Small Business Administration Mentor-Protege Program Expansion

There are several pending regulatory changes previously designated by the SBA for release this year, including a rule that will clarify the agency’s suspension, revocation and debarment procedures for contracting agents, and another that will ease eligibility requirements for the Historically Underutilized Business Zones Program, which covers businesses located in certain “historically underutilized business” areas.

But the upcoming change that has prompted the most interest for many contractors  is a pending final rule expanding the SBA’s Mentor-Protege Program, first floated in a February 2015 proposed rule.

The program allows small businesses to partner in a joint venture with a larger mentor business that can provide advice and assistance, for instance to help win or implement larger or more complex deals that the small businesses lack the resources to win on their own, while still maintaining eligibility for federal small-business set-aside contracts.

Currently, the program is limited to businesses that participate in the SBA’s 8(a) Business Development Program, which provides assistance for small businesses majority-owned and -operated by “socially and economically disadvantaged” individuals, but is expected to be extended to all businesses otherwise eligible for set-aside contracts under SBA rules.

While the exact shape of the program expansion has yet to be announced, SBA officials have most recently hinted that the rule should be finalized at some point in July, and have indicated that the program’s terms should be effectively identical to the current 8(a) Mentor-Protege Program.

If those prescriptions hold, then the program’s expansion will be overwhelmingly welcomed throughout the small-business contractor community.

Procurement Lobbying

There are two main types of lobbying, the exact legal definitions of which vary from state to state. The first type of lobbying is direct lobbying. In general terms, direct lobbying involves a person or entity attempting to influence legislation in a way that favors the client. Direct lobbyists typically interact with legislators or government employees involved in creating legislation.

The other main type of lobbying is known as grassroots lobbying. Grassroots lobbying focuses on influencing public opinion in favor of  or opposition to particular legislation. This type of lobbying also encourages members of the public to take action themselves in a variety of ways, such as by contacting their elected officials or signing petitions.

Often ignored by the vendor community is Procurement lobbying. This is of particular importance as federal, state, and local governments purchase trillions of dollars in goods and services.

Procurement lobbying involves appreciating:

  • all procurement lobbying laws in the 50 states, the federal government, and more than 230 municipal jurisdictions, along with common-language descriptions of these same ordinances and statutes.
  • advisory opinions interpreting lobbying laws
  • pay-to-play laws on every government level
  • full descriptions of registration and reporting requirements
  • jurisdictions requiring registration as a lobbyist for procurement activities
  • contingent lobbying prohibitions by jurisdiction
  • summaries of gift laws;

and pre-RFP pursuit, meaning shaping upcoming procurements in conformity with the above points.

It can be difficult to find the right person to talk to in Government Agencies and companies. That’s a major reason why people don’t do pre-RFP pursuit. It’s also why many companies are in perpetual sales mode.

Before you can influence the RFP or gain pre-RFP customer insight, you have to make contact with the right people at the customer. Here are some ways to do that:

  1. Past contracts. Sometimes the best source of data about future purchases starts by identifying who the buyers were for similar purchases in the past. So start with mining the data and looking up past contracts through online databases. The points of contact may not always be up to date, but it’s a good place to start.
  2. Associations. What associations might the customer belong to? Do they publish their membership or attendee lists? Do they hold meetings where you might meet face to face? Do they publish presentations or documents that might mention names?
  3. Councils, standards setting organizations, and committees. Are there any other organizations the customer might participate in? In addition to their membership list, do they publish minutes or other documents that might provide insight or contacts?
  4. LinkedIn profiles. Can you find your points of contact on LinkedIn? If you do, can you find their co-workers and business partners? In addition to searching by demographics, you can also search by acronyms, technical terminology, program names, functional terminology, etc.
  5. LinkedIn groups. Look up what groups on LinkedIn your customers have joined. If they post, see what you can learn. If they read, you have an opportunity to put words in front of them. Just simply knowing what groups they are in can provide insight. If you can’t find your customers’ profiles on LinkedIn, maybe you can find them in a relevant group.
  6. Trade shows and events. What trade shows and events do they host or participate in? Can you get introduced? Can you meet face to face? What can you learn? What can you demonstrate?
  7. Websites and org charts. Does the customer have a website? Does it name names? Does it have an org chart that can help you navigate? Can you do an image search for a relevant org chart?
  8. Publishers. There are companies that research, aggregate, and publish databases that include customer contact information. Some can save you a huge amount of time.
  9. Google. Learn how to use Boolean search operators. Then combine fragments of names, email addresses, titles, projects, technology, locations, etc. to see if you can find the needle in the haystack.
  10. Freedom of Information Act (FOIA).  If it’s a Government customer, you can try doing a FOIA for rosters, staff directories, points of contact, organization charts, committee memberships, attendance lists, etc.
  11. Teaming partners. Who do your subs or primes know? Can you get a referral or introduction?
  12. Alumni. Not yours. Theirs. Where did they go to school? Can you track them down through Alumni organizations or discover someone else who knows them?
  13. Certification registries. If their job requires specific certifications, are there lists or registries of people with that certification?
  14. Look for coordination points. Where does the customer’s organization need to coordinate with the outside world? That’s where people will be visible.
  15. Look for common interests, platforms, tools, and requirements. Show interest in their interests. Be where they will be. Then be helpful when they arrive.

