Preparing your Small Business for the Federal Market ... Small Disadvantaged Businesses (SDB)...

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Transcript of Preparing your Small Business for the Federal Market ... Small Disadvantaged Businesses (SDB)...

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    Preparing your Small Business

    for the Federal Market

    Presented by: Karen Williams, Certified Mentor, DC SCORE

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    With SCORE, You Are Not Alone on Your Journey

    For over 50 years, SCORE has served

    as America’s premier source of free

    business mentoring and education.

    As a resource partner of the U.S.

    Small Business Administration (SBA),

    SCORE has helped more than 11

    million entrepreneurs through

    mentoring, workshops and educational

    resources since 1964.

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    SCORE Can Help You Find the Way Ahead

    • Free one-on-one business counseling

    and mentoring

    • Business advisory services

    • Low cost local workshops

    • Free templates and recorded


    To meet with a mentor or learn more

    about SCORE’s resources, visit

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    Today’s Session Objectives

    • Develop an understanding of the reasons to consider selling to the

    Federal Government market

    • Develop an understanding of the different types of Federal

    Government certifications

    • Determine if you qualify

    • Steps to Sell to the Government

    • Market Research – how to do it; why is it important

    • Subcontracting Strategies

    • Next Steps – find out how to move forward

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    Government Contracting

    • The U.S. Government is the largest buyer in the world, outsourcing

    $400B - $500B annually on products and services

    • 40% spent on products; 60% on services

    • Less than 5% of the businesses in the United States do business with

    the U.S. Government

    • Approximately $1 billion in new opportunities are available to be bid

    on by private businesses every day

    • The Federal Government signs over 10 million contracts a year

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    Government Contracting (cont.)

    • Companies are awarded new contracts daily

    • Approximately 95% of federal contracts are awarded to small and

    medium-sized businesses

    • The U.S. Government procures everything from armored vehicles

    and cutting-edge scientific research, to paper clips and super


    • A significant share of those contracts are specifically available for

    award to small businesses

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    What Can a Federal Contract Do for Your Business?

    • What a Government Contract can do for your business:

    • Diversify your customer base

    • Cover overhead/G&A costs

    • Even out cash flow

    • What a Government Contract cannot do for your business:

    • Jump-start your business

    • Save your business

    • Be the sole source of your business (especially for start ups)

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    Benefits of Contracting with the Federal Government

    • You get paid regularly

    • Your client won’t move away, run away, hide and/or not pay their bills

    - you will get paid!

    • Government contracting allows businesses, many small and mid-sized

    businesses, to have a bevy of profitable, long-term contracts

    • The high profile your company achieves as a result of Government

    contracts can be a good advertising tool for your firm

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    SBA Small Business Certifications

    Provided by SBA - For more information go to

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    Contracting Goals


    Small Businesses: 23%

    SDVOSB: 3%

    SDB: 5%

    WOSB: 5%

    HUBZone: 3%

    $500 Billion per


    U.S. Government: The World’s Largest Customer

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    Small Business Prime and Subcontracting

    • Prime contracting is where you have a direct contract with the

    Federal Government

    • Subcontracting is where you have a contract with a Prime contractor

    • Large Businesses may have small business subcontracting goals for

    large contracts – approximately $80 billion/year in opportunities

    • SBA Procurement Center Representatives (PCRs) advocate for small

    businesses at buying activities, along with Agency’s Office of Small and

    Disadvantaged Business Utilization

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    What is a Small Business?

    • The SBA defines a "small business" either in terms of the average number of

    employees over the past 12 months, or average annual receipts over the past

    three years. SBA defines a U.S. small business as a concern that:

    • Is organized for profit

    • Has a place of business in the U.S.

    • Operates primarily within the U.S. or makes a significant contribution to

    the U.S. economy through payment of taxes or use of American

    products, materials, or labor

    • Is independently owned and operated

    • Is not dominant in its field on a national basis

    • The business may be a sole proprietorship, partnership, corporation, or any other

    legal form. In determining what constitutes a small business, the definition will vary

    to reflect industry differences, such as size standards.

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    SBA Size Standards

    • Manufacturing 500 to 1,500 employees

    • Non-manufacturers 500 employees

    • Servicing $7.5 Million/ $38.5 Million

    • Construction $7 Million/ $36.5 Million

    • Agriculture $750,000/ $27.5 Million

    Size Standards are based on NAICS (North American Industry

    Classification System) Codes

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    Types of Federal Contracting Certifications

    • Self-Certified:

    • Small Businesses

    • Small Disadvantaged Businesses (SDB)

    • Service Disabled Veteran-Owned Small Businesses (SDVOSB)

    • Women-Owned Small Businesses (WOSB)

    • (Self-certified, but must upload documents to SBA portal or be 3rd-

    Party certified)

    • SBA-Certified:

    • Historically Underutilized Business Zones (HUBZones)

    • 8(a) Business Development Program

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    Small Disadvantaged Businesses (SDB) Eligibility Criteria

    • Since October 2008, small businesses can self-represent their status

    as a small disadvantaged business (SDB)

    • To self-represent as an SDB, register your business in the System for

    Award Management (SAM). However, you and your firm must still

    understand the SBA eligibility criteria for SDBs:

    • The firm must be 51% or more owned and controlled by one or more

    disadvantaged persons

    • The disadvantaged person or persons must be socially disadvantaged

    and economically disadvantaged

    • The firm must be small, according to SBA’s size standards


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    Service-Disabled Veteran-Owned Small Business

    • Must self certify in SAM

    • The Service Disabled Veteran (SDV) must have a service-connected

    disability that has been determined by the Department of Veterans

    Affairs or Department of Defense

    • The SDVOSBC must be small under the NAICS code assigned to the


    • The SDV must unconditionally own 51% of the SDVOSBC

    • The SDV must control the management and daily operations of the



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    Service-Disabled Veteran-Owned Small Business (cont.)

    • The SDV must hold the highest officer position in the SDVOSBC

    • The SDVOSB is eligible for Set Asides and Limited Sole Source


    • For Department of Veterans Affairs (VA) procurements, firm must be

    certified by the VA

    • Vets First Verification Program


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    Women-Owned Small Business Program

    • Firm must meet the small business size standard for the contract and

    be at least 51% unconditionally and directly owned by women who

    are U.S. citizens

    • Woman (or women) must manage the day-to-day operations on a

    full-time basis

    • A woman must the hold highest officer position in the business

    • Personal net worth (assets minus liabilities) is less than $750,000 for



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    Women-Owned Small Business Program (cont.)

    • Set-asides and limited sole source awards are permitted

    • The set aside or sole source procurement must be in the industries

    designated by SBA as underrepresented or substantially underrepresented.

    SBA has designated six-digit NAICS codes to denote the industries where

    WOSBs are underrepresented or substantially underrepresented. Current

    list of six-digit 2017 NAICS codes eligible for use under the WOSB Program

    may be viewed at the link below.


    • 364 six-digit NAICS indust