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2024 Webinar Series
The FAR:
Federal Acquisition Regulations
Understand the rules of the federal contracting game - and play to win!
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
ABOUT THE SERIES:
 We’ll cover each PART of THE FAR
 Typically held Wednesdays and Fridays, 12pm
 Complimentary
 Recorded
 Video Posted on YouTube https://www.youtube.com/@jenniferschaus/videos
 PPT Posted on SlideShare.net
 Sponsor/Advertising Options Available
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
ABOUT US:
⮚ Services for FED GOV CONTRACTORS:
⮚ Washington DC based;
⮚ Professional services for established gov cons;
⮚ Market Analysis to GSA Schedules;
⮚ Contract Administration, etc.
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
ABOUT US:
⮚ Services for THOSE SELLING TO FED CONTRACTORS:
⮚ Newsletter Advertising;
⮚ Webinar Advertising;
⮚ Social Media Advertising;
⮚ Event Sponsorship;
⮚ Ask for our MEDIA KIT!
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
Get Help With DHS PACTS III
Contact Us:
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Our Sponsored Content Webinars
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SBIR / STTR
Unleashing Small Business Innovations:
A Path To Growth & Prosperity
https://attendee.gotowebinar.com/register/819675359822707801
Palmetier Law – Part 2 of 2 Thursday JUNE 27
SBIR / STTR
Unleashing Small Business Innovations:
A Path To Growth & Prosperity
https://attendee.gotowebinar.com/register/4351522212519190620
2024 Webinar Series - THE FAR
THANK YOU TO OUR WEBINAR SPONSORS
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
The FAR – Federal Acquisition Regulations - WEBINAR SERIES 2024
JSchaus & Associates – Washington DC – hello@JenniferSchaus.com
 Full training calendar: virginiaptac.org & useful links
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Matchmaking Conference
12TH ANNUAL NORTHERN VIRGINIA
B2G MATCHMAKING CONFERENCE
& SMALL BUSINESS EXPO
May 2, 2024 | 8:00 AM - 1:00 PM | Sheraton Reston Hotel
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2024 Webinar Series
THE FAR
THE FAR – PART 19
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
THE FAR – PART 19
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
FAR PART #19:
Small Business Program
SPEAKER: Zach Prince
FIRM: Haynes and Boone
EMAIL: Zach.Prince@haynesboone.com
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
Agenda
• Overview
• Small Business Programs
• Socioeconomic Small Business Programs
• Set-Asides and Sole Source
• Small Business Subcontracting Plans
• SBA Mentor-Protégé Program
• Size/Status Protests
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
Scope and Purpose
• To provide “maximum practicable opportunities” in government
procurement for small businesses, as well as VOSBs, SDVOSBs, HUBZone
small businesses, SDBs, and WOSBs.
• To provide opportunities for small businesses to subcontract through small
business subcontracting plans imposed on large businesses.
• To ensure that a fair proportion of contracts for supplies and services is
placed with small businesses.
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - OVERVIEW
2024 Webinar Series
THE FAR
• Goal: 23% of awards to small
business, subdivided
by SB category
• FY 2022: 26.5% of prime
contract dollars, $162.9 B
awarded to small businesses.
But continued trend of missing
targets for HUBZone, WOSB.
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - OVERVIEW
2024 Webinar Series
THE FAR
Penalties for Misrepresenting Size or Status
• Suspension or debarment
• Civil penalties under the False Claims Act; the Program Fraud Civil
Remedies Act; 13 CFR part 142.
• Criminal penalties for knowingly misrepresenting the small business
size status of a concern in connection with small business
procurement programs. 18 U.S.C §§ 287, 1001.
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
What Is a Small Business?
• Size Standards
• Affiliation
• Socioeconomic Status
• Limitations on Subcontracting
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
What Are Size Standards?
• NAICS Codes
o Employee-based
 Average number of people employed preceding 24 months
o Revenue-based
 Average annual receipts last 5 completed fiscal years*
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
What Is Affiliation?
• Employees or gross receipts of any affiliates count in assessment of a concern’s
business size.
