Developing an Effective Compliance Program for Government Contracting
In this document, you will find detailed information on regulatory updates and requirements for government contracting, including the Small Business Jobs Act of 2010, subcontracting guidelines, size and status integrity regulations, and penalties for misrepresentation. Learn about compliance review issues and the importance of managing subcontracting programs effectively to ensure adherence to government standards and guidelines.
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Presentation Transcript
Amy Kim, Commercial Market Representative (CMR) Area 2, OFFICE OF GOVERNMENT CONTRACTING
Subcontracting Program Whats New? Developing and Managing an Effective Compliance Program Compliance Review Issues Pursuant to Government Contracting
Regulatory Updates Regulatory Updates SBA amended its regulations to implement the Small Business Jobs Act of 2010. Size and Status Integrity (Effective August 27, 2013) Small Business Subcontracting (Effective August 15, 2013)
Size and Status Integrity 13 CFR 121.411 Size and Status Integrity 13 CFR 121.411 Presumption of loss based on total contract value for misrepresentation Certifications Deemed Affirmative, Willful and Intentional Proposal or bid submission for contracts/subcontracts reserved, set aside, or classified as intended for SB award Proposal or bid submission which encourages agencies to classify bid/proposal as SB award Registration on Federal electronic database for SB award consideration Affirmative, Willful and Intentional Effective August 27, 2013
Size and Status Integrity 13 CFR 121.411 Size and Status Integrity 13 CFR 121.411 Signature Requirement: Authorized official must sign certification on same page containing size status Limitation of Liability: Primes acting in good faith not be held liable for sub misrepresentation Penalties for Misrepresentation: Suspension or debarment; civil and criminal penalties
Subcontracting 13 CFR 125.3 General Credit cannot be taken for lower-tier subcontract awards. Exclusions from the subk base: Purchases from affiliates (Note: Subcontracts by first-tier affiliates should be included.) Internally-generated costs, taxes and charitable contributions CO may establish additional percentage of total contract dollars. History of unjustified three Subcontracting 13 CFR 125.3 General additional subk goals as unjustified untimely or reduced payments three incidents in a 12 12 month period. Effective August 15, 2013
Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Prime may not prohibit sub from discussing any payment or utilization issues with CO. SSRs must include indirect costs on a prorated basis. Prime must assign each subcontract the NAICS code and size standard. Prime may rely on SAM IF IF subcontract contains a clause (similar to FAR 52.204-8(d)). However, primes may not require the use of SAM. When ISR or SSR is rejected by CO, prime is required to revise report within 30 days.
Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Prime must represent that it will make a good faith effort to utilize the SB subs in the same scope, amount or quality Prime must notify CO in writing whenever the prime contractor does not utilize a SB sub in the same scope, amount or quality proposal prior to final invoice submission or contract close-out. (Section 1322 of the SB Jobs Act) scope, amount or quality used in preparing bid or proposal. scope, amount or quality used in preparing its
Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Offeror used a SB in preparing bid or proposal if: 1) SB was referenced in bid or proposal or subk plan; 2) Subcontract or agreement in principle to subcontract with SB to perform contract; or 3) SB drafted bid or proposal or its pricing or technical information was used in preparing bid or proposal, with written evidence of intent or understanding that SB would perform related work if offeor receives award. Responding to RFQ does not constitute use in preparing bid or offer.
Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Subcontracting 13 CFR 125.3 Prime Contractors Responsibilities Prime is required to notify CO in writing of any reduced or late (90 days past due) payments to a SB subcontractor. (Section 1334 of the SB Jobs Act) Prime must provide CO with explanation for goal shortfalls at contract completion.
Subcontracting 13 CFR 125.3 CO s Responsibilities Subcontracting 13 CFR 125.3 CO s Responsibilities CO is responsible for reviewing all ISRs and SSRs in eSRS within 60 days after reporting period ends. CO must evaluate whether prime has made a GFE to comply with SB subk plan. CO is responsible for evaluating prime s written explanation concerning its failure to utilize a SB sub for past performance purposes. CO must record identity of prime with history of unjustified untimely or reduced payments in FAPIIS.
Subcontracting 13 CFR 125.3 CO s Responsibilities Subcontracting 13 CFR 125.3 CO s Responsibilities CO has discretion to request an updated subk plan in connection with an option. CO must require prime to submit a subk plan if mod causes contract value to exceed $650K. (except for commercial plan holders). CO has discretion to request a subk plan if prime s size status changes to other than small as a result of size recertification.
Subcontracting 13 CFR 125.3 Subk Subcontracting 13 CFR 125.3 Subk Consideration in Source Selection Consideration in Source Selection CO may include evaluation factor in solicitation to consider: Prime s subk plan compliance (either part of past performance factor or stand-alone evaluation factor) Prime s commitment to pay SB subs within specific number of days after payment receipt from Gov t May apply to solicitations for orders against MAS contracts, GWACs, or MACs, BPAs or BOAs.
