicly advertised (Commerce Business Daily)
1) 8(a) Program with emphasis on HUBZone 8(a) concerns [general rule of thumb: up to $3,000,000 ($5,000,000 for manufacturing), use 8(a) program on sole-source basis; over $3,000,000 ($5,000,000 for manufacturing)], use 8(a) program on competitive basis of 8(a) "rule of 2" is met
2) HUBZone Small Business Set-Aside Program (competitive) - reserved for HUBZone small businesses if HUBZone "rule of 2" is met
3) HUBZone Small Business Sole-Source Program - reserved for a HUBZone small business if only one HUBZone small business can satisfy the requirement [threshold: up to $3,000,000 ($5,000,000 for manufacturing)]
4) Small Business Set-Aside Program - reserved for small businesses if small business "rule of 2" is met
5) Full and Open Competition (aka Unrestricted Competition) - if applicable, use price evaluation adjustment for small disadvantaged business concerns; and small disadvantaged business participation program with evaluation factor or subfactor [for procurements expected to exceed $500,000 ($1,000,000 for construction]; and price evaluation preference for HUBZone small business concerns; and consideration of the subcontracting plan as part of the solicitation evaluation criteria (see below)
$500,000+
($1,000,000+ for construction)
Subcontracting Contracts awarded to large businesses (when subcontracting possibilities exist) must have subcontracting plan for small, small disadvantaged business, woman-owned small business, HUBZone small, and veteran owned small business (which includes service disabled veteran owned business) participation

Remember: "Acquisition planning, without small business considerations, is incomplete."

Small Business Administration Efforts

The Small Business Administration is the Federal Government's advocate for small, disadvantaged, women-owned, HUBZone and service-related disabled veteran-owned businesses. It works closely with the contracting offices of HUD and other Federal agencies to develop policies and procedures that will increase contract awards to small businesses. SBA's Business Opportunity specialists work to increase procurement set-asides under the Section 8(a) Program. They maintain portfolios of eligible 8(a) firms; verify the technical, management, and financial capabilities of such firms; and monitor acquisitions to see if they are suitable for the 8(a) Program. SBA also certifies SDBs and HUBZone businesses, oversees Small Business Development Centers and conducts extensive outreach and provides training and guidance on small business topics. In addition, when federal agencies question whether a small business is capable of meeting contract requirements, the SBA Certificate of Competency (COC) Program provides an appeal procedure for a small business that faces rejection of a bid or offer for a Government contract. For additional information on other small business programs, view SBA's homepage at http://www.sbaonline.sba.gov.

Central Contractor Registration (CCR)

Central Contractor Registration is an integrated database of small businesses that want to do business with the government. The system integrates information formerly in Pro-Net and creates one portal for entering and searching small business sources. All of the search options and information that existed in Pro-Net are now found at the CCR Dynamc Small Business Search site. As of December 31, 2003, the CCR assumed all of Pro-Net’s search cabilities and functions and small business no longer need to manually register in both Pro-Net and CCR. Registration in CCR is a requirement for federal contracts. The CCR streamline federal acquisition by creating common integrated business processes for buyers and sellers in the federal marketplace. To register and/or learn more about the CCR, access its Internet site at www.ccr.gov/.

Marketing Tip: Federal agencies, state and local governments, the private sector, etc., now use the Central Contractor Registration to identify firms for their upcoming requirements. It is also used by large businesses to identify subcontractors, by other small business for teaming purposes, and by venture capitalists for potential investments. Registration in the CCR is a requirement for federal contracts.
 
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