• Primary test: the ability or power to control concern or when a third party has
the ability or power to control both
• Control can be affirmative or negative
• Control need not be exercised to create affiliation
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
Bases for Affiliation
• Stock Ownership
• Stock Options, Convertible
Securities, Agreements to
Merge
• Common Management
• Identity of Interest
• Newly Organized Concern
• Franchise and License
Agreements
• Ostensible Subcontractor
• Totality of the Circumstances
2024 Webinar Series
THE FAR
Bases for Affiliation
• Exceptions
o SBA Mentor-Protégé Program
o Qualifying Small Business Joint Ventures
o Indian Tribes, Alaska Native Corporations (ANCs), Native
Hawaiian Organizations (NHOs), Community Development
Corporations (CDCs)
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
Limitations on Subcontracting
• Applies to small/socioeconomic set-aside & sole-source contracts
• Different formulas for products, services, construction
• Exclusion for subcontracts to similarly-situated entities
• Non-Manufacturer Rule
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
What are the Limitations on Subcontracting?
• Supplies - cannot subcontract more than 50%, excl. materials.*
• Services - cannot subcontract more than 50%.*
• Construction - cannot subcontract more than 85%, excl. materials.*
*Based on total price Government paid for performance (with similarly-situated
entities excluded).
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
When Is Size Recertification Required?
• A firm that represented itself as a small business before contract
award must recertify its status as a result of:
o Fifth year of a “long-term” contract
o Merger, sale, acquisition, or novation (including 180-Day Rule)
o CO requires for task order
o Orders set aside for small businesses under unrestricted MACs
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 - SMALL BUSINESS PROGRAMS
2024 Webinar Series
THE FAR
What Socioeconomic Programs Are Available?
• 8(a) Business Development Program
• Veteran-Owned Small Business (VOSB)/ Service-Disabled Veteran-
Owned (SDVOSB) Programs
• HUBZone Program
• Woman-Owned Small Business (WOSB) Program
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SOCIOECONOMIC PROGRAMS
2024 Webinar Series
THE FAR
• Requirements: 1) Be a small business that has not previously participated in the
program; 2) Be at least 51% owned and controlled by socially and economically
disadvantaged U.S. citizens ; 3) Net worth $850K or less, adjusted gross income of
$400 thousand or less, and assets totaling $6.5 million or less; 4) Good character;
5) Potential for success (2 years experience, but waivable)
• No longer social disadvantage – presumptive categories, per Ultima Servs. Corp.
V. Dep’t of Ag. (E.D. Ten. July 19, 2023)
o Economic disadvantage – initial and continuing requirements (net worth, personal income, fair market value
of assets, good character)
• Up to 9 years participation if continue to meet requirements
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
8(a) BUSINESS DEVELOPMENT PROGRAM
2024 Webinar Series
THE FAR
• Must 1) be a small business concern and 2) be 51% directly and unconditionally
owned by one or more veterans (for VOSBs) or service-disabled veterans (for
SDVOSBs) who manage and control daily business operations
• Self-certification is no longer permitted
• SBA- Certified VOSBs are eligible for set-aside and sole-source awards from the VA.
Certified SDVOSBs are eligible for set-aside and sole-source awards across the federal
government
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
SBA VOSB & SDVOSB PROGRAMS
2024 Webinar Series
THE FAR
• Created in 1998 to encourage development in economically
distressed communities (Historically Under-utilized Business Zones)
• Requirements: 1) Be a small business, 2) principal office located in
HUBZone, and 3) 35% of employees reside in HUBZone
• Least used category
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
HUBZONE PROGRAM
2024 Webinar Series
THE FAR
• For a business to be certified as a WOSB, it must:
o be small
o be at least 51 percent directly and unconditionally owned and controlled by one or more women who
are U.S. citizens
o Have a woman manage the day-to-day operations, make long-term decisions for the business, hold
the highest officer position in the business and work at the business full-time during normal working
hours.