Subcontracting 13 CFR 125.3 MAC Reporting Subcontracting 13 CFR 125.3 MAC Reporting Ordering agency should receive credit towards its SB subk goals for orders awarded under another agency s contract. Contracting agency will still be responsible for subk plan for underlying IDIQ contract. Contractors are required to submit subk reports for individual orders to funding agency. (eSRS and FAR will have to be revised.) Funding agency may establish SB subk goals for individual orders, BPAs and BOAs.
Regulatory Updates Regulatory Updates FAR Final Rules SDB Preference Program Some FAR clauses have been removed. FAR Clauses FAR 52.219-22 through 219-26 FAR Clauses Description SDB price evaluation & participation targets YE SDB report SDB Participation Report Description FAR 52.219-9(l)(2)(iii) FAR 53.302-312 Monetary incentives for SB subcontracting and consideration of SB subcontracting as evaluation factor remain. Primes under DoD and Coast Guard contracts can no longer count subcontracts with HBCU/MI towards SDB goals; only allowed under NASA contracts. Effective October 14, 2014
Regulatory Updates Regulatory Updates NDAA 2014 Credit for Subcontractors Allows single award prime contractors with one agency to count all tier small business subcontractors. Prime contractors with more than one contract with one or more agencies may only count first tier subcontractors. Primes are required to make a good-faith effort to achieve first tier subcontracting goals.
Ten Key Elements of Effective Small Business Program Ten Key Elements of Effective Small Business Program Management Support An active SBLO An acceptable Subcontracting Plan SB training Meeting SB goals and objectives A good outreach program Connection to assistance providers such as PTAC Active procurement staff participation Utilization of SAM and DSBS Accurate and on-time reporting
Management Support Management Support SCORE GUIDE 1 = No Management Support 3 = Management has minimal program knowledge. 5 = Management knows about the program. 7 = Management actively endorses the program. 9 = Management endorses, monitors, and participates in the program. SCORE GUIDE My company score is: 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Mark Score Here: __________
An Active SBLO An Active SBLO SCORE GUIDE 1 = Our company does not have an SBLO. 3 = Our SBLO performs very limited duties. 5 = Our SBLO is involved in at least 5 of the success elements. 7 = Our SBLO is involved in 7 of the success elements. 9 = Our SBLO does all 10 elements. SCORE GUIDE My company score is: 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Mark Score Here: __________
An Acceptable Subcontracting Plan An Acceptable Subcontracting Plan SCORE GUIDE 1 = My company does not have a subcontracting plan. 3 = Our subcontracting plan was not approved by the agency. 5 = Our subcontracting plan is current and approved by the agency. 7 = Same as 5 and we are actively working on our goals. 9 = Same as 5 and we are meeting our plan goals. 10= Same as 5 and we are exceeding our plan goals. SCORE GUIDE My company score is: 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Mark Score Here: __________
SB Counseling and Training SB Counseling and Training SCORE GUIDE 1 = My company does not have a SB counseling and training program. 5 = We have scheduled SB counseling and training in the next 6-12 months. 10= We have an on-going SB counseling and training program. SCORE GUIDE My company score is: 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Mark Score Here: __________
Meeting SB Goals & Objectives Meeting SB Goals & Objectives SCORE GUIDE 1 = My company has no goals or objectives for small business. 3 = Employees are aware of subcontracting goals. 5 = Management has established company small business goals. 7 = Company goals are established and metrics reported. 9 = Same as 7; most goals are being met. 10= Same as 7; all goals are being met or exceeded. SCORE GUIDE My company score is: 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 Mark Score Here: __________
A Good Outreach Program A Good Outreach Program SCORE GUIDE 1 = Our company does not do outreach. SCORE GUIDE My company score is: 3 = Our company does limited outreach. 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 5 = Our company has an active outreach program. 7 = Our company has an active outreach program and has participated in one or more matchmaking events. 9 = Same as 7; we have connected to sources through this process. Mark Score Here: __________
Connection to SBA, Agency Small Business Office or PTAC SCORE GUIDE 1 = What is a PTAC? My company score is: Small Business Office or PTAC? 1 2 3 4 5 6 7 8 9 10 SBA, Agency SB Office or PTAC. 7 = Same as 5, and we work with our state PTAC. Mark Score Here: __________ matchmaking sub-committees hosted by these organizations. Connection to SBA, Agency Small Business Office or PTAC SCORE GUIDE 3 = How do I connect with SBA, Agency 1 2 3 4 5 6 7 8 9 10 5 = Our company occasionally contacts 9 = Same as 7 and we are on
Active Procurement Participation Active Procurement Participation SCORE GUIDE SCORE GUIDE 1 = Procurement staff is untrained. My company score is: 1 2 3 4 5 6 7 8 9 10 3 = Procurement staff is aware. 1 2 3 4 5 6 7 8 9 10 5 = Procurement staff is active. 7 = Procurement staff is making tangible efforts to expand opportunities for SB. 9 = Same as 7 and procurement is meeting the goals. Mark Score Here: __________
Utilization of SAM or DSBS Utilization of SAM or DSBS SCORE GUIDE 1 = What are SAM or DSBS? SCORE GUIDE My company score is: 3 = How do I use SAM or DSBS? 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 5 = SAM and DSBS are used to identify SB sources and verify certifications. 7 = Our staff uses SAM/DSBS to identify SB sources and checks our database against SAM/DSBS regularly. 9 = Same as 7 and we are compliant. Mark Score Here: __________
Accurate and On Accurate and On- -Time Reporting Time Reporting SCORE GUIDE 1 = Reporting What reporting? SCORE GUIDE My company score is: 3 = What is an ISR? 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 5 = ISRs and SSRs are submitted. 7 = Same as 5 and all data is accurate. Mark Score Here: __________ 9 = Same as 7 and reports are submitted on time.
