TO A SELECT FEW:

WILFONG'S THOUGHT OF THE DAY:
NOVEMBER 25, 2005

ISSUANCE NO. 3131: THE STAKEHOLDERS RELATED TO THE NUMBERS.....

As we stated in Issuance No. 3130 keeping track of the numbers is gonna help tremendously in gaging the inclusion of the Designated Groups in the procurement system of the United States Government. But, lest we forget, the numbers thing is only an accounting function. It measures, after the fact, what is supposed to be done in accordance with the law and good business practices. The "supposed to be done", has always been, and is gonna continue to be the "problem" that must be solved.

To better address that area, let's examine the "Stakeholders", in this process. Let's clearly review whose got what role and what stake in this pot. This will, hopefully, help to assign responsibility, and better assess performance, and thus hold folk accountable. And, as we intended to point out in the last Issuance, SDBs need to seek out what you're entitled. To adequately accomplish that, you need to know fully who the other stakeholders are, and the role they are intended to play.

THE STAKEHOLDERS

Who They Are
There are six interdependent stakeholders in the subcontracting process. Although each plays a unique role, the integrated efforts of all are necessary to make the process effective and efficient. These stakeholders are:

Contracting Officer (CO) - Federal employee with the authority to enter into, administer, and/or terminate contracts between the Federal government and other organizational entities. Contracting Officers negotiate the terms of the contract, approve subcontracting plans, and review prime contractor compliance.

Program Manager (PM) - Federal employee responsible for delivering results that achieve outcomes that further the agencyís goals and mission. Program Managers encourage prime contractors to subcontract with small businesses by providing incentives in program procurements.

Office of Small and Disadvantaged Business Utilization (OSDBU) - Federal agency organization that ensures small and disadvantaged businesses gain access to procurement opportunities within the agency. The OSDBU also ensures that Small Business Specialists (SBS) effectively monitor subcontracting compliance.

Small Business Administration (SBA) - Federal agency responsible for administering laws and policies related to the involvement of small businesses in Federal procurement. The SBA provides assistance and educational programs to help small businesses with the federal procurement process, and administers the Subcontracting Assistance Program to help increase the percentage of subcontracts awarded to small businesses by prime contractors. The SBA reviews subcontracting plans, monitors prime contractors to ensure subcontracting goals are met, and assists small businesses in marketing to large prime contractors.

Prime Contractor - The private or non-profit organizational entity that the government holds legally responsible and accountable for delivering the products and/or services specified in the governmentís contract. Prime contractors develop and implement subcontracting plans in accordance with the FAR.

Subcontractors - The private or non-profit organizational entity that is under contract to a Prime contractor to provide products and/or services that will be delivered to the Government. Small business subcontractors represent themselves as the appropriate business type and provide written certification to prime contractors.

What They Do
Each stakeholder has distinct but interrelated responsibilities. These responsibilities combine to ensure the entire subcontracting process is both effective and efficient. The responsibilities of the stakeholders are as follows:

Contracting Officers
Understand the responsibilities related to the subcontracting assistance program defined in Subpart 19.705 of the FAR, acquisition of commercial items defined in Part 12 of the FAR, and contracting methods and types defined in Subchapter C of the FAR.

Standardize a system of incentives for prime contractors who comply with subcontracting plans (FAR 19.705-1) and penalties for those who do not (FAR 19.705-7). Providing an incentive fee for performance in meeting the goals of the subcontracting plan, with additional incentive fees for going beyond the stipulated performance is an effective tool.

Work with the Small Business Specialists in the OSDBU to identify specific small business goals during development of RFPs. Ensure RFPs that require submission of a subcontracting plan are reviewed by the resident SBA Procurement Center Representative before the solicitation is issued, in accordance with Subpart 19.705-3 of the FAR.

Advise offerors of deficiencies in proposed subcontracting plans, and request a revised plan be submitted by a designated date.

Ensure that successful offerors submit an acceptable subcontracting plan in accordance with Subpart 19.702 (a) (1) of the FAR.

Use an offeror's past performance, including in meeting subcontracting goals, as a major criteria in awarding contracts in accordance with Subpart 19.705-5 (a) (1) of the FAR.

Ensure that prime contractors have a proven method for involving small businesses in similar acquisitions by checking with Administrative Contracting Officers of other contracts held by the company.

With the OSDBU, ensure that the amount of dollars and the percentage of the work to be subcontracted are commensurate with the size of the contract.

Provide a copy of the contract with the OSDBU Small Business Specialist within 30 days of contract award. Work with OSDBUs to jointly and proactively monitor subcontracting compliance.

An Administrative Contracting Officer (ACO) should review subcontracting plans and monitor, evaluate, and document a contractorís performance on the contract.

