FED GOV CON - Life After 8a & Best Practices

Navigating the Section 8(a) Program: Can I
Benefit and If So How?
US Federal Government Contracting
Webinar Series - 2016
Presented By:
Patrick Fazzone
JUNE 9, 2016
YOUR LOGO
HERE

CALENDAR OF EVENTS:
(All Webinars are at 12pm EST & Recorded)
JUNE 1 - Maximizing The Value of Your GovCon Business
https://attendee.gotowebinar.com/register/74156936435694851
JUNE 2 - Capture Planning - To Bid Or Not To Bid
JUNE 3 - Teaming Agreements - The Good, The Bad & The Enforceable
JUNE 6 - Teaming With Tribally Owned 8(a) Businesses
JUNE 7 - Color Reviews For Successful Proposals
JUNE 8 - Preparing The FSO for a DSS Audit
JUNE 9 - Life After 8(a) - Best Practices & Case Study
JUNE 10 - The Politics Of Procurement
JUNE 13 - Contract Administration - Best Practices
JUNE 14 - So You Have A Facility Clearance, Now What?
JUNE 15 - Unsolicited Proposals - Why, What & How.
JUNE 17 - SBIR's - The Good, The Bad & The "How"
2016 US Federal Government Contracting Webinar Series

AGENDA

AGENDA:
• Introduction – HOST
•Introduction - GUEST
• Presentation
•Conclusions
• Q & A

INTRODUCTION
Host

Jennifer Schaus
About The Host
* Approx 20 Yrs in Gov Contracting
* Career: D&B (Govt Division)
Federal Sales & GSA Scheds
* Frequent Speaker: Chambers, NCMA, AFCEA, etc
* Member: WIPG
* Education: Towson University – B.A.
UC Berkeley - Leadership Accelerator
Cornell University - Exec Leadership

Jennifer Schaus
Jennifer Schaus & Associates
* DC Based Consulting Firm
* Over 10 Yrs in Business
* Support Services for Gov Cons
Proposal Writing / Contract Vehicles (GSA)
Sales & Biz Dev
Certifications – SBA 8(a); SDVO; etc.
Events

INTRODUCTION
Guest
YOUR LOGO
HERE

Patrick Fazzone
ABOUT OUR SPEAKER
Patrick Fazzone
Partner, Member Montgomery Fazzone PLLC
Counsels companies on doing business with the
U.S. Government:
Contracting strategies
Understanding acquisition system and
regulations
Opportunities for small to mid-sized businesses

Patrick Fazzone
Montgomery Fazzone PLLC
YOUR LOGO
HERE
Montgomery Fazzone PLLC
Washington DC based law firm.
Advising clients in a broad range of matters
involving The U.S. Government.
Corporate & Commercial law.
International transactions & trade regulation,
Federal acquisition
Facility (security) clearances for foreign-owned
companies
Government relations, litigation & tax matters.

PRESENTATION
Maximizing the Benefits of the Section 8(a) Program: Best
Practices

BACKGROUND ON THE SBA 8(a) PROGRAM:
* The Small Business Administration (“SBA”) administers various pgms
mandated by the U.S. Small Business Act (“Act”). These are designed to assist
qualifying small businesses to grow.
* To participate, the business must be unconditionally owned & controlled by
an individual who can demonstrate that he or she has suffered social &
economic disadvantages.
* The business must also demonstrate potential for success & normally must
be in business for at least 2 yrs prior.
* SBA will consider the concern’s access to credit & capital & the technical &
managerial experience of the SBC’s managers, its prior operating history &
performance on previous government & private sector contracts & its financial
capacity.
* There are additional eligibility criteria as well (Good Character, etc).

CONSIDERATIONS IN APPLYING FOR CERTIFICATION:
* Participation = 9 Yrs Total
- 4 yr developmental / growth stage
- 5 yr transitional stage.
* 9 yr term can be shortened only by (1) termination, (2) early graduation or (3)
voluntary graduation.
* Rigorous certification process.
Considerable documentation both to establish eligibility, including reasonable
prospects for business success.
* Post-certification, participant must submit a business plan which must be
approved by an SBA to be eligible for program benefits.
* Business Pllan must include analysis of the market potential & specific
targets, objectives & goals for business development.