How did your company rate? How did your company rate? SCORE CHART 10 29 points Unacceptable 30 49 points Marginal 50-69 points Acceptable 70 90 points Highly Successful 91 100 points Outstanding SCORE CHART 1. _____ 2. _____ 3. _____ 4. _____ 5. _____ 6. _____ 7. _____ 8. _____ 9. _____ 10. _____ Total: ______ Note: This approximate score rating is subject to other factors and a formal review by Federal agencies. Individual results may vary.
Small Business Sourcing Validation of the ISR/SSR reports Five-Year Trend Analysis Overall Evaluation of Small Business Program Analysis on Goal Achievements Sampling of PO s to Large Business Follow-up prior SBA recommendations
Size Standards and Self-certifications Size self-certification definitions must be correct. (FAR 52.219-8) Must have a size self-certification for every business you are counting small on ISR/SSR. No reliance on SAM SBA certification required for HUBZone SB Size and socio-economic status determined at initial offer that includes price Good for contract duration Foreign business must meet the definition of SB in order to count small (13 CFR 121.105)
eSRS Reporting (Overall) May count a SB that meets subset definitions in all categories that apply. What not to include: Subcontracts performed exclusively overseas (State Dept exempt from this requirement) Inter-company transactions What to include: Customer-directed purchase First-tier subcontractor spend Subcontracts to non-profit organizations Do not see a contract? Contact the CO to revise FPDS records When options are exercised, revise goal dollars and goal percentages.
ISR Reporting for Option Years ISR Reporting for Option Years 5 Year Base Goals 5 Year Base Goals Option Year One Option Year One 5 5 Year Base + 1 YR Option Goals Year Base + 1 YR Option Goals Total Subcontracting $100,000 100% $25,000 100% $125,000 100% ($30,000+ $3,000) ($15,000+ $1,000) ($15,000+ $2,000) ($5,000+ $500) ($3,000+ $500) ($2,000+ $120) SB $30,000 30% $3,000 12% $33,000 26.4% SDB $15,000 15% $1,000 4% $16,000 12.8% WOSB $15,000 15% $2,000 8% $17,000 13.6% HUBZone SB $5,000 5% $500 2% $5,500 4.4% VOSB $3,000 3% $500 2% $3,500 2.8% SDVOSB $2,000 2% $120 0.48% $2,120 1.7%
eSRS Reporting (ISR) Submit ISR although no subcontracting with SB has been done. No task order reporting Final ISR needs to be submitted within 30 days of contract completion. Provide explanation for goal shortfalls in the Remarks section CPARS
eSRS Reporting (SSR) Maintain separate accounting if your company has a combination of individual and commercial plans. Must include a proportional share of indirect costs incurred with socio-economic category. Must be signed by the most senior executive of the organization.
Effectiveness of Small Business Program Procedures and up-to-date CEO policy memorandum regarding the Small Business Program must be in place. Documentation of training, outreach efforts, and SB assistance Non-Compliance with FAR 52.219-9(d)(11)(iii) and 52.219-9(d)(9) Subcontracts to LB over $150K are not documented to show prime s efforts to solicit and make award to SB Obtain a subcontracting plan & ISR from LB subs when the subcontract exceeds $650K. (Not required if the prime contract contains FAR 52.212-5 or 52.244-6).
CMR CMR Your Great Resource! Your Great Resource! Amy Kim (Covering MD and DC primes) E-mail: amy.kim@sba.gov Phone: (202) 205 - 6895 Anita Perkins (Covering VA, DC, eastern PA and DE primes) E-mail: anita.perkins@sba.gov Phone: (202) 205 - 7319 Other CMRs (Geographic Coverage): http://www.sba.gov/content/government- contracting-field-staff-directory