Ensure that prime contractors submit reports in accordance with the requirements of the subcontracting plan, including Standard Forms 294 and 295. See Appendix A to review Standard Forms 294 and 295.

Impose liquidated damages if necessary for failure to comply with the subcontracting goals in accordance with Subpart 19.705-7 of the FAR.

Program Managers
Work with OSDBUs to locate suitable small business prime contractors and subcontractors for potential procurements. Recommend that certain procurements be set aside for small businesses if a sufficient pool of potential offerors exists.

For procurements with full and open competition, work with the OSDBU Small Business Specialist and CO to designate dollar and percentage goals for small business subcontracts. Ensure that the amount of dollars and the percentage of the subcontracted work is commensurate with the total size of the contract.

Work with COs to establish incentives and penalties to encourage prime contractors to achieve the goals of the subcontracting plan.

Suggest that prime contractors research past performance of subcontractors to ensure that the subcontractor has the qualifications and capability to perform the quality of work required to make the project successful.

OSDBU
Assign Small Business Specialists (SBS) to monitor the compliance of prime contractors with subcontracting plans.

Conduct assessments to determine whether potential procurements can be set aside for small or small disadvantaged businesses.

Participate in the review of large acquisitions requiring departmental delegation of procurement authority and make recommendations regarding small and small disadvantaged business involvement.
Provide guidance to PMs and COs regarding the structuring of large procurements to enhance subcontracting opportunities for small businesses.

For full and open competitions, work jointly with COs and PMs to develop subcontracting goals before Requests for Proposals (RFPs) are issued. Identify the subcontracting dollars and percentages of work to be assigned to subcontractor categories.

Evaluate the apparently successful offerorís subcontracting plan prior to contract award. Provide advice to the CO regarding the proposed goals. Ensure that the amount of dollars and the percentage of work proposed for subcontracting are commensurate with the size of the contract.

Develop and recommend criteria for monitoring and evaluating prime contractor compliance with the subcontracting plan.

Proactively monitor prime contractor compliance with subcontracting plans. Talk with each subcontractor named in the offerorís proposal. Identify changes in execution from the plan made by the prime contractor and request explanations.

Participate with the PM and CO in computing and awarding incentives and penalties to the prime contractor for performance in accordance with the subcontracting plan.

Maintain a database of small businesses, their capabilities, and past performance information. Provide access to this resource to COs and PMs.

Research inquiries from small businesses regarding specific opportunities identified in Agency procurement forecasts. Provide counseling to small businesses on subcontracting opportunities and

Agency requirements.
Small Business Administration

Advise and assist Agencies in developing acquisition strategies that maximize participation of small businesses commensurate with Agency needs.

Conduct joint subcontracting reviews with Agencies. Work collaboratively with COs and OSDBUs to monitor and ensure prime contractorís compliance with the subcontracting plan.

Prime Contractors
Establish a pool of qualified subcontractors with the appropriate mix of NAICS Codes and small business categories.

Work with the Small Business Specialist in the OSDBU to pre-qualify subcontractors who have the capability, capacity, and history of past performance needed by the prime contractor.

Consider using the Dunn & Bradstreet rating as a benchmark to evaluate a small businessí past performance.

Meet or exceed the goals established in the approved subcontracting plan and keep COs and OSDBUs informed of performance. When changes are necessary, make every effort to comply in good faith or risk material breach of the contract and liquidated damages.

Subcontractors
Establish an outstanding record of past performance by delivering what you promise on time and on budget.

Proactively market your business to prime contractors as well as Federal Agencies.

Participate in workshops and educational sessions held by the SBA and Federal Agencies to learn how to do business with the Federal government. Participate with groups who offer support to small businesses including OSDBUs, GSA, SBA, Procurement Technical Assistance Centers and Minority Business
Development Centers.
Update corporate profiles on CCR, GSA and other Federal and public sector databases at least quarterly.

Research agency websites to learn about forecasts, agency history, agency needs, procurement requirements and functions.

Join organizations that provide visibility. This includes women and small business organizations, advocacy groups, purchasing councils and chambers.
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Now that you know these things-what ya gonna do......

The struggle has moved to a new paradigm,

Henry T. Wilfong Jr., MBA, CPA
President, NASDB
Current or Former Positions:
Three-time Appointee of Governor and President Ronald Reagan
Pasadena, CA City Councilman
Member, Bush-Cheney Transition Team-SBA Advisory Group
Member, Department of Energy, Small Business Advisory Committee
Associate Administrator Minority Small Business/Capital Ownership Development, SBA
Member, National Council on Policy Review-Black Capitalism
Member, Presidential Task Force on International Private Enterprise
Member, California Council on Criminal Justice
Member, NASA Advisory Council
Chair, NASA Minority Business Resource Advisory Committee

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