• For economically-disadvantaged WOSBs (EDWOSBs), the woman's personal net worth
must be less than $850,000, excluding interest in the concern and her equity in primary
residence
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
WOMAN-OWNED SMALL BUSINESS PROGRAM
2024 Webinar Series
THE FAR
• Set-asides (the Rule of Two)
o Agencies shall set aside for small business participation an acquisition valued over simplified
acquisition threshold if market research shows there is a reasonable expectation of
receiving fair market offers from at least two responsible small business concerns
• For socioeconomic categories, the contracting officer shall consider a
set-aside if conditions are met. For example:
o Follow-on for 8(a) contracts must remain 8(a) unless SBA agrees to non-8(a) competition
o For WOSB, must show women underrepresented in NAICS Code
• No order of precedence among the categories
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
SET-ASIDES
2024 Webinar Series
THE FAR
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
SOLE SOURCE CONTRACTS
• In certain circumstances, if there are fewer than two responsible
sources, the agency could award as a sole-source contract
o Maximum value for sole source awards depending on category
• Rules highly dependent on the SB category
o SBA may challenge agency decision not to award HUBZone, SDVOSB, or
WOSB/EDWOSB sole source
o For example, eligibility and size of awardee for 8(a) sole source may not be
challenged by competitor
2024 Webinar Series
THE FAR
SBSP Requirements
• All contractors receiving awards > $250K must agree to provide
“maximum practicable opportunities” to small businesses. FAR
52.219-8(a).
• Large businesses must provide a subcontracting plan for
procurements >$750K ($1.5M if construction)
• A modification that increases total contract value over $750K can
trigger subcontracting plan requirement. FAR 19.702(a)(3).
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
2024 Webinar Series
THE FAR
SBSP Exceptions
• SBSPs are not required:
o From small business concerns
o For personal services contracts
o For contracts or contract modifications that will be performed
entirely outside the United States
o For modifications within the general scope of the contract
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
2024 Webinar Series
THE FAR
Types of Plans
• Types of SBSPs: individual plans, master plans, commercial plans
• Most common is individual plan:
o Contract-specific
o Covers all periods, including options
o Includes goals based on offeror’s subcontracting projections
o May include indirect costs (must show allocation)
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
2024 Webinar Series
THE FAR
Failure to Comply
• It is a material breach if a contractor fails to comply “in good faith”
with the requirements of its SBSP, including reporting and
cooperating in studies and surveys to determine compliance.
• Government can assess liquidated damages, terminate contractor for
default, and give contractor negative performance reviews.
• Misrepresentations regarding small business subcontracting can be
the basis for FCA actions.
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
2024 Webinar Series
THE FAR
What is “Good Faith” Compliance?
• The 2017 NDAA directed SBA to provide examples of failure to make a
good faith effort to comply.
• December 30, 2019 SBA rule identifies nine “activities reflective of a
failure to make a good faith effort” to comply.
o E.g., failure to: timely submit subcontracting reports; pay small business
subs; designate employee to monitor SBSP, maintain records,
demonstrate procedures for compliance, etc.
• September 10, 2021 FAR rule to align with SBA rule
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
2024 Webinar Series
THE FAR
• Purpose: Mentor to provide BD assistance to protégé
• Duration: Up to 6 years
• Limitations:
o Mentor – Maximum of three protégés at a time.
o Protégé – Maximum of two mentors.
*All-Small and 8(a) Mentor-Protégé Programs Were Consolidated
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SBA SMALL BUSINESS MENTOR-PROTÉGÉ PROGRAM*
2024 Webinar Series
THE FAR
Mentor-Protégé Agreements
• Describe assistance mentor will provide protégé
• Mentor commit to provide assistance for at least one year
• May terminate on 30 days notice to other party and SBA
• Agreement and subsequent changes subject to SBA approval
• Establish single point of contact for agreement
• More: 13 C.F.R. § 125.9(e)
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
2024 Webinar Series
THE FAR
SBA Evaluation of Mentor-Protégé Relationship
• Annual Business Plan Update Must Include:
o Technical and management assistance mentor gave protégé
o Mentor loans/equity investments in protégé
o Mentor subcontract awards to protégé
o Federal contracts awarded to mentor/protégé
o Narrative describing benefit of mentor’s assistance to protégé
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
2024 Webinar Series
THE FAR
Mentor-Protégé Joint Ventures
• Bid on and perform set-aside contracts for which protégé qualifies
• No affiliation based on assistance mentor provides under MPP
• May be awarded unlimited number of contracts within 2 year-period, starting
from the date of the award of the first contract
o May be issued order under previously awarded contract after 2 years
o May be awarded one or more contracts after 2 years if submitted an
offer prior to the end of that two-year period
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
2024 Webinar Series
THE FAR
JV Agreement Requirements
• Set forth purpose
• SB managing venture
• SB own 51% of JV
• Profits commensurate with work
performed [SB perform
minimum 40% of JV work]
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
• Establish special bank account
• Itemize eqpmt./facilities, etc.
