U'S' SMALL BUSINESS ADMINISTRATION

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U.S. SMALL BUSINESS ADMINISTRATION

• THE FACTS
• ABOUT
• THE 8(A) PROGRAM
• HUBZONE PROGRAM
• AND
• SMALL DISADVANTAGED
• BUSINESS (SDB)

Helping you start, grow and succeed.
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Central Contractor Registration (CCR)

• Before you apply to 8(a) or HubZone
• Register at www.ccr.gov
• All firms must register to do business with
  federal government
• Complete SBA Small Business Profile
• 2-3 Days to update
• Small Disadvantaged Business (SDB) is now a
  self-certification in CCR

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U.S. SMALL BUSINESS ADMINISTRATION

• 8(a) BUSINESS
• DEVELOPMENT PROGRAM
• APPLICATION CERTIFICATION
• (SEE 13CFR 124)
• Presented By
• Irene J. Farmer
• Business Development Specialist
• 8(a) Business Development Program
• [phone]

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WHAT IS THE PURPOSE OF THE 8(a) PROGRAM?

• The programs primary purpose is to assist
  eligible small
• socially and economically disadvantaged business
• concerns to compete in the American economy
  through
• business development during a nine (9) year
  program
• term.
• SBA Website www.sba.gov
• Electronic Application SBA Programs

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IS YOUR COMPANY A SMALL BUSINESS?

• Your company must be small based on the size
• standard of its primary NAICS (North American
• Industry Classification System) Code, including
• affiliates.
• Size is determined by
• Average 3 years revenues
• OR
• Number of Employees
• (manufacturer, dealers and wholesaler)
• (A decline based solely on size or size with
  regard to affiliation will allow the applicant to
  reapply immediately without a one year wait.)

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WHO IS SOCIALLY DISADVANTAGED?

• Socially disadvantaged individuals are those who
  have
• been subjected to racial or ethnic prejudice
  because of
• their identities as members of groups, without
  regard to
• their individual qualities.
• Individuals are presumed to be socially
  disadvantaged if
• they are U.S. citizens and members of one of the
• following groups
• African or Black Americans
• Hispanic Americans
• Native Americans
• Asian Pacific Americans
• Subcontinent Asian Americans

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WHO IS SOCIALLY DISADVANTAGED?

• An individual who is not a member of a presumed
• group must establish his/her individual social
• disadvantage by a
• preponderance of the evidence.
• Generally, preponderance is evidence of a quality
• and quantity which leads the decision maker to
• objectively conclude that the existence or truth
  of
• the fact(s) asserted is more probable than not.

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WHAT IS ECONOMIC DISADVANTAGE?

• Economically disadvantaged individuals are
  socially disadvantaged persons whose abilities to
  compete in the free enterprise system have been
  impaired due to diminished capital and credit
  opportunities. SBA also considers the following
  factors in evaluating economic disadvantage
• Net worth An individuals personal net worth
  may not exceed 250,000 (Equity in the firm and
  primary residence are excluded)
• Average income Access to credit and capital and
  Business financial condition
• Asset transfers within two years of the
  application will be attributed to the transferor
  unless the transfer in asset(s) was
• at Fair Market Value
• To an immediate family member
• for essential support purposes or
• Recognition of special occasions

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WHO OWNS THE BUSINESS?

• The applicant concern must be at least 51
• unconditionally owned by socially
• economically disadvantaged individuals.
• Partnership Agreement must reflect at least 51
  unconditional ownership by disadvantaged persons.
• Limited Liability Company Agreement must reflect
  at least 51 of each class of member interest
  owned by disadvantaged persons.
• Corporation Disadvantaged persons must own at
  least 51 of each class of voting stock and at
  least 51 of the aggregate stock.

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WHO OWNS THE BUSINESS?

• Ownership must be direct. An applicant or
  participant owned principally by another business
  entity or by a trust (including employee stock
  ownership trusts) that is in turn owned and
  controlled by disadvantaged individuals does not
  meet this requirement.

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WHO CONTROLS MANAGES THE BUSINESS?

• Partnership Agreement must reflect disadvantaged
• individuals as general partners with control over
  all
• partnership decisions.
• Limited Liability Company Agreement must reflect
  disadvantaged individuals as management members
  with unconditional control.
• Corporation Disadvantaged individuals must
  control the Board of Directors of the applicant
  or 8(a) concern by the actual number of voting
  directors or through weighted voting, if
  permitted by state statutes. dividuals determined
  to be disadvantaged for purposes of one
  Participant, their immediate family members, and
  the Participant itself, may not own, in
  aggregate, more than a 20 interest in any other
  single Participant.

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WHO CONTROLS MANAGES THE BUSINESS?

• A disadvantaged individual must have ultimate
  managerial and supervisory control over those who
  possess the technical expertise or the required
  licenses.
• If a nondisadvantaged individual provides the
  critical license and has any equity interest in
  the concern, that non-disadvantaged individual
  may be found to control the firm.

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THE DISADVANTAGED INDIVIDUAL MUST

• Hold the position of President or Chief Executive
  Officer
• Devote full-time to the firm
• Be the highest compensated individual
• Have the ability to hire and fire
• Set policies
• Have the ability to commit the firm to contracts
• Control budget and financial disbursements

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WHO CONTROLS MANAGES THE BUSINESS?

• If a nondisadvantaged individual has transferred
  majority ownership or control of a firm from a
  nondisadvantaged immediate family member within
  two years prior to the application and the
  nondisadvantaged individual remains involved in
  the firm as a stockholder, director, officer or
  key employee of the firm, SBA will presume that
  the non-disadvantaged individual controls the
  applicant firm.
• This presumption may be rebutted by showing that
  the transferee has the independent management
  experience necessary to control the operation of
  the firm.

