Small Business Program and Source Selection Plans - Assignment Example

? SMALL BUSINESS PROGRAM AND SOURCE SELECTION PLANS Small Business Program and Source Selection Plans Introduction The preference program was started with an aim of including small businesses in the contract tenders, mostly offered by the federal government. This paper has outlined the provisions that form the basis of this program. In writing this paper, I will take the position as the government employee receiving the proposal from the contractor. The paper is inclusive of various selection processes and will discuss in detail the purpose of the program. The paper will also evaluate the contract formats that are used during the acceptance of a contract tender. The paper will also outline the purpose of the source selection plan with reference to the evaluation plans. Finally, the paper will evaluate the program eligibility to participate and rank the criteria employed. Purpose of the Small Business Program The reasons for the creation of this program can be traced to the Competition in Contracting Act of 1984 of the United States (US) (Compton, 2012). The act, when paraphrased, denotes that a fair proportion of the overall purchases and contracts that a government places should be allocated to small businesses. It is mandatory that federal agencies be held responsible for generating and implementing policies that will ensure small businesses get their share of the contracts from the federal government. The small business program was created and established by the Small Business Act in 1953. A small business in this context is described as an independently owned business that is termed not dominant in terms of the market share and operational field. According to the statistics done in 2006, 99.7 percent of all the companies operating in the United States were found to be small businesses. The number of small businesses at that time was 25.8 million (Compton, 2012, p. 84). The implication of this is that the general economy of the US is driven by these companies. They do this through the creation of jobs, production of technology and other goods; encourage free competition; and finally contribute a lot of funds to the tax revenue required for development of the country. This program was, therefore, established to enforce the act passed by the United States Congress (Compton, 2012). The idea of developing programs to help the small businesses navigate or penetrate through the federal government acquisition system was generated and authorized by the Congress. Its argument was that these programs would help the country to attain the social objectives and economic goals. Their rationale was to use the federal contracts as the framework for achieving goals of the nation at large through promoting the businesses termed as small and disadvantaged. The program was hence created to assist and protect the small business interest at the government level. The programs help the United States citizens who have started their own businesses to grow, translating to a strengthened and maintained Unites States economy (Government Contracting, 2012). Generally, these programs were created to ensure that those businesses or companies received their fair share of the federal government service and supply contracts and subcontracts. The intention was to allow the small businesses to receive a share of the property sold by the government. This would help in maintaining the economy. The program is also mandated with the setting of the size standard relating to the small businesses. This is done through identifying the people it employs or the average receipts the company generates annually (Compton, 2012). The federal agencies normally use these standards to gauge whether a certain company is competitive enough to win a given federal contract. A business is, therefore, supposed to maintain this set size standard for it to be termed eligible to participate in the small business program. If the firm exceeds this set size standard, it is not allowed to participate. Another major purpose of this program is to issue a certificate of competency to the officer in charge of contracting. This normally happens if the business wins a government contract but is found to be not responsible by the agency from the government (Compton, 2012). Small Business Set-Aside Program This is a previously set program that is meant to help the small business to attain or win a fair share of contracts offered by the federal government. The program achieved this through reserving certain acquisition activities that are specifically meant for the small businesses. The two forms of set-aside acquisitions include total and partial set-asides. Total set-aside refers to the acquisitions strictly set aside for the small business to perform, while partial set-asides refer to portions of those acquisitions awarded to the small businesses (Compton, 2012). The program, however, defines the small businesses that are eligible for set-asides. They define the businesses eligible for participation as those businesses owned by two or more veterans and are service-disabled, historically underutilized small businesses, disadvantaged and women-owned small businesses. A small business is termed eligible if it is not widespread in its industry of operation on the basis of national geography and must be qualified by the small business program as a small business (Compton, 2012). A business is described as veteran-owned if ownership by veterans is not below 51 percent (Compton, 2012, p. 91). The program requires that maximum contract opportunities be accorded to these kinds of businesses. The contracting officer restricts the competition on the expectation that more than two Small-Disable Veteran-Owned Small Business (SDVOSB) will submit offers