• State member responsibilities
• All parties ensure performance
• More: 13 C.F.R. § 125.8(b)(2); §
124.513(c).
FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
• Challenge to the eligibility of an awardee to receive a set-aside contract
• Rules for challenge vary depending on SB program
• Protests are filed with the contracting officer and referred to the SBA Area Office
o Contracting officer and SBA may initiate protests as well, exempt from timeliness
requirements
• Appeals considered by SBA Office of Hearings and Appeals (OHA)
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SIZE/STATUS PROTESTS
2024 Webinar Series
THE FAR
2024 Webinar Series
THE FAR
• Typical protest grounds:
o Exceeds size standard for procurement
o Violates nonmanufacture rule
o Affiliation
o For SB programs—inaccurate representations, not controlled/managed by
women/SDV/etc.
• Differs from eligibility appeals, where small businesses challenge negative
eligibility determinations regarding specific SB programs
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
FAR PART 19 – SIZE/STATUS PROTESTS
2024 Webinar Series
THE FAR
THANK YOU FOR ATTENDING!
FAR PART #19:
Small Business Program
SPEAKER: Zach Prince
FIRM: Haynes and Boone
EMAIL: Zach.Prince@haynesboone.com
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
THE FAR
Please subscribe to our YouTube Channel
for Gov Con Content Uploads
including THESE WEBINARS!
https://www.youtube.com/@jenniferschaus/videos
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
2024 Webinar Series
The FAR:
Federal Acquisition Regulations
THANK YOU FOR JOINING US!
J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com

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2024: The FAR, Federal Acquisition Regulations - Part 19

  • 1. 2024 Webinar Series The FAR: Federal Acquisition Regulations Understand the rules of the federal contracting game - and play to win! J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 2. 2024 Webinar Series THE FAR ABOUT THE SERIES:  We’ll cover each PART of THE FAR  Typically held Wednesdays and Fridays, 12pm  Complimentary  Recorded  Video Posted on YouTube https://www.youtube.com/@jenniferschaus/videos  PPT Posted on SlideShare.net  Sponsor/Advertising Options Available J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 3. 2024 Webinar Series THE FAR J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 4. 2024 Webinar Series THE FAR J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 5. 2024 Webinar Series THE FAR ABOUT US: ⮚ Services for FED GOV CONTRACTORS: ⮚ Washington DC based; ⮚ Professional services for established gov cons; ⮚ Market Analysis to GSA Schedules; ⮚ Contract Administration, etc. J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 6. 2024 Webinar Series THE FAR ABOUT US: ⮚ Services for THOSE SELLING TO FED CONTRACTORS: ⮚ Newsletter Advertising; ⮚ Webinar Advertising; ⮚ Social Media Advertising; ⮚ Event Sponsorship; ⮚ Ask for our MEDIA KIT! J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 7. Get Help With DHS PACTS III Contact Us: hello@JenniferSchaus.com
  • 8. Get Help With NASA SEWP IV Contact Us: hello@JenniferSchaus.com
  • 9. Our Sponsored Content Webinars Palmetier Law – Part 1 of 2 - Thursday JUNE 20 SBIR / STTR Unleashing Small Business Innovations: A Path To Growth & Prosperity https://attendee.gotowebinar.com/register/819675359822707801 Palmetier Law – Part 2 of 2 Thursday JUNE 27 SBIR / STTR Unleashing Small Business Innovations: A Path To Growth & Prosperity https://attendee.gotowebinar.com/register/4351522212519190620
  • 10. 2024 Webinar Series - THE FAR THANK YOU TO OUR WEBINAR SPONSORS J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 11. The FAR – Federal Acquisition Regulations - WEBINAR SERIES 2024 JSchaus & Associates – Washington DC – hello@JenniferSchaus.com
  • 12.  Full training calendar: virginiaptac.org & useful links  Register for free counseling: https://virginiaptac.org/services/counseling/  Your “one stop” shop for Government Contracting assistance  Reach us at apex@gmu.edu or 703-277-7750 This APEX Accelerator is funded in part through a cooperative agreement with the Department of Defense. Next Steps?
  • 13.
  • 14. NOVA B2G Matchmaking Conference 12TH ANNUAL NORTHERN VIRGINIA B2G MATCHMAKING CONFERENCE & SMALL BUSINESS EXPO May 2, 2024 | 8:00 AM - 1:00 PM | Sheraton Reston Hotel nova.restonchamber.org
  • 15.