Procurement Lobbyists can assist with all 15 approaches but most importantly they bring years of personal networking: a wide cast of personal relations to allow you to expand your network. Because it’s not about selling. It’s about getting to know each other and working together. It’s about professional development

Two More States Edging Closer to Passing Transportation P3 Legislation

Bills making their way through state legislatures in Tennessee and Kentucky could allow governments in both states to begin developing transportation projects through public-private partnerships. Kentucky’s legislation would allow this procurement method to be used for other public projects as well.

Legislators in Nashville are considering SB 2093, which would authorize local and state governments to pursue P3s and give partners the power to seek loans, purchase rights of way and collect fees. The  bipartisan bill also permits developers to submit unsolicited proposals but includes a 90-day period during which other firms can submit competing proposals.

One project that could be built through a P3 is a $5.4 billion bus rapid transit line connecting Nashville and Clarksville, reported “The Tennessean”. Neither sources of funding nor proposed alternatives have been identified but legislation introduced last year that would allow the metropolitan transit system to charge customers a fuel tax to fund them will be considered this spring.

Kentucky is considering two identical bills that would permit state and local governments to use P3s develop capital projects, such as public roads, bridges and parks. Projects worth more than $25 million would require the General Assembly’s approval, reported CN׀2 Pure Politics.

HB 309 or SB 132 may stand a stronger chance of passing than a similar bill that then-Gov. Steve Beshear vetoed in 2014 because it called for the imposition of tolls to pay for the replacement of Brent Spence Bridge connecting Kentucky and Ohio. The new legislation explicitly prohibits the imposition of tolls on interstate highway projects between the two states.

 

Cooperative purchasing as a public contracting concept.

Rather than each governmental entity endlessly repeating a time-consuming full-and-open competitive process for every buy, cooperatives conduct competitions for multiple award contracts, creating a contractual framework and facilitating faster, lower-cost competitions at the order level. In some cases, cooperatives also are able to aggregate requirements and pool money, lowering costs for both buyers and sellers.

There are three main purchasing co-ops operating nationally for U.S. nonfederal government and other nonprofit entities in addition to the federal cooperative purchasing program run by GSA. These purchasing co-ops allow for technology manufacturers, distributors, resellers and dealers to participate. And a glance at the products and services they offer shows they quickly adapt to changing IT market conditions by including cloud, cybersecurity and other software services.

NASPO provides the broadest-ranging purchasing co-op in terms of commodities offered. Its ValuePoint site brings together multiple award programs established by a single lead state, but made available to all 50 states and the District of Columbia. It also maintains a list of upcoming procurements and the states creating them. So while there is a lead state for each commodity, ValuePoint provides a single clearinghouse for a variety of commodities and multiple-award contract programs for everything from fire trucks to public cloud hosting services (lead state: Utah) and commercial off-the-shelf software products (lead state: Arizona).

Dating back to 1982 as the Michigan Collegiate Telecommunications Association, MiCTA has branched beyond its original charter — to serve as a forum to share information among universities — into a state and municipal acquisition association for a variety of network products.

These products include hardware such as switches and other data center equipment, and services such as voice over Internet protocol (VoIP), cabling and voice/video conferencing. MiCTA is based in Saginaw, Mich. Buying entities pay a small fee to belong to MiCTA, and its membership spans all 50 states. Some states themselves are members, as are many county and city governments.

A third purchasing co-op arrangement, U.S. Communities Government Purchasing Alliance, dates to 1996. It grew from a partnership between the Association of School Business Officials, the National Association of Counties, the National Institute of Governmental Purchasing, the National League of Cities and the U.S. Conference of Mayors. Customers are public schools and colleges, nonprofits, and state and municipal agencies. Like NASPO ValuePoint, U.S. Communities carries no membership fees. It works similarly to ValuePoint in that a single agency forms the lead for a particular technology or service contract, but the contract is available for all of U.S. Communities members. Technology contracts in place include several cloud providers, document and print services, telecommunications, and systems integration services. It claims 90,000 buying organizations are members.