OTHER IMPORTANT CONSIDERATIONS:
* No Guarantees
SBA does not “serve up” contracts & opps to participating firms. They must
undertake their own independent marketing activities for contracts both in the
public and private sectors.
* Post-Award Requirements
SBA regulations mandate non-8(a) business activity targets. Participants must
make “substantial & sustained efforts” to attain the targeted dollar levels of non-
8(a) revenue established in its business plan.
* Limitations $$$
There are overall limits on the total dollar value of sole source contracts firms can
receive while in the program.

OTHER IMPORTANT CONSIDERATIONS, cont’d.
On-going Requirements:
-- Continuing to meet size, ownership & control criteria for the term of the prgm;
-- Maintaining a balance between govt contracts & comml business;
-- SBA will monitor & measure the progress through annual reviews, business
planning & systematic evaluations.
-- Back Office reporting and compliance.

CONSIDERATIONS IN PUSURING CERTIFICATION:
ASK YOURSELF………
* Is your firm eligible, even if the owner is socially & economically disadvantaged?
* Is it worth going through certification? Will your product or service have a market?
* Is the govt market for you? Selling to the USG can be complicated. Contracts are
subject to a variety of special rules & regulations, notably the FAR & other agency
procurement regulations.
* Does your track record indicate a reasonable prospect of business success?
Are there any issues under the Good Character requirement?
* Do you have the staff to be able to develop & implement your business plan?
Is the timing right?
* Will you be able to achieve a balance between govt contracting & comml business?

---- CONSIDER TIMING -----
TIMING IS EVERYTHING!
* Even if you are technically eligible now, it’s important to wait until the timing is right.
- Get educated about govt contracting FIRST
- Secure contracts and build relationships
- Understand your value and key differentiators (not 8a status!!)
* Make sure your overall business plan has realistic goals & objectives. Ensure you
have the resources & staff to be able to benefit from the 8(a) program.
* Make sure your business and products/services will be positioned for both govt &
comml markets.

MAXIMIZING THE BENEFITS OF 8(a) CERTIFICATION
* DO NOT RELY ON (ONLY) THIS TO WIN CONTRACTS
Provides useful support, but it is up to you / your firm to make the business a success.
* DOES NOT ELIMINATE COMPETITION
To benefit from set asides, sole sourcing & subcontracts you still need to compete.
* BALANCE & BUSINESS PLAN
Develop a balance of govt & comml contracts. Implement & adapt your business plan.
* EXPANSION
Initiatives to expand your products / services. Consider other ways of growing – ie.
attract investors or form alliances.
* SPRINGBOARD TO FAST GROWTH
An objective for many is to graduate early. Creates opportunity to pursue growth
strategies that may not be permitted under the program while removing the requirement
for ongoing monitoring & compliance.

EARLY EXIT
* SBA TERMINATION:
Participation terminated by SBA for various reasons including loss of eligibility or failure
to adhere to program requirements.
* SBA GRADUATION:
SBA can also graduate the SBC early if it has achieved its business plan goals or if the
key individual is no longer economically disadvantaged.
* VOLUNTARY GRADUATION (BY COMPANY):
Voluntary Early Graduation—Permitted where a firm has met its business plan goals &
is commercially viable. A firm may elect to do this for greater flexibility in its business
operations.

CASE STUDY:
Client Objective – benefit from 8(a) Cert set-asides, accelerate growth
Became 8(a) Certified
After time, contracting opps became less important to its business.
Simultaneously desired larger company as a significant investor in the
business. The objective was to accelerate its growth.
Client achieved business plan objectives, had very realistic prospects for
success & graduated early.

LIFE AFTER 8(a):
Participant Objective: Develop / grow its business so that it will be
sustainable afterwards.
When you graduate, success is not a given. The playing field is a lot
flatter and the competition can be fierce.