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  • 18. 2024 Webinar Series THE FAR THE FAR – PART 19 J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 19. 2024 Webinar Series THE FAR THE FAR – PART 19 J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 20. 2024 Webinar Series THE FAR FAR PART #19: Small Business Program SPEAKER: Zach Prince FIRM: Haynes and Boone EMAIL: Zach.Prince@haynesboone.com J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 21. 2024 Webinar Series THE FAR Agenda • Overview • Small Business Programs • Socioeconomic Small Business Programs • Set-Asides and Sole Source • Small Business Subcontracting Plans • SBA Mentor-Protégé Program • Size/Status Protests J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 22. 2024 Webinar Series THE FAR Scope and Purpose • To provide “maximum practicable opportunities” in government procurement for small businesses, as well as VOSBs, SDVOSBs, HUBZone small businesses, SDBs, and WOSBs. • To provide opportunities for small businesses to subcontract through small business subcontracting plans imposed on large businesses. • To ensure that a fair proportion of contracts for supplies and services is placed with small businesses. J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - OVERVIEW
  • 23. 2024 Webinar Series THE FAR • Goal: 23% of awards to small business, subdivided by SB category • FY 2022: 26.5% of prime contract dollars, $162.9 B awarded to small businesses. But continued trend of missing targets for HUBZone, WOSB. J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - OVERVIEW
  • 24. 2024 Webinar Series THE FAR Penalties for Misrepresenting Size or Status • Suspension or debarment • Civil penalties under the False Claims Act; the Program Fraud Civil Remedies Act; 13 CFR part 142. • Criminal penalties for knowingly misrepresenting the small business size status of a concern in connection with small business procurement programs. 18 U.S.C §§ 287, 1001. J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 25. 2024 Webinar Series THE FAR What Is a Small Business? • Size Standards • Affiliation • Socioeconomic Status • Limitations on Subcontracting J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 26. 2024 Webinar Series THE FAR What Are Size Standards? • NAICS Codes o Employee-based  Average number of people employed preceding 24 months o Revenue-based  Average annual receipts last 5 completed fiscal years* J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 27. 2024 Webinar Series THE FAR What Is Affiliation? • Employees or gross receipts of any affiliates count in assessment of a concern’s business size. • Primary test: the ability or power to control concern or when a third party has the ability or power to control both • Control can be affirmative or negative • Control need not be exercised to create affiliation J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 28. 2024 Webinar Series THE FAR J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS Bases for Affiliation • Stock Ownership • Stock Options, Convertible Securities, Agreements to Merge • Common Management • Identity of Interest • Newly Organized Concern • Franchise and License Agreements • Ostensible Subcontractor • Totality of the Circumstances
  • 29. 2024 Webinar Series THE FAR Bases for Affiliation • Exceptions o SBA Mentor-Protégé Program o Qualifying Small Business Joint Ventures o Indian Tribes, Alaska Native Corporations (ANCs), Native Hawaiian Organizations (NHOs), Community Development Corporations (CDCs) J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 30. 2024 Webinar Series THE FAR Limitations on Subcontracting • Applies to small/socioeconomic set-aside & sole-source contracts • Different formulas for products, services, construction • Exclusion for subcontracts to similarly-situated entities • Non-Manufacturer Rule J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 31. 2024 Webinar Series THE FAR What are the Limitations on Subcontracting? • Supplies - cannot subcontract more than 50%, excl. materials.* • Services - cannot subcontract more than 50%.* • Construction - cannot subcontract more than 85%, excl. materials.* *Based on total price Government paid for performance (with similarly-situated entities excluded). J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 32. 2024 Webinar Series THE FAR When Is Size Recertification Required? • A firm that represented itself as a small business before contract award must recertify its status as a result of: o Fifth year of a “long-term” contract o Merger, sale, acquisition, or novation (including 180-Day Rule) o CO requires for task order o Orders set aside for small businesses under unrestricted MACs J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 - SMALL BUSINESS PROGRAMS
  • 33. 2024 Webinar Series THE FAR What Socioeconomic Programs Are Available? • 8(a) Business Development Program • Veteran-Owned Small Business (VOSB)/ Service-Disabled Veteran- Owned (SDVOSB) Programs • HUBZone Program • Woman-Owned Small Business (WOSB) Program J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SOCIOECONOMIC PROGRAMS