Then there is the federal buying cooperative operated by the General Services Administration. For decades, Congress barred GSA from offering its multiple-award schedule contracts for use by nonfederal government entities. Why? For many years, coalitions of resellers, led by fire apparatus dealers, said such an arrangement would destroy the local markets they enjoyed for supplying nationally marketed capital equipment. That concern faded, or at least Congress avoided a vocal constituency by enabling GSA to offer Schedules 70 (IT goods and services) and 84 (security, law enforcement and, yes, firefighting and rescue equipment).

GSA has added several more narrowly focused schedule-based blanket purchasing agreements, including those for continuous network diagnostic and mitigation services and wireless voice/data products. From the early days, GSA structured the schedules as centrally managed contracts and catalogs that can also include participation by local dealers.

GSA markets these purchasing cooperatives to state, local and tribal governments and while the program is gradually growing, it only accounts for about $1 billion per year. Clearly it suffers a bit from state-specific cooperative programs where contracts are based on the GSA schedule and managed for the benefit of in-state cities, counties and educational institutions structured to avoid paying fees back to GSA. Thus we see that competition between the various cooperative purchasing programs is quite robust.

It would appear that cooperative purchasing as a public contracting concept is here to stay and will only grow as more buying entities become more comfortable with leveraging framework contracts managed by others.

Reverse Auctions Once Again Questioned by Lawmakers’

Lawmakers are once again marshaling arguments to restrict the contracting tool called a reverse auction, criticizing agency reliance on a practice dominated by a single private firm at a Thursday hearing of the House Small Business subcommittee.

Rep. Richard Hanna, R-N.Y., who has introduced H.R. 1444 to limit reverse auctions, said that allowing contractors to bid electronically with increasingly lower prices to provide goods and services creates “a race to the bottom” that neither assures quality nor helps channel work to small businesses. “When reverse auctions are used properly, they can save taxpayer dollars,” Hanna said. “Unfortunately, some agencies have used reverse auctions in a manner that evades vigorous competition and contractor protections.” (Credit AP).

Use of the tool at agencies such as the Veterans Affairs Department is dominated by a single Vienna, Va.-based firm called FedBid, which has become controversial for its lobbying practices. The Office of Federal Procurement Policy has been collecting data on the practice, but has yet to issue guidance, noted the panel’s ranking member, Rep. Nydia Velazquez, D-N.Y. (Credit AP).

Dan Gordon, the former administrator of the White House procurement shop now teaching law at  George Washington University, said the best study on the subject—a December 2013 Government Accountability Office report—showed uncertainty as to whether reverse auctions save money or steer work to smaller businesses. “If all you care about is prices, then reverse auctions are for you,” Gordon said.  “But there is also past performance and quality” to consider.  (Credit AP).

He noted that FedBid conducts more than 99 percent of the auctions announced on the government’s FedBizOpps website, “so it’s pretty darn close to a monopoly” in performing a function that, Gordon added, “is closely associated with inherently governmental functions.” (Credit AP).

Because FedBid controls the data — a conflict of interest, he said — agencies often don’t know what fees they’re paying. Sometimes it’s nothing because FedBid waives it. “FedBid does an excellent job,” Gordon said. “So good that agencies say, ‘Let’s go for it,’ which means federal officials are abdicating their responsibility.” (Credit AP).

Private sector witnesses representing veterans and women’s groups promoting small business opportunities were also skeptical, with Davy Leghorn from the American Legion calling reverse auctions “a short cut used because there aren’t enough contracting officers.” (Credit AP).

Hanna’s bill, which he hopes to move out of committee soon, assumes that reverse auctions are “best suited to buying well-defined commodities, but not skilled services with a high degree of variability,” according to a summary. It would ban their use for the procurement of “subjective services like construction and design, as well as products that prevent bodily harm, such as body armor. This would force agencies to use one of the other approved contracting processes, such as a sealed bid procurement or a negotiated procurement when a contract is suitable for award to a small business, or when the procurement is made using a small business program.” (Credit AP). The bill would also require more training of contracting officers in the use of reverse auctions.

FedBid, which did not testify, said in a statement to Government Executive that its leaders were disappointed that no one from the company or industry was invited to the hearing.

”FedBid feels strongly that reverse auctions, when used appropriately, do in fact increase access and opportunity for small business contractors, allowing them to compete on a level playing field,” the statement said. “FedBid does not believe that reverse auctions in any way ‘abdicate’ a contracting officer’s responsibility; rather, they are a tool that they can use as part of their process, rather than a replacement for that process.” (Credit AP).