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WHAT IS POTENTIAL FOR SUCCESS?

• Proof of two years operation in a firms primary
  industry as verified by revenues reported on
  their business tax returns.

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FACTORS CONSIDERED INEVALUATING POTENTIAL FOR
SUCCESS

• Disadvantaged individuals must have the requisite
  managerial capabilities. However, SBA will also
  consider the managerial and technical expertise
  of the applicant concerns managers
• 2. Financial capacity of the firm, including
  sufficient capitalization, financial performance,
  bonding capacity, manageable debts
• 3. Track record of performance on previous
  contracts and
• 4. Adequate Federal government buy-support.

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GOOD CHARACTER

• Here are some examples of lack of good character
• Adverse information regarding possible criminal
  conduct by the applicant or its principals
• Violations of any SBA regulations
• Debarred or suspended individuals or firms
• Applicant firms and principals that lack business
  integrity as shown by an indictment, guilty plea
  or civil judgment
• Any principal who is incarcerated or on parole or
  probation
• Evidence that the firm knowingly submitted false
  information in the application process and
• The firm or any of its principals fail to pay
  significant financial obligations owed to the
  Federal government.

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WHAT BUSINESSES ARE NOT ELIGIBLE?

• Brokers (A broker is specifically defined as a
  concern that adds no material value to an item
  being supplied to a procuring activity or which
  does not take ownership or possession of or
  handle the item being procured with its own
  equipment)
• Non-profit organizations
• Concerns owned by other disadvantaged concerns
• (However, when at least 50 of the assets of a
  concern are the same as those of a former
  Participant, ones eligibility is considered to
  have been used.)
• Franchises are eligible, although SBA will review
  the franchise agreements for compliance with 8(a)
  criteria.

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8(A) BUSINESS PLAN ORIENTATION

• When the New Mexico District Office receives your
  letter of Certification you will be mailed a
  Business Plan (SBA Form 1010C) and it must be
  returned to SBA, New Mexico District within 30
  days
• The cover letter will assign a Business
  Development Specialist (BDS) to your company
• Your BDS will review your business plan, and
  contact you if additional information is needed

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BUSINESS DEVELOPMENT SPECIALIST (BDS)

• The BDS will schedule a New Firm Orientation with
  you to acquaint you with the 8(A) Program
  procedures, regulations, and explain other
  business assistance available to you through SBA
• Your BDS is your contact at the SBA New Mexico
  District Office, and can answer any questions you
  may have about 8(A) Program Participation and
  refer you to contracting regulations.

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NEED HELP!!! WITH YOUR 8(A) APPLICATION?

• FREE ASSISTANCE
• NM Small Business Development Centers -
  Albuquerque [phone] or
• [phone], Las Cruces [phone] (see
  www.sba.gov for additional locations)
• WESST Corp Albuquerque [phone], Las
  Cruces [phone]
• Service Corps of Retired Executives (SCORE) -
  Albuquerque [phone],
• Las Cruces [phone]
• New Mexico Economic Development Dept. Santa Fe
  [phone]
• REDUCED FEE
• Dept. of Commerce/NEDA Business Consultants -
  Albuquerque [phone]
• Native American Business Development Center
  (NABEC), MBDA/DOC
• [phone]

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BUSINESS DEVELOPMENT FOR 8(A) PARTICIPANTS

• Business Counseling
• Marketing
• Trade Fairs
• Business Mixers
• Federal Agency Contacts

• Computer Courses
• Business Courses (Low Cost or Free)
• District Office Workshops
• 7(j) Workshops

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MARKETING FOR 8(A) PROCUREMENTS

• Preparing an 8(a) Marketing Brochure
• Once certified prepare a marketing brochure
• Brochure should show all certifications, 8(a),
  SDB, HubZone, DBE, etc.
• Describe your capabilities
• Provide a copy of your brochure to your
  specialist
• Do not claim to be 8(a) until you receive
  certification
• You must not use the SBA Logo on any of your
  marketing materials

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8(A) CONTRACTING PROCEDURE

• Memorandum of Understanding (MOU)
• Signed by Agencies May 6, 1998
• Now Called Partnership Agreements
• All 8(A) Requirements, Sole Source Competitive,
  Must be Offered to the SBA District Office, 8(A)
  Business Development Program.
• SBA accepts offer as a sole source for an 8(a)
  firm, or as a competitive, and assigns an 8(a)
  subcontract number. Maximum sole source is
  3,500,000.
• With SBA acceptance, full authority is given to
  the agency to compete, negotiate, sign, and
  otherwise administer the contract to completion.
  SBA Does not sign the contract. A copy of fully
  the executed contract must be mailed as soon as
  possible to SBA for our 8(a) contract file.
  Agencies must still send SBA copies of all
  modifications, delivery orders, close out
  documents, etc.
• (Exception Small Purchases (100,000 or Less) -
  An advance copy of purchase order is sent to SBA
  - If No response from SBA District Office within
  two days the order may be placed directly with
  the 8(A) Contractor, and No SBA Subcontract
  Number is assigned)

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HUB ZONE

• Application Requirements Electronic Application
• Small Business
• Located in Hub-Zone
• 35 of Employees Live in a Hub-Zone
• Contracting Procedures (benefits)
• Hub-Zone Set-Asides Mostly Competitive
• Advertised in FedBizOpps
• 10 Price Adjustment Full Open Competition

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HubZone Reviews

• HubZone Field Visits Reviews
• May be conducted randomly at any time
• This is to verify you remain compliant with
  regulations

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U.S. SMALL BUSINESS ADMINISTRATION

• QUESTIONS???