  • 34. 2024 Webinar Series THE FAR • Requirements: 1) Be a small business that has not previously participated in the program; 2) Be at least 51% owned and controlled by socially and economically disadvantaged U.S. citizens ; 3) Net worth $850K or less, adjusted gross income of $400 thousand or less, and assets totaling $6.5 million or less; 4) Good character; 5) Potential for success (2 years experience, but waivable) • No longer social disadvantage – presumptive categories, per Ultima Servs. Corp. V. Dep’t of Ag. (E.D. Ten. July 19, 2023) o Economic disadvantage – initial and continuing requirements (net worth, personal income, fair market value of assets, good character) • Up to 9 years participation if continue to meet requirements J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com 8(a) BUSINESS DEVELOPMENT PROGRAM
  • 35. 2024 Webinar Series THE FAR • Must 1) be a small business concern and 2) be 51% directly and unconditionally owned by one or more veterans (for VOSBs) or service-disabled veterans (for SDVOSBs) who manage and control daily business operations • Self-certification is no longer permitted • SBA- Certified VOSBs are eligible for set-aside and sole-source awards from the VA. Certified SDVOSBs are eligible for set-aside and sole-source awards across the federal government J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com SBA VOSB & SDVOSB PROGRAMS
  • 36. 2024 Webinar Series THE FAR • Created in 1998 to encourage development in economically distressed communities (Historically Under-utilized Business Zones) • Requirements: 1) Be a small business, 2) principal office located in HUBZone, and 3) 35% of employees reside in HUBZone • Least used category J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com HUBZONE PROGRAM
  • 37. 2024 Webinar Series THE FAR • For a business to be certified as a WOSB, it must: o be small o be at least 51 percent directly and unconditionally owned and controlled by one or more women who are U.S. citizens o Have a woman manage the day-to-day operations, make long-term decisions for the business, hold the highest officer position in the business and work at the business full-time during normal working hours. • For economically-disadvantaged WOSBs (EDWOSBs), the woman's personal net worth must be less than $850,000, excluding interest in the concern and her equity in primary residence J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com WOMAN-OWNED SMALL BUSINESS PROGRAM
  • 38. 2024 Webinar Series THE FAR • Set-asides (the Rule of Two) o Agencies shall set aside for small business participation an acquisition valued over simplified acquisition threshold if market research shows there is a reasonable expectation of receiving fair market offers from at least two responsible small business concerns • For socioeconomic categories, the contracting officer shall consider a set-aside if conditions are met. For example: o Follow-on for 8(a) contracts must remain 8(a) unless SBA agrees to non-8(a) competition o For WOSB, must show women underrepresented in NAICS Code • No order of precedence among the categories J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com SET-ASIDES
  • 39. 2024 Webinar Series THE FAR J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com SOLE SOURCE CONTRACTS • In certain circumstances, if there are fewer than two responsible sources, the agency could award as a sole-source contract o Maximum value for sole source awards depending on category • Rules highly dependent on the SB category o SBA may challenge agency decision not to award HUBZone, SDVOSB, or WOSB/EDWOSB sole source o For example, eligibility and size of awardee for 8(a) sole source may not be challenged by competitor
  • 40. 2024 Webinar Series THE FAR SBSP Requirements • All contractors receiving awards > $250K must agree to provide “maximum practicable opportunities” to small businesses. FAR 52.219-8(a). • Large businesses must provide a subcontracting plan for procurements >$750K ($1.5M if construction) • A modification that increases total contract value over $750K can trigger subcontracting plan requirement. FAR 19.702(a)(3). J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
  • 41. 2024 Webinar Series THE FAR SBSP Exceptions • SBSPs are not required: o From small business concerns o For personal services contracts o For contracts or contract modifications that will be performed entirely outside the United States o For modifications within the general scope of the contract J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
  • 42. 2024 Webinar Series THE FAR Types of Plans • Types of SBSPs: individual plans, master plans, commercial plans • Most common is individual plan: o Contract-specific o Covers all periods, including options o Includes goals based on offeror’s subcontracting projections o May include indirect costs (must show allocation) J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