LIFE AFTER 8(a):
Years 1 – 4 = Developmental Phase
Years 5 – 9 = Transition Phase
Transition Phase = Plan a graduation strategy to help ensure a successful transition
to the open market place. SUGGESTIONS:
* Plan on graduating from the program early. This will help create a sense of
purpose and urgency and a focus on the longer-term.
* Don’t wait until Year 9 and find yourself saying “Now What?”
Remember: You can ONLY participate in the 8(a) program ONCE.
* During participation consider different staff for govt and coml sectors to help you
achieve a balance in sales. Don’t rely ONLY on govt markets and ONLY on 8(a).

LIFE AFTER 8(a):
* Consider International Markets & Export Sales.
Ref: Commerce Dept & state govt pgms available.
* Product Adaptations & Financing
If you identify product adaptations that may be needed, determine what financing you
may require as early as possible so that you can implement your plans and make
sales during your time in the program.
* Business Growth & Investors
Keep your eye on all potential strategies for business growth at all stages. You may
not be able to bring in outside investors while you remain in the program but you can
start positioning your business for early graduation and this type of expansion
thereafter.

LIFE AFTER 8(a):
* Contract Vehicles & Alliances
While you are in the program, look closely at the various ways firms can pursue
government contracts, including through teaming arrangements, qualifying JVs and
listing your product or service on a GSA Schedule. Many of these strategies can
continue to be used post-graduation.
* Be Strategic
At the same time, narrow your focus as you transition. Identify specific agencies,
sub-agencies and departments. You may want to focus on those agencies with
whom you have been dealing successfully. (RELATIONSHIPS!)

LIFE AFTER 8(a):
* Team / Sub-Con Before Graduation
Get your foot in the door. Forming teaming relationships with larger firms before you
graduate. They may well find you attractive to deal with now while you are eligible for
set asides.
* Mentor-Protégé Program.
* Talent
Hire the right talent; consider employing ex-government employees who may have
good ties with and knowledge about their former agencies. Seek advice in advance
on the restrictions on ex-employees that may apply.
* Financial Awareness
Keep a close eye on expenditures and finances generally as you near graduation.
8(a) firms can experience a significant drop in revenues after they graduate.

LIFE AFTER 8(a):
* Dynamic Business Plan
Formally plan ahead for your exit from the program. Start modifying your business
plan as necessary well in advance of your graduation.
* Focus closely in your planning on three key factors essential to business success
generally:
Business focus,
Sound finances,
Unique characteristics.

LIFE AFTER 8(a):
REMEMBER: Once you are in the competitive market place, what
sets your business, products / services apart from the competition
becomes essential.
Related & equally important: building your brand. “Strategic Brand
Management”: good will, IP, reputation with customers, suppliers
and partners.
Invest in your website & marketing materials now. They need to
demonstrate your firm’s unique value proposition
Thinking about life after 8(a) is always important since your
company’s growth following participation will depend on
business other than contracts set asides.

CONCLUSIONS

CONCLUSIONS
* SBA 8(a) Program can greatly benefit
eligible businesses.
* Important to choose the right time to apply.
* Once you’re “in”, it’s vital to take the right
steps to expand your business & ensure its
long term success.

CONCLUSIONS - JS
#1 - Don’t enter the program TOO early – set up
for failure. TIMING, TIMING, TIMING
#2 - Always lead with your Value Proposition, not
your set-aside status. 8(a) is a marketing tool,
no guarantees. Govt will buy based on your
value. “Check box” is only an incentive.
#3 - Make a plan “well in advance” for post-
graduation. (Contract Vehicles, Relationships w
Primes, New Entrees into the 8a Prgm – pass the
batton)

Q & A

CONTACT DETAILS
Ms. Jennifer L. Schaus
Washington DC
+ 1 - 2 0 2 – 3 6 5 – 0 5 9 8
jschaus@jenniferschaus.com
www.JenniferSchaus.com
------------------------------
Patrick Fazzone
Washington DC
2 0 2 – 8 8 8 – 2 1 0 3
pfazzone@mft-law.com
www.montgomeryfazzone.com

FED GOV CON - Life After 8a & Best Practices

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