and the award will be made at a price reasonable and fair to all. The hubzone businesses are selected for the purpose of stimulating the economy in the historically underutilized zones located in both urban and rural areas (Compton, 2012). A business is termed disadvantaged if it is qualified by the Small Business Program (SBP) as a small business. A minimum of 51 percent must be controlled and owned by at least one individual who is a socially and economically challenged United States citizen. The business must also be qualified by SBA and certified to participate in the program. For a business to be termed as women owned, 51 percent of the business has to be controlled and owned by United States women citizens. FAR 19.201 advocates that women-owned businesses must be given a maximum opportunity to participate in the government awarded contracts either as contractors or sub-contractors (SBA, 2013). Government agencies are required to set acquisitions aside to enable free competition among the small businesses. It is also clear that the agency that is contracting ill have to certify that there is a reasonable expectation that two vendors will give offers. It is required that the contracting must take into consideration a certain dollar threshold. This includes: Micro-Purchases from Commercial Businesses, Simplified Acquisition Procedures, and Subcontracting Plan Procedures (O'Connor and Wangemann, 2009, p.17). Micro-Purchases from Commercial Businesses This refers to acquisition of supplies not exceeding a $3,000 dollar threshold. The amount of threshold is, however, dependent on the business subject. For instance, services relating to construction require a threshold of $2,000 dollars while that relating to the service contract is $2,500 dollars. The micro purchases are made by both small and larger businesses operating in a commercial market place. Purchases that are made using this method of micro-purchasing are made without competition especially if the contracting officer considers price that is reasonable. There is an expectation of this if the acquisition is done as a contingency plan to support certain operations. If the acquisition is done in the United States, the threshold is set at $15,000 dollars, but if it is done outside the United States, the threshold is set at $25,000 dollars (Compton, 2012). Simplified Acquisition Procedures FAR 19.502 requires that the acquisition of services or other supplies that is done in the open market and exceeding the $3,000 dollar threshold but limited to $150,000 dollars be reserved purposely for the small businesses concerns. In some instances, acquisitions are done to support the contingency operations. When such cases arise, the operations thresholds are limited to $205,000 dollars if the acquisitions occur in the United States and 1 million dollars if the acquisitions occur outside the United States. If the contracting officer finds no expectation of receiving more than 2 offers, the acquisition is not set aside for the small businesses (Compton 2012, p.94). Subcontracting Plan Procedures This applies when complex and large-dollar acquisitions are made. The large companies are given the contracts as contractors, but other small businesses are awarded as sub-contractors. The Small Business Act requires that the opportunity be maximized fully. The act requires that subcontracting plans be awarded for any acquisition of services or equipment exceeding $650,000 dollars in cost and for services relating to construction exceeding $1.5 million dollars. The requirement is that any large company or business that exceeds this threshold and is participating in open competition for contracts should have a subcontracting plan before the contract is awarded, which should be approved by the contracting officer (O'Connor and Wangemann, 2009, p.23). Failure to comply with this requirement results in paying liquidated damages equal to the cost of subcontracting goal not achieved (Compton, 2012). Contract Formats There are only two types of contract formats that the government employs in most contracts, depending on the method of service acquisition. Uniform Contract Format This format is used when services and supplies are acquired using the negotiated method of contracting. This normally happens when the items being acquired are not commercial. There are certain items that the government is not required to use this type of contract for. They include construction or architecture contracts, subsistence, letter request for proposals and contracts exempted by designee. The format comprises four parts, i.e., schedule, contract clauses, list of documents and other attachments and representation and instructions. According to Acquisition Community Connection (ACC, 2006), the sections contained in the schedule range from A to H. Section A, which is the contract form, is the cover sheet for contract solicitation. Form (SF) 33 and 308 are used. Section B represents a description of supplies and services that are being acquired. It also describes the quantities required and reflects the cost. Section C is a description of detailed government requirements. Section D describes the packaging methodology to be used. It is done according to the commercial practice in place. Section E describes the measures taken by the contractor to ensure the supplies meet the quality mark of the government. Inspection of the items delivered may be undertaken if allowed by the contract (Compton, 2012, p. 107). Section F is a description of the delivery schedule. It includes the delivery dates and the items and quantities to be delivered. Section G describes the employee responsible for administering the contract. Section H contains any special requirements of the contract. Part two – contract clauses – contains one section (I). This