Mainebiz

V O L . X X I N O. X I V 36 FA C T BO O K / D O I N G B U S I N E S S I N M A I N E B U S I N E S S R E S O U R C E S Government contracts T he U.S. government is the largest single purchaser of goods and services in the world, buying everything from armored tanks to paper clips. Every year, the federal government awards more than $500 billion in contracts, and a significant share of those contracts are specifically allotted to small businesses. e SBA works with agencies to award at least 23% of all prime government contracts to small businesses, with specific statutory goals for small business, small disadvantaged businesses (SDB), businesses that are women-owned (WOSB) or service-disabled veteran-owned (SDVOSB), and businesses that are located in historically underutilized business zones (HUBZone firms). How government contracting works Sealed bidding vs. negotiation ere are two contracting methods the government uses to purchase goods and services, sealed bidding and negotiation. Sealed bidding: Sealed bidding in- volves the issuance of an invitation for bid by a procuring agency. Under the sealed bidding method, a contract is awarded to a responsible bidder whose bid, conforms to the require- ments of a solicitation (Invitation for Bids, or IFB) that will be most advan- tageous to the government, consider- ing only price and the price-related factors included in the IFB. Negotiation: Negotiation involves issuing a request for proposal (RFP) or request for quotation (RFQ). e business with the best proposal in terms of technical content, best value, price and other factors generally wins the contract. Types of contracts Firm fixed-price contracts Firm fixed-price contracts place the full responsibility for the costs and risk of loss on the contractor. Firm fixed-price contracts do not permit any adjustment on the basis of the contractor's costs during the perfor- mance of the contract. It provides maximum incentive for the contractor to control costs and perform effective- ly and imposes a minimum adminis- trative burden upon the contracting parties. is type of contract is used in all sealed bid and some negotiated procurements. Cost reimbursement contracts Cost reimbursement contracts provide for the payment of allowable costs in- curred by the contractor, to the extent stated in the contract. e contract establishes a ceiling price, above which a contractor may not exceed without the approval of the contract- ing officer. Cost reimbursement con- tracts are commonly used in research and development contracts. Small business set-asides A "set-aside" for small businesses reserves an acquisition exclusively for small business participation. is includes HUBZone Certified small businesses, SBA 8(a) Certified small businesses, Service-Disabled Veteran-Owned small businesses and Economically Disadvantaged/ Women-Owned small businesses in specific industries. ere are two ways in which set-asides can be de- termined. First, if an acquisition of goods or services has an anticipated dollar value of at least $3,000 but not exceeding $150,000, it is automati- cally reserved for small businesses. e acquisition will be set aside only if the contracting officer determines there are two or more responsible small businesses that are competitive in terms of prices, quality and delivery. Second, if an acquisition for goods or services is estimated at more than $150,000, and it is determined that offers will be obtained from two or more responsible small businesses, at a fair market price, the acquisition is reserved exclusively for small business participation. Reasonable expectations of small business competition may be evaluated using past acquisition his- tory of an item or similar items. ere are several exceptions and unique rules for specific kinds of small businesses and industries. For Research and Development (R&D) small business set-asides, there must be reasonable expectation of obtain- ing from small businesses the best scientific and technological sources consistent with the requirements of the proposed acquisition. For small business set-asides other than for services or construction services, any business proposing to furnish a product that it did not manufacture must furnish the product of a small business manufacturer unless the SBA has granted either a waiver or excep- tion to this requirement, referred to as the Non-manufacturer rule. In indus- tries where the SBA finds that there are no small business manufacturers, it may issue a waiver to the non-man- ufacturer rule. Waivers permit small businesses dealers or distributors to provide any domestic firm's product. Subcontracting To find subcontracting opportunities, a list of federal prime solicitations is listed under the U.S. Small Business Administration Subcontracting Network (SUBNET) web.sba.gov/subnet/ search/index.cfm and through the General Services Administration (GSA) at www.gsa.gov/portal/ content/101195 Subcontracting opportunities are a great resource for small businesses, especially for those not ready to bid as prime con- tractors. Experience gained from subcon- tracting with a federal prime contractor can better prepare businesses to bid for prime contracts. Current regulations stipulate that for contracts offering sub- contracting opportunities over $650,000 for goods and services, or $1.5 million for construction must offer the maximum practicable subcontracting opportunities to small businesses. In addition, poten- tial large business prime contractors must submit a subcontracting plan with their proposal describing how they will successfully maximize subcontracting opportunities to small businesses. Contracting programs HUBZONE For information, visit www.sba.gov/hubzone e Historically Underutilized Business Zones (HUBZone) program helps small businesses located in distressed urban and rural communities gain access to federal set-aside contracts and sole source contracts, as well as a price evaluation preference in full and open contract competitions. ere is a statutory goal that HUBZone small business concerns be awarded not less than 3% of the total value of all prime contract and subcontract awards. e HUBZone program also establishes preference for award of federal con- tracts to small businesses in these areas. To qualify for the program, a business (except those that are tribally-owned) must meet the following criteria: It must be a small business by SBA size standards; It must be owned and controlled at least 51 % by U.S. citizens, or a Community Development Corporation (CDC), an agricultur- al cooperative, or an Indian tribe; Its principal office must be located within a "Historically Underutilized Business Zone," which includes lands considered "Indian Country" and mili- tary facilities closed by the Base Realignment and Closure Act; At least 35 % of its employees must reside in a HUBZone. Women-Owned Small Business federal contract program For information, visit www.sba.gov/wosb e Women-Owned Small Business (WOSB) federal contract program authorizes contracting officers to set aside certain federal contracts for eligible women-owned businesses and economically disadvantaged women-owned small businesses in industries where it has be deter- mined WOSBs and EDWOSBs are underrepresented.. To be eligible, a firm must be at least 51% owned or controlled by one or more women. e women must be U.S. citizens and the WOSB or EDWOSB must be "small" under its

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