NDAA FY2016 and Small Business – Part Three

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To complete what we started in Part One and Part Two, let’s take a final look at how FY2016 NDAA could affect small businesses.

Section 866 – Modifications to requirements for qualified HUBZone small business concerns located in a base closure area

This section provides an equivalency between HUBZone firms and Native Hawaiian firms, which helps the NHSBs to expand into HUBZone contracting. To date, meeting HUBZone goals is the most difficult set-aside category.

This section also does some definitional changes that make BRAC (Base Re-alignment and Closure) areas more easily designated as HUBZones, this is a good thing, as base closure areas from BRAC decisions are always particularly hard-hit.

Section 867 – Joint venturing and teaming

So this section is a big deal, and as the details emerge, we’ll address this. First, the specifics are that joint venture team members’ past performance will count when pursuing certain large contracts. And it expands the use of JVs to expand the number of areas where SBs are acceptable.

If implemented as described, this is a big change. Currently, only certain JVs inherit the past performance from their members. If this is implemented as written, we’ll be able to use JVs a lot better in the future.

Section 868 – Continued modification to scorecard program for small business contracting goals 

The scorecard program is, quite frankly, somewhere between a joke and unfathomable. Agencies with major deficiencies still receive A’s, and small differences seem to generate larger effects.

Could this be because the grades affect government officials’ bonuses? We certainly don’t want those to be affected (sorry, tongue-firmly-in-cheek).

Section 869 – Establishment of an Office of Hearings and Appeals in the Small Business Administration (SBA); petitions for reconsideration of size standards

This is a technical detail, which separates a way to have size standard appeals to prevent these from going to courts instead. It also allows this office to review the size determinations. There have been a lot of complaints over the years that SBA keeps sizes smaller than really appropriate.

Section 870 – Additional duties of the Director of Small and Disadvantaged Business Utilization

If an OSDBU is a strong advocate, this helps by empowering them to help an SB work on SB set-aside status for an opportunity.

Section 871 – Including subcontracting goals in agency responsibilities 

It is always a good thing to have all small business goals in the evaluation criteria for success by agency executives. This provision adds goals to agency-level responsibilities.

Section 872 – Reporting related to failure of contractors to meet goals under negotiated comprehensive small business subcontracting plans 

This is essentially “tattling” on the big integrators – and requiring actual accountability. Accountability is always a good thing, but be wary because you’re complaining about your prime contractor. But when aggrieved, this may be a strong avenue.

Section 873 – Pilot program for streamlining awards for innovative technology projects 

Pilots for awarding contracts to non-contractors might be good, but this can lead to abuse. As small businesses we’re always wary of “special deals.”

Section 874 – Surety bond requirements and amount of guarantee 

A surety bond is a promise given to one party to pay a certain amount if the second party fails to meet the terms of a contract. Surety bonds are mostly used in construction.

For more details about the FY2016 NDAA, see the full text or this summary.


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