The Set Aside Contracts - Research Paper Example

?Running head: SET ASIDE Set Aside Insert Insert Insert 29 July Set Aside In this paper the set aside contracts are deeply explained from their definition, categories, strengths and challenges, to their application. The paper also gives information on the NAICS 561730 relating to the services they offer, their role and contribution to the national economy. Further the papers introduce FPDS and then analyze the top 100 contractors and small business goaling report for fiscal year 2010. On analysis the justification for why VA and Defense Department are chosen as providing the best contracting opportunities for NAICS 561730 is shown and supported with evidence. Finally, the best available contracting opportunity for NAICS 561730 is identified and the reason stated. Set Aside Introduction Set aside contract is ‘’a federal contract under which only small business are allowed to bid’’ (HJ Ventures, 2004). The set aside small business contracts are mainly awarded to start ups, minority owned businesses, women-owned businesses, disabled people businesses, veterans group businesses and other special groups businesses. These type of businesses mostly lack capital and experience to start or expand thus they lack the machinery to compete with large or other successful businesses. In order to help them overcome those challenges that why the government reserves some of it contract specifically for them. A part from the special treatment in bidding for the contracts the small business owners stands to gain the following benefits under these programs: training courses and counseling on owning or managing a business, and additionally they are eligible for various loans and advance payments within the program (Guthrie, 2011). Set-asides though awarded on special basis have been quite controversial in business context since the projects from the private sector are mainly awarded on the basis of price, performance, value added and quality, while set-asides are awarded on basis on size, class, race, gender, thus harming legitimate businesses and breeding corruption (Bbutkins, 2010). Under the Small Business Act, the law bids the federal agencies to carryout various procurements that are partially or wholly reserved for small business participation (FSD, 2010). Under this act there are several set-aside categories for the different small businesses ventures which include: Competitive 8(a), Emerging Small Business, HUBZone, Partial Historically Black College or University (HBCU) / Minority Institution (MI), Partial Small Business, Service-Disabled Veteran-Owned Small Business, Total HBCU / MI, Total Small Business, and Veteran-Owned Small Business (FSD, 2010). Therefore small business set-aside categories will award certain acquisitions exclusively to eligible small business concerns. Hence a set-aside may totally or partially open to all small businesses, a single acquisition or a class of acquisitions. In the procurement bidding process the set-asides are conducted through simplified acquisition procedures, sealed bids, or competitive proposals. The small business set asides are awarded contracts either as the primary contractor or sub-contractor. According to the North American Industry Classification System (NAICS) categories 561730 Landscaping Services is defined as ‘’ventures that specialize in providing landscape care and maintenance services and/or installing trees, shrubs, plants, lawns, or gardens and ventures that specialize in providing these services along with design of landscape plans and/or the construction of walkways, retaining walls, decks, fences, ponds, and similar structures’’ (NAICS, 2007). Landscaping services provide employment to a quite sizable portion of the American population and also improve the outlook of households. They also significantly improve the value of homes. More than 14500 businesses in the United States are classified as landscaping services (NAICS 561730), with majority of these ventures comprising of a workforce of less than five people in provision of landscaping services (GeorgiaSBDC, 2002). Thus most of NAICS 561730 is small businesses that are recognized by federal agencies procurement processes as set aside businesses. FPDS Federal Data Procurement System (FPDS) is the only recognized source for the United States government procurement data. This systems contains the data and information about all the government wide contracts that have been awarded or pending the bidding process by the various stakeholders interested in them. Thus in this system reports for procurement history for different fiscal years and business categories (small or large) can be generated. These reports show the procurement trends in the various government departments and can used for research and other analysis purposes. In this section the reports of procurement histories of the recent years will be analyzed in terms of volume and dollar amount. Then these analyses will be used to determine the best contract opportunities available from the government’s departments. According to the Top 100 Contractors information provided by the federal procurement 2010 report the following companies were the top contractors to the government: first was Lockheed Martin Corporation with 21700 successful bids worthy $35,828,421,340.83; second was the Boeing Company with 14039 successful bids worthy $19,486,294,255.83; third was Northrop Grumman Corporation with 19587 successful bids worthy $16,797,921,451.22; and fourth was General Dynamics Corporation with 17934 successful bids worth $15,249,055,811.75. Lockheed Martin Corporation is a global security