CVOBlog: The FAR Rule Small Business Head Fake!
Saturday, September 04, 2010
Posted by: Chief Visionary Blog (www.chiefvisionaryblog.com)
The FAR Rule Small Business Head Fake:
Hooray! We increased the Simplified Acquisitions threshold!
(Pay no mind to the Subcontracting bar being raised, too.)
Recent changes to the FAR will likely have a significant impact on small businesses, for better and for worse.
Make sure you pay close attention or you might miss what is about to take effect at the beginning of FY2011.
The Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council (Councils) recently issued a final rule amending the Federal Acquisition Regulation (FAR) that will take effect on October 1, 2010 (Reference: FAC 2005-45, FAR case 2008-024).
The changes were a combination of statutory and non-statutory changes to the Simplified Acquisition and Prime Subcontracting Thresholds, which directly impact small businesses and how they do business. Here’s a brief summary.
Simplified Acquisitions Threshold
This was changed from $100,000 to $150,000. So why should you care? For small businesses, SAP opportunities, like MicroPurchases, are a great way "to get a foot in the door” with a prospective federal customer. Lower dollar amount, lower risk on their part and increased likelihood they might be willing to take a chance on a new company, small company (or a combination of the two).
According to FPDS, there have been over 400,000 contract actions this fiscal year that were awarded (competitively or non-competitively) using Simplified Acquisition Procedures. The amount awarded to date? $6,052,734,983.00. Not too shabby. Additionally, if you read the scope of Part 13 of the FAR, it states: 13.002 Purpose. The purpose of this part is to prescribe simplified acquisition procedures in order to-
(a) Reduce administrative costs;
(b) Improve opportunities for small, small disadvantaged, women-owned, veteran-owned, HUBZone, and service-disabled veteran-owned small business concerns to obtain a fair proportion of Government contracts;
(c) Promote efficiency and economy in contracting; and
(d) Avoid unnecessary burdens for agencies and contractors.
So, what are you doing to be aware of and win your piece of the SAP pie?
NOTE: Earlier this year during a public meeting held by the co-chair of the President’s Small Business Interagency Task Force on Federal Contracting Opportunities for Small Business, I had an opportunity to present an idea which I’ve been nudging along for several years. That idea? To increase the SAP threshold to $500,000 and completely it set-aside for small business (instead of the current flexible reservation for small business). This would create a fantastic area of opportunity for small businesses to prove themselves while competing for and earning revenues to help keep the lights on while they hunt for larger prey (aka larger requirements contracts and IDIQ and GWAC contract vehicles). Again, it is lower risk for government as well. For more information, see my blog post from May 1, 2010.
Small Business Subcontracting Threshold
On the flip-side of this change to the FAR is the increase in the Subcontracting Threshold for companies considered "other than small business” who are awarded contracts valued at or above $500,00.00 (until October 1, 2010). The new rule now sets that amount at $650,000, a considerable jump and significant amount of lost opportunities had the increase been smaller.
This change effectively creates another way for those prime contractors who do not view partnering with small businesses as supporting the economy and future innovation needs of the government. Apparently, many companies subject to small business subcontracting view it in the same light as taking forty lashes in the town square, as you’ll see indicated next.
One of the comments received by the Councils during the public comment phase stated that one respondent was "...particularly pleased with the proposal to increase the threshold values in FAR part 19 relative to the need to submit an acceptable subcontracting plan. They consider the current threshold to be administratively burdensome. The respondent further recommended that the Councils should pursue legislative action to raise the threshold to a minimum of one million dollars.”
Sound all too familiar? Be afraid of sentiment like this.
Just wanted to make sure you know what’s happening in your world.
Chief Visionary and CEO
"The person who says it cannot be done
should not interrupt the person doing it."
Identify, Qualify, Pursue and Capture B2G Business Opportunities.