  • 43. 2024 Webinar Series THE FAR Failure to Comply • It is a material breach if a contractor fails to comply “in good faith” with the requirements of its SBSP, including reporting and cooperating in studies and surveys to determine compliance. • Government can assess liquidated damages, terminate contractor for default, and give contractor negative performance reviews. • Misrepresentations regarding small business subcontracting can be the basis for FCA actions. J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
  • 44. 2024 Webinar Series THE FAR What is “Good Faith” Compliance? • The 2017 NDAA directed SBA to provide examples of failure to make a good faith effort to comply. • December 30, 2019 SBA rule identifies nine “activities reflective of a failure to make a good faith effort” to comply. o E.g., failure to: timely submit subcontracting reports; pay small business subs; designate employee to monitor SBSP, maintain records, demonstrate procedures for compliance, etc. • September 10, 2021 FAR rule to align with SBA rule J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SMALL BUSINESS SUBCONTRACTING PLANS
  • 45. 2024 Webinar Series THE FAR • Purpose: Mentor to provide BD assistance to protégé • Duration: Up to 6 years • Limitations: o Mentor – Maximum of three protégés at a time. o Protégé – Maximum of two mentors. *All-Small and 8(a) Mentor-Protégé Programs Were Consolidated J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SBA SMALL BUSINESS MENTOR-PROTÉGÉ PROGRAM*
  • 46. 2024 Webinar Series THE FAR Mentor-Protégé Agreements • Describe assistance mentor will provide protégé • Mentor commit to provide assistance for at least one year • May terminate on 30 days notice to other party and SBA • Agreement and subsequent changes subject to SBA approval • Establish single point of contact for agreement • More: 13 C.F.R. § 125.9(e) J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
  • 47. 2024 Webinar Series THE FAR SBA Evaluation of Mentor-Protégé Relationship • Annual Business Plan Update Must Include: o Technical and management assistance mentor gave protégé o Mentor loans/equity investments in protégé o Mentor subcontract awards to protégé o Federal contracts awarded to mentor/protégé o Narrative describing benefit of mentor’s assistance to protégé J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
  • 48. 2024 Webinar Series THE FAR Mentor-Protégé Joint Ventures • Bid on and perform set-aside contracts for which protégé qualifies • No affiliation based on assistance mentor provides under MPP • May be awarded unlimited number of contracts within 2 year-period, starting from the date of the award of the first contract o May be issued order under previously awarded contract after 2 years o May be awarded one or more contracts after 2 years if submitted an offer prior to the end of that two-year period J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
  • 49. 2024 Webinar Series THE FAR JV Agreement Requirements • Set forth purpose • SB managing venture • SB own 51% of JV • Profits commensurate with work performed [SB perform minimum 40% of JV work] J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com • Establish special bank account • Itemize eqpmt./facilities, etc. • State member responsibilities • All parties ensure performance • More: 13 C.F.R. § 125.8(b)(2); § 124.513(c). FAR PART 19 – SBA MENTOR-PROTÉGÉ PROGRAM
  • 50. • Challenge to the eligibility of an awardee to receive a set-aside contract • Rules for challenge vary depending on SB program • Protests are filed with the contracting officer and referred to the SBA Area Office o Contracting officer and SBA may initiate protests as well, exempt from timeliness requirements • Appeals considered by SBA Office of Hearings and Appeals (OHA) J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SIZE/STATUS PROTESTS 2024 Webinar Series THE FAR
  • 51. 2024 Webinar Series THE FAR • Typical protest grounds: o Exceeds size standard for procurement o Violates nonmanufacture rule o Affiliation o For SB programs—inaccurate representations, not controlled/managed by women/SDV/etc. • Differs from eligibility appeals, where small businesses challenge negative eligibility determinations regarding specific SB programs J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com FAR PART 19 – SIZE/STATUS PROTESTS
  • 52. 2024 Webinar Series THE FAR THANK YOU FOR ATTENDING! FAR PART #19: Small Business Program SPEAKER: Zach Prince FIRM: Haynes and Boone EMAIL: Zach.Prince@haynesboone.com J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 53. 2024 Webinar Series THE FAR Please subscribe to our YouTube Channel for Gov Con Content Uploads including THESE WEBINARS! https://www.youtube.com/@jenniferschaus/videos J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com
  • 54. 2024 Webinar Series The FAR: Federal Acquisition Regulations THANK YOU FOR JOINING US! J Schaus & Associates, WASHINGTON DC – hello@JenniferSchaus.com