Recap: SBAIC Panel, Partners Day, USAID Worldwide Management Bureau Summit: “Working Together to Achieve USAID’s Small Business Targets and Achieve Good Development”

March 2015

SBAIC was recently invited by USAID to provide our views on the Agency’s efforts to meet its small business goals, both in Washington and the Missions, and our ideas on areas requiring additional Agency emphasis. We shared our views in a panel entitled “Working Together to Achieve USAID’s Small Business Targets and Achieve Good Development,” held on March 3, 2015, as part of Partners Day during USAID’s Worldwide Management Bureau Summit and attended by Contracting Officers and other USAID management staff from around the world.

We recap below the key points we made during SBAIC’s panel. First, we want to recognize Angelique Crumbly, Assistant Administrator for the Bureau for Management, for her leadership in organizing a vibrant Partners Day as part of the M Bureau Summit. The day included very substantive panels led by SBAIC, PSC/CIDC, and NGOs; partner booths; and a reception. Besides our panel, SBAIC organized a booth which featured a live demonstration of our website to encourage use of it by USAID officers for market research. We also want to express our special appreciation for the significant role Ombudsman Lance Butler played in creating a successful event and for Procurement Executive Aman Djahanbani’s efforts on the spot to address our questions and comments. The support and positive energy around working together as partners in development was palpable and exciting. Thank you!

SBAIC’s key points:

USAID has renewed its commitment to small business in the past couple of years and made very important progress in addressing misperceptions at the Mission level that USAID FORWARD prioritizes local organizations at the expense of small business. We greatly applaud USAID’s new Small Business target for Missions – the “Small Business Local Solutions Indicator” – as a concrete way to communicate USAID’s small business priorities and at the same time create overseas prime contract opportunities for small business. This is a major step forward as nearly 80% of acquisitions are Mission-based. SBAIC advocated for this, and, when implemented, noted that the FY14 target of 6.5% was too low, which Missions demonstrated by ultimately using just over 12% of their FY14 programming dollars for small business awards! In that light, we can all agree that USAID is not challenging itself enough by setting a target for FY15 of 10%. We encourage:

Higher SB Local Solutions Indicators targets for Missions
Maximum use of sources sought notices so that full and open versus set aside competition decisions are based on market research
Use of SBAIC’s website, www.sbaic.dru, for conducting market research (see guide to using our website here)

However, misperceptions about USAID FORWARD and small business are deeply rooted and it will take consistent and repeated reinforcement in Agency communications to ensure balanced utilization of local organizations and small business. We urge USAID’s leadership to ramp up communications on this message to Missions, using all avenues such as intranet postings, monthly Mission calls, and continued travel by OSDBU leadership who understand small business capability.
We applaud USAID for greatly exceeding its Washington-based small business procurement goals in the last two years. USAID set a goal for itself of awarding 11% of all acquisition dollars to small business in FY13 and achieved 15.10%. USAID raised its small business Washington-based procurement goal in FY14 goal to 12.35% but achieved a remarkable 20.81%. USAID’s goal for FY15 is 14%. This begs the obvious question: Why does USAID set such low goals? The rest of the U.S. Government is held by the Small Business Administration (SBA) to a small business utilization goal of 23.5%. USAID’s FY14 achievements demonstrate that the government-wide goal of 23.5% is well within its reach.

Small business subcontracting is the lifeblood of many small businesses. In that regard:

SBAIC greatly applauds USAID’s incorporation in the new IDIQ template of model language on meaningful small business inclusion. We encourage USAID to move from making this language optional to making it a requirement, and to use the same language in an RFP template. If USAID requests small business participation and scores it, primes will move on it with alacrity!
USAID’s Mentor Protégé Program will not take off until USAID incorporates points for mentors that include their protégés in proposals, as other federal agencies do. Without that, USAID is in effect asking mentors to lose points by using protégés with fewer corporate capabilities than competitors, without offsetting points for being a mentor.
Enforcement of small business subcontracting plans is critical. Historically, little has been done in this regard and as a result small businesses often find that subcontracting commitments are not met by prime contractors but have little recourse. We are encouraged by USAID’s recent efforts to better monitor small business subcontracting commitments and better evaluate actual implementation of small business subcontracting plans as part of proposal scoring. SBAIC encourages USAID to consistently include the following in all RFPs:

Small business contracting plans
Reporting on actual use of small business against plan
Small business references on the offeror’s past small business utilization
Reference to the Jobs Act which requires a written explanation for any deviation from a small business subcontracting plan

Individual contracting officers and contracting officer representatives should be strongly encouraged to hold primes to the small business targets set in proposals, monitor use via regular progress and financial reports, and enforce the Jobs Act.

Encourage use of small business in RFAs and clarify fee policy. Because RFAs don’t have a small business requirement, small businesses are rarely included as subs. Given the dominance of RFAs, this is significant. USAID can address this by encouraging use of small business in RFAs; and clarifying in writing that fee on subcontracts under cooperative agreements is allowed.

The way NICRA is currently implemented can undermine USAID’s goal of expanding its partner pool and be a barrier to entry for small businesses wanting to work with USAID. A firm without a cost plus fixed fee prime contract cannot obtain a NICRA; yet without a NICRA, a firm is at a competitive disadvantage to firms with NICRAs, and often asked to provide detailed proprietary information and incur audit expenses that are not required. Misperceptions of what is required are maintained by RFP requests for “audited balance sheets and profit and loss statements for the last two complete years” in lieu of a NICRA, when in fact “reviewed financials” are acceptable. USAID can address this by better informing contracting officers on documentation requirements and providing acquisition templates with the correct language. Large prime businesses should be encouraged to mirror these requirements. We were very encouraged by USAID’s responsiveness on this topic at the M Bureau Summit.
Cross-cutting actions:

We applaud improvements in USAID’s business forecast and urge continued refinement and early identification of set-aside opportunities.
We are delighted at the uptick in small business set-asides under IDIQs, but this is only meaningful when small business IDIQ awards are followed by RFTOPs, which will also fuel achievement of the Small Business Local Solutions Indicator. We urge continued full small business set-aside IDIQs, equal number of set-asides as full and open under other IDIQs, and higher small business thresholds.
USAID can accelerate implementation of the WOSB 8(m) program, which we believe can be as transforming for SBAIC’s many WOSB members as the 8(a) program is for SDBs.

We thank USAID for the opportunity to share our views at the M Bureau Summit, as part of an excellent Partners Day, in which SBAIC was well represented by a booth, 50 participants, and sponsorship of the reception. Partners Day was a very impressive gathering and really unprecedented in the openness and feeling of true partnership in the effort to hear each other out and work together in identifying and developing solutions to achieve common goals. We urge USAID to include an opportunity to exchange with its partners in all such events. We look forward to continuing to dialogue and constructively work together in achieving USAID’s small business goals.

OTHER STORIES