and information technology company whose majority of contracts are with the U.S. Department of Defense. Boeing Company is the number 1 world’s aerospace company whose contracts with U.S. government are mainly for military aircrafts and defense systems. Northrop Grumman Corporation is a global security company whose contracts with the government are for defense purposes. General Dynamics Corporation is a global provider of information systems and defense systems whose contracts with the government are defense related. Therefore based on this information the top four companies contracts to the government are to the defense department. Based on dollar value spent the best opportunities are from the defense department thus my company should pursue opportunities from these department. On further analyzing these report the VA Department is the second in order of the best opportunities based on dollar value. In essence the company should pursue opportunities from the defense and VA department. According to the Small Business Goaling information provide by the federal procurement 2010 report the following departments were the top contract awarders to small businesses: First was the Department of Defense with 1960516 successful bids worthy $291,943,348,276.95; second was Department of Veteran Affairs (VA) with 473528 successful bids worthy $16,039,864,951.02; and third was Department of General Service Administration (GSA) with 250025 bids worthy $8,108,333,587.39. This classification is based on the volume of bids since the number bids can be a better indicator of probability of placing a successful bid than the dollar value of the contracts. Also use of volume is based on assumption that most of the small business contracts are low value contracts. Based this information the agency with best opportunities is the Department of Defense, followed by the VA. Thus I would recommend my company to pursue opportunities from these two agencies. The above conclusion is quite justified since on looking at the report analysis for the fiscal year 2005 (FY05) through FY09 for the top ten federal agencies for NAICS 561730 its very clear that defense and VA department have the best opportunities for my kind of business. This shown by the graph shown below. Source: Epipeline, 2009; http://www.epipeline.com/mktng/nl-articles/naics-code-561730-2009.html This information shows that defense department provided more than 60 percent of the NAICS 561730 contract opportunities followed by VA provided around 12 percent of opportunities that were worthy more than $160million (Epipeline, 2009). For defense department most of the military sites have base wide grounds maintenance contracts while VA ground maintenance contracts are mainly for maintaining national veterans cemeteries. On searching for NAICS 561730 contract opportunities from FEDBIZOPS the following opportunity was the only one that matched my kind of business. DEPOSIT REMOVAL Hornell NY Solicitation Number: W912DR-11-T-0070 Agency: Department of the Army Office: U.S. Army Corps of Engineers Location: USACE District, Baltimore Notice Type: Combined Synopsis/Solicitation Posted Date: July 15, 2011 Response Date: Jul 29, 2011 12:00 pm Eastern Archiving Policy: Automatic, 15 days after response date Archive Date: August 13, 2011 Original Set Aside: N/A Set Aside: Total Small Business Classification Code: Z -- Maintenance, repair, and alteration of real property NAICS Code: 561 -- Administrative and Support Services/561730 -- Landscaping Services Primary Point of Contact: Nancy Kebe-Robinson, Contract Specialist nancy.kebe-robinson@usace.army.mil Phone: 410-962-3987 Secondary Point of Contact: Colette Day, Contract Specialist colette.b.day@usace.army.mil Phone: 410-962-4978 Fax: 410-962-2776 SYNOPSIS: This proposed procurement is set-aside for Small Businesses, NAICS 561730 size standard of $7.0 Million. A service contract is needed to ensure continuity of the required maintenance at the Hornell and Canisteo LFPPs under the Baltimore District Operation and Maintenance personnel in New York State. Deposit and sediment removal at the projects is essential to ensure they are upheld to the highest Corps standards in support of our mission. This information is available from FEDBIZOPPS. GOV. Based on the available opportunities this is the opportunity which my business will pursue since it’s the only one that is available and that suits my kind of business. References Epipeline, A. (2009). NAICS 561730: Landscaping Services Government Contract and Procurement Analysis Report. Retrieved from http://www.epipeline.com/mktng/nl-articles/naics-code-561730-2009.html FEDBIZOPPS. (2011). Notice Details. Retrieved from https://www.fbo.gov/index?s=opportunity&mode=form&id=590290d3fcb4720e0d9c51d8302f9712&tab=core&_cview=0. FPDS. (2011). Federal Procurement Report. Retrieved from https://www.fpds.gov/fpdsng_cms/index.php/reports. FSD, (2010). What is a set-aside code? Retrieved from https://www.fsd.gov/app/answers/detail/a_id/56/~/what-is-a-set-aside-code%3F GeorgiaSBDC. (2002). Industry Fact Sheets—Landscaping Services (NAICS 561730): Industry Statistics. The University of Georgia BOS/SBDC. Retrieved from https://www.georgiasbdc.org/pdfs/landscaping2.pdf. Guthrie, L. (2009).The Different Types of Set-Aside Programs. Retrieved from http://ezinearticles.com/?The-Different-Types-of-Set-Aside-Programs&id=2431227. HJ Ventures. (2004). SBA Loan Terms: Set Aside Contract. HJ Ventures International, Inc. Retrieved from http://www.hjventures.com/SBA/Set-Aside-Contract.html. NAICS, (2007). 561730 Landscaping Services. Retrieved from http://www.naics.com/censusfiles/ND561730.HTM. Read More