section describes the standard clauses contained in the FAR 52.301 required by law and agency provisions. Part three contains section J, which lists all applicable attachments for the contract. The title, date and number of pages for all documents or exhibits are included. In case the documents are found on the websites, a list of those websites should be attached (ACC, 2006). Part four contains sections K, L, and M. Section K contains representations, certifications and other statements to be submitted by vendors. Section L describes the instructions, conditions and notices given to vendors for submission of proposals. This section describes the contracting method used. Section M is an evaluation for factors for awarding the contract (ACC, 2006). The Uniform Contract Format SECTION TITLE PART 1: The Schedule A Solicitation/Contract Form B Supplies or Services and Prices C Description/ Specifications/ Statement of Work D Packaging and Marking E Inspection and Acceptance F Deliveries or Performance G Contract Administration Data H Special Contract Requirements Part II: Contract Clauses I Contract Clauses Part III: List of Documents ,Exhibits and other Attachments J List of Attachments Part IV: Representations and Instructions K Representations, Certifications and Other Statements to Respondents L Instructions, Conditions and Notices to Offerors M Evaluation Factors for Award Commercial Items Format This is used when the items being acquired exceed a threshold of 150,000 dollars. It contains five sections (Solloway, 2011). Section A is the cover sheet, using the standard form 1449. Section B describes continuation of blocks. Section C describes the commercial contract clauses that are required by FAR 12.301. Section D contains any required documents relating to the contract. Section E describes the provisions put in place regarding solicitations. Solicitation Format for Commercial Items (FAR 12.303) Section A: Cover Sheet Standard Form 1449 – Solicitation for commercial items Section B: Continuation of SF-1449 Block 10 for small businesses set-aside Block 18B for remittance address Block 19 for contract line item numbers Block 20 for schedule of supplies / service Block 25 for accounting data Section C: Contract clauses Contract terms and conditions Clauses incorporated by reference Executive orders Section D: Contract documents, exhibits or attachments Attachment A: description and work statement Section E: Solicitation Provisions FAR 52.212-1 Instructions to offerors Addendum to FAR 52.212-1 FAR 52.212-2 Evaluation of commercial items FAR 52.212-3 offerors’ representation and certifications The difference between the two formats arises in the items being acquired. Uniform contract is used when services and supplies are acquired using the negotiated method of contracting while commercial format is used when commercial items are being acquired. Given this scenario, the best format to use is the uniform contract format. Purpose of the Source Selection Evaluation Plan Plans relating to source selections define the approaches that will be used for evaluating the proposals solicited by vendors. The evaluation of those proposals is done by evaluation teams. The plan hence serves as a guideline to the team during the evaluation. The plan stipulates the role and responsibility of each member of the team. The plan guides the members on the code of conduct to uphold during the evaluation process. The plan covers both the technical and non-technical proposals formulated by vendors in both competitive and non-competitive negotiated acquisitions (Solloway, 2011). Ranking of Criteria NUMERICAL SCORING METHOD The government will use cost price evaluation and past performance evaluation as the basis or criteria for ranking or selecting a vendor. The criteria to be used to select the proposals sent to the government include: Cost price criteria100% Past performance satisfactory or unsatisfactory Discussions: Cost price criteria: The contracting officer is responsible for ensuring the cost and price to the government formulated by the proposing vendors. Analysis of cost realism is done to ensure that the prices identified are proportional to the requirements developed in the technical approach. The contracting officer is justified to take the corrective action stipulated if the price proposal contains unbalanced and unrealistic costs or prices. The costs relating to both the base year and the option periods are evaluated (Solloway, 2011). Conclusion The paper has introduced the concept of small business program and its purpose. The paper has also outlined the business that fits to be termed as a small business and those that are allowed to participate in the program. The paper has evaluated the set-aside program and denoted the criteria used in selecting businesses to benefit from this program. Analysis of contract formats has been done, where the two formats have been evaluated. The format recommended for this type of contract is the uniform contract format. Finally, the paper has outlined the evaluation plan for source selection and ranked the criteria for such a plan. References ACC. (2006). Uniform contract format. Acquisition Community Connection. Compton, P. B. (2012). Federal acquisition: Key issues and guidance. USA: Management Concept Inc. Government Contracting. (2012). Small business government contracting initiative. USA: BizFilings-Small Business Administration Office of Technology. O'Connor, T. M., & Wangemann, M. A. (2009). Federal contracting answer book. USA: Management Concepts Incorporated. SBA. (2013). Women-owned small businesses. WOSB certification (SBA Form 2413).USA: Small Business Administration. Solloway, C. D. (2011). Source Selection step by step: A guide for every member of the acquisition team. USA: Management Concept Inc. Read More