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Monday, June 1, 2009

FEDERAL GOVERNMENT CONTRACTING SMALL BUSINESS SET ASIDE DESIGNATIONS

Many questions have recently been received at the "Linked In" and "SCORE" web sites regarding federal government contracting small business set aside designations. This article will explain the designation types and suggest the best ways to establish and use them in your business planning.

There are 7 major, small business set-aside designations in federal government contracting. Below is a listing of these designations, divided into two groups, Self-Certifying at the Central Contractor Registration (CCR) and those where government certification is required.

SELF CERTIFYING

1. Small Business - Established by North American Industry Classification (NAICS) Code for all categories of government business (Please download the "SBA Small Business Size Standards" at the "Box Net" Cubicle on the left margin of this web site for further information). Every federal procurement has a NAICS Code assigned to it and is registered on the below web site if it exceeds $25k:

http://www.fedbizopps.gov/

2. Minority Business Enterprise (MBE) - Self-Certifying at CCR and a good interim designation while an 8(a) application is in process for minority-owned companies

3. Woman-Owned Business - Applicable to Women-Owned Businesses only:


4. Veteran-Owned Business - Applicable to Veteran-Owned Businesses only

5. Disabled Veteran-Owned Business - Applicable to Disabled Veteran-Owned Businesses only

GOVERNMENT CERTIFICATION REQUIRED

6
. Small/Disadvantaged Business SBA 8(a) Program - Requires 2 years in business and a lengthy application process with the SBA at the following web site:

https://sba8a.symplicity.com/applicants/guide

7. Historically Under-Utilized Business (HUB) Zone Located - Pertains to small businesses located in geographic areas with a historical record of low government contracting. This designation requires application at the following HUB Zone Site Web Site:

https://eweb1sp.sba.gov/hubzone/internet/index.cfm


QUALIFICATIONS, REGISTRATION, CERTIFICATIONS AND REPRESENTATIONS

To qualify as a small business for a given solicitation an enterprise must have registered at the CCR under the applicable NAICS code for the procurement and meet the SBA eligibility size standards for that code.

A small business also certifying under items 2-5 and 6 above must have individuals qualifying for the designation with at least 51% ownership interest and an operating role in the company. 60% is recommended to avoid the appearance of a front. Silent partners and investors without qualifying status or an operating role in the firm do not count toward the designation. It is suggested that ownership interest be specified by name in the articles of incorporation with the state and by % of ownership in an operating agreement.

To qualify as a HUB Zone Enterprise the business must be located in a HUB Zone and a qualifying percentage of the members (owners or employees) of the business must also live in the appliable HUB Zone.

The CCR Registration Web site is at:

http://www.ccr.gov/

For instructions on registration at the CCR please see the following link:

http://www.smalltofeds.com/2006/12/registering-your-small-business-for.html

The Annual On-line Certifications and Representations (ORCA) form must also be completed at the following link to bid federal government jobs:

https://orca.bpn.gov/

Your latest ORCA Certification should be printed out, signed and included with all federal government contract proposals.

SUMMARY

Carefully select your small business designations when preparing your business and marketing plans for federal government contracting. Keep in mind that self-certifications are verified through records checks and site visits by contracting officers, DCMAO and Source Selection Boards for federal procurements before contract awards are made.

A small business set-aside designation can be a valuable tool if adequately documented, registered, certified and prudently used for bidding work that your enterprise is capable of performing successfully.

3 comments:

Duane Taylor said...

I am trying to find out what the qualifications are to participate in the SBIR specifically is their a revenue qualification limit to participate or is it just the employee headcount?

Smalltofeds said...

North American Industrial Classification System (NAICS) Codes drive all federal procurements, including determination of eligibility based on revenue, headcount, or both.

You can download the SBA Small Business Size Standards document from the BoxNet Cube at this site in PDF format. If you are looking at an SBIR opportunity, note the NAICS assigned to it, look up the NAICS in the size standards publication and determine from that your eligibility

Scott Robinett said...

Ken,
great website, certainly helping us (maine sbdc) and our clients take the mistery our of government contracting.

Thanks.