The firm, which is headed by former Office of Federal Procurement Policy Administrator Joe Jordan, said it supports language from the 2015 Defense authorization bill requiring more training and clarity around the use of reverse auctions.

A Rising Need

New Jersey needs to join the ranks of more than 30 other states with broad legislation permitting public-private partnerships (P3s) for transportation projects.

There are many models out there to choose from- including Virginia and Florida and Pennsylvania.

A Public and Private Partnerships for Transportation Act should minimally allow for the Department of Transportation DOT and other public transportation entities to partner with private companies to finance, deliver, operate and maintain transportation-related projects. P3s may receive all or a portion of the revenue generated (such as via tolls or user fees) in exchange for providing services or facilities. The law should apply to the construction of new transportation facilities and the improvement of existing facilities.

Under the law, the state would, for instance, retain ownership of a busy roadway while a private firm in a P3 would build new express lanes along that roadway. Following construction, the private firm would receive a return through tolling drivers who use the express lanes.

The law should create an independent Public-Private Transportation Partnership Board, to review and approve P3 projects. Private investors ought to be able to pitch their ideas to the board, in a manner prescribed in approved guidelines for considering both solicited and unsolicited proposals. If the board determines that a state operation would be administered more efficiently by a private company, the private company will be authorized to submit a proposal and enter into a contract to either completely or partially take over that operation for a defined period of time.

Proposals for P3s will be evaluated on the basis of pre-established criteria with assigned weights, including: cost; financial commitment; innovative financing; technical, scientific, or socioeconomic merit; public reputation, qualifications and financial capacity of the private entity; ability of the project to improve economic growth, improve public safety, reduce congestion, increase capacity or rehabilitate, reconstruct or expand an existing transportation facility; and other factors deemed appropriate by the public entity.

For unsolicited proposals, private entities are encouraged to request one-on-one meetings with DOT’s P3 office and/or a public transportation entity to discuss potential proposals before submission. As part of such one-on-one meetings, the P3 office and/or public entity may provide informal feedback. A formal review of an unsolicited proposal will only be undertaken once a private firm makes a formal submission.

An unsolicited proposal must contain information that is sufficient for the P3 office and/or public entity to evaluate the merits of the proposed project. Such information includes the capability of the private entity to deliver the project, the financial viability of the project and the benefits to the state of New Jersey and the public entity of a P3 delivery method over a conventional method. The board would need to promulgate an implementation manual identifying  any additional categories of information that all unsolicited proposals must contain.

It would seems prudent that the board and the P3 office established limited times- say, May and October as the only two months the state will receive unsolicited proposals.

In addition, New Jersey should seek sponsorship proposals for the state’s welcome centers and rest areas, environmental and engineering services, including project management services.

The law provides unique opportunities for private companies in various industries, including construction and communications. P3s should stimulate private investment in public highways, bridges and other facilities, where governments confront funding restraints.

Summary of Benefits and Limitations of Public-Private Partnerships

Potential Benefits

  • Transfer project risks to private partner.
  • Greater price and schedule certainty.
  • More innovative design and construction techniques.
  • “Free up” public funds for other purposes.
  • Quicker access to financing for projects.
  • Higher lever of maintenance.
  • Keep project debt off government’s books.

Potential Limitations

  • Increased financing costs.
  • Greater possibility for unforeseen challenges.
  • Limits government’s flexibility.
  • New risks from complex procurement process.
  • Fewer bidders.

Major Risks Transferred in Public-Private Partnership Agreements

Financing Risks

  • Changes in financing costs.
  • Estimated and actual inflation.

Design and Construction Risks

  • Interface between design and construction.
  • Discovery of endangered species.
  • Discovery of archeological, paleontological, or cultural resources.
  • Discovery of hazardous materials.
  • Unknown utility lines.
  • Delays in getting permits approved.

Operation and Maintenance Risks

  • Facility requires more maintenance than planned.
  • Facility is more costly to operate than planned.
  • Standards or requirements imposed in the future.

Revenue Risks

  • Usage of the facility is lower than predicted.
  • Public less willing to pay user fees than projected.

Tough times often lead to a new way of viewing common problems: how to create jobs, for example, and how to keep the economic machine moving. The American Recovery and Reinvestment Act of 2009 is just one of several indicators suggesting that the U.S. government is seriously considering the need to look to novel programs to both update crumbling infrastructure and stimulate the economy. These alternatives may be all the more attractive when the public sector is faced with more and more debt and competing priorities for borrowing capacity.