Developing your strategy to win government contracts is like putting together a 1,000 piece puzzle. It requires time and understanding a lot of rules.
This week we are demonstrate how the rules related to small business set-asides is the first step establish the framework for your strategy.
Socioeconomic Considerations – The Small Business Reservation
This rule reserves contracts greater than the micro purchase threshold ($10,000 in 2021) and that are less than the simplified acquisition threshold ($250,000 in 2021) for award to a small business. For this rule to apply, the contracting officer must believe that at least two or more small businesses CAN perform the work. And are likely to submit offers to WIN the work. This is referred to “as the rule of two”. Awards can be made to ANY small business regardless of any additional socioeconomic classification such as women-owned.
These contracts are awarded using simplified acquisition procedures (SAP). SAP awards typically allow for more informal solicitation and award processes. These types of awards benefit small companies that haven’t yet developed more sophisticated processes to win government contracts. More on this later.
But what about the VA? Don’t they have special rules?
Yes. If the VA is the agency that spends the most on your product or service, you must consider the VA rule of two. This rule is similar to the “rule of two” we explained earlier. The difference is that the VA MUST first contract with Service-disabled veteran owned small businesses (SDVOSB) any time two or more SDVOSBs CAN PERFORM and ARE LIKELY to compete. If NO offers are received from any SDVOSB the solicitation will be cancelled.
After this happens, if the VA believes there are two or more veteran-owned small business (VOSB) that CAN PERFORM and ARE LIKELY to compete they reissue the solicitation as a VOSB set-aside.
If NO offer is received from any VOSB then the solicitation will be cancelled again and either set aside for small business competition or for full and open competition to include large businesses.
If your business qualifies as an SDVOSB or a VOSB, you want to carefully examine what this agency buys and how they buy it when finalizing your strategy. All other factors being equal, you may have a real advantage over businesses that are NOT owned by veterans.
If your business is not an SDVOSB or a VOSB, and the VA is your best prospect, there are two options. Form an alliance with a veteran owned firm or ask the Contracting Officer if a tiered strategy would ever be considered.
What is a tiered set-aside strategy?
A tiered strategy avoids delay in awarding a contract when it is not evident that sufficient competition exists among either SDVOSBs or VOSBs. There are three types of tiered strategies. The first sets the requirement aside for SDVOSB competition. However, the solicitation allows VOSBs to also submit a proposal. If no SDVOSB bids, award CAN be made to the VOSB. This eliminates the need to resolicit when SDVOSB offers are not received.
The second tiered strategy is similar. In this strategy all small businesses may submit proposals. In the event that neither an SDVOSB nor a VOSB bids, then the CO may award to a small business without issuing a new solicitation. The third strategy allows all businesses to compete and also eliminates the need for issuing a new solicitation in the event that no SDVOSB or VOSB submits a bid.
Use of a tiered strategy is not mandatory. Some contracting officers will embrace the efficiency this offers while others find it too cumbersome.
If your market intelligence shows that SDVOSBs nor VOSBs may not be able to perform and are unlikely to submit an offer, you should certainly ask the CO about this strategy.
Other socioeconomic considerations.
There are too many ways to leverage any small business status to discuss in a single blog post.
But, recognize that once a requirement is “set-aside” for competition among one of the small business categories, it usually remains set-aside.
And in fact, if the requirement is currently competed under the 8(a) program it will generally remain in that program. If your company is not in the 8(a) program and a contract you are interested in is currently competed via the 8(a) program, you need an alliance with an 8(a) firm.
Contracting Methods and Action Type
The major contracting methods are purchase orders, definitive contracts, indefinite delivery contract (IDC), Blanket Purchase Agreements (BPA), Federal Supply Schedules (FSS), Basic Ordering Agreements (BOA), and Government Wide Acquisition Contracts (GWAC).
Each method represents a different way of winning government contracts. And each represents a nuance and a potential tactic that needs to be considered in putting together your strategy.
As stated earlier, many small businesses focus on pursuing contract awards that were previously made using simplified acquisition procedures.
Why is SAP the place to start?
- These requirements are reserved for award to small businesses whenever possible
- The contracting officer has a lot of flexibility in how to solicit for, select and award contracts using these procedures.
- This generally makes it easier for smaller companies to compete effectively.
And this is where we will continue putting together the strategy puzzle in the next post.
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