10 Quick Wins to Increase HUBZone Scorecard Percentages

Transcription

1 10 Quick Wins to Increase HUBZone Scorecard Percentages Tom Belke President, HUBZone HQ 1591 Dahlia Drive, Ste. 103, Virginia Beach, VA

2 Background The HUBZone Scorecard is broken! Status quo solutions guarantee ongoing low %. Accepting low scorecard excuses enables failure. 10 Quick Wins = Solution portfolio approach Driven both by HZ firm experience and metrics Solution type 1: Remove the impediment. Solution type 2: Apply proven solution(s). Solution type 3: Try a few new ideas. Quick Win(s) means current FY and next FY. Suite of Quick Win solutions is available now! 2

3 End State: What does success look like? 1. Measures of Effectiveness (MOEs) MOE #1: HZ scorecard % s for current FY MOE #2: HZ scorecard % > 3% for next FY 2. Measures of Performance (MOPs) MOP #1: Simplicity MOP #2: Cost effectiveness MOP #3: Quick win component MOP #4: Long-term viability 3. Definitions (Ref: NASA Systems Engineering Handbook, p.192) MOEs Derived from stakeholder expectation statements; deemed critical to mission or operational success of the system. [Direct measure] MOPs Broad physical and performance parameters; means of ensuring meeting the associated MOPs. [Indirect measure] 3

4 Imagine: A Fix HUBZone meeting with POTUS Imagine you get invited to the Oval Office. The President says, Tell me what we have to do to fix the HUBZone Program. 4

5 #1 HZ Sole Source d $20M IDEA #1 HZ Sole Source virtually unused by most agencies. Quiz time: FAR HZ Sole Source % = _?_ and _?_ Current HZ Sole Source % is too low to get most agency KO s attention. [ might as well not be there.] What is Solution #1? Step increase $20M in HZ Sole Source % that permits meaningfully-sized 51%/49% splits with 5 year PoPs. A small incremental change alternative would be a meaningless ignorable variant of the ineffective Status Quo. 5 KO s would opt for HZ Sole Source awards as a viable method to increase their current FY Scorecard %. New HZ start-up(s) could inherit the past performance of a large prime and win current FY awards.

6 FAR HUBZone National Conference October HUBZone sole source awards. (a) A contracting officer shall consider a contract award to a HUBZone small business concern on a sole source basis (see (b)(5)) before considering a small business set-aside (see and subpart 19.5), provided none of the exclusions at apply; and- (1) The contracting officer does not have a reasonable expectation that offers would be received from two or more HUBZone small business concerns; (2) The anticipated price of the contract, including options, will not exceed- (i) $6.5 million for a requirement within the North American Industry Classification System (NAICS) codes for manufacturing; or (ii) $4 million for a requirement within all other NAICS codes; (3) The requirement is not currently being performed by an 8(a) participant under the provisions of Subpart 19.8 or has been accepted as a requirement by SBA under Subpart 19.8; (4) The acquisition is greater than the simplified acquisition threshold (see Part 13); (5) The HUBZone small business concern has been determined to be a responsible contractor with respect to performance; and (6) Award can be made at a fair and reasonable price. (b) The SBA has the right to appeal the contracting officer s decision not to make a HUBZone sole source award. 6

7 #2 HZ On-ramp Incentives for Primes IDEA #2 Primes have little status quo incentive to on-ramp a new HZ sub to existing contracts. Adding new sub is viewed as taking workshare away from the prime and/or existing subs. What is Solution #2? Tie end-of-fy plus-ups for Cost+ contracts to HZ sub on-ramping to include HZ workshare. Tie Cost+ ceiling changes for Cost + contracts to HZ sub on-ramping with HZ workshare. Plus-ups and ceiling changes occur in current and next FY Primes have positive incentive for HZ on-ramp without removing incumbent workshare. 7

8 #3 Add HZ set-aside non-idiq MACS IDEA #3 When HZ Rule of 2 per FAR results in set-aside, best case win % is 33% (for others) HZ set-asides are quite rare for many agencies, and when they do occur, they tend to exclude HZ start-ups. What is Solution #3? Establish non-idiq HZ set-aside MACS with up to X awards // [Example, Up to 6 awards ] The USAF has used this HZ MAC multiple award method for cyber defense bids out of Offutt AFB, NE. HZ firms that did not respond to a sources sought are encouraged to bid, since capture % is much higher. Government activity is able to access multiple HZ firms with one procurement for current FY impact. 8

9 #4 Add HZ set-aside IDIQ MACS IDEA #4 When HZ Rule of 2 per FAR results in set-aside, best case win % is 33% (for others), HZ set-asides are rare for many agencies, and when they do occur tend to exclude HZ start-ups. What is Solution #4? All agencies with low HZ scorecards initiate a DHS PACTS II-like HZ set-aside IDIQ MAC DHS PACTS I/II IDIQ MAC is a SDVOSB set-aside with sufficient awards to make 3% goal. Leverages proven DHS SDVOSB method as a proven multi-agency HZ scorecard solution Set-aside procurement timeline makes this a next FY Quick Win, if initiated in current FY. 9

10 #5 Flow-down 10% price pref.hz subs IDEA #5 HZ pricing preference does not flow down proportionally to HZ subcontractors. Lack of 10% flow-down results in HZ subs having price disadvantage for IDIQ MAC task order bids. What is Solution #5? Modify FAR to extend price evaluation pref. to subcontract bids including Task Order bids. Nothing inpublic LAW DEC. 2, 1997 or FAR prevents extending pref. to HZ subs. Primes have incentive to include HZ subs for higher % of work on contracts and task orders. HZ subcontractor bid allocations and IDIQ task order work percentages will increase in current FY. 10

11 #6 DSS 1-FTE FCL pref. for HZ start-ups IDEA #6 DSS requires a minimum of 2 FTEs on a classified contract for a firm to apply for a FCL. While the intent is to steward government resources, the policy inhibits new HZ start-ups. What is Solution #6? DSS waive 2 FTE min. HUBZone firms will be able to apply for FCL based on an initial 1-FTE subcontract award. Makes it significantly easier for a HUBZone start-up to obtain a facility clearance (FCL). Multiplier effect, since a FCL is a pre-req. for hiring new employees on classified gov t. contracts 11

12 #7 Provide HZ set-aside Rule of 2 option IDEA #7 Few HUBZone set-asides occur due to most HUBZone firms not meeting Rule-of-2 criteria. HZ Set-aside is broken since many gov t. agencies have zero HZ set-asides throughout the year. What is Solution #7? Allow KO s to meet Rule of 2 prereq. through use of Agency HZ On-ramp Registry (see #9). Agencies may encourage HZ firms (per FAR) to team to obtain required past performance. 12 KOs more readily will be able to use HZ set-asides w/in the applicable size standard limit. HZ set-aside means that all revenue on resulting contract(s) will improve HZ scorecard %. 12

13 #8 HZincs: Est. HZ incubator consortiums IDEA #8 HZ 35% Rule and Principal Office rules discourage most SB s from considering HZ cert. option. Apart from HZ Incubators, SBA s Destination HUB has grassroots implementation shortfall. What is Solution #8? Establish regional HZ Incubator Consortiums (HZincs), to provide HZ turn-key compliance. HZincs will provide sublease subsidized HZ office and initial HZ employee for HZ Start-ups. Simplifies initial HZ 35% Rule and Principal Office compliance with turn-key HZinc solution. Significantly reduces HZ compliance SB start-up costs while awaiting first HZ contract revenue. 13

14 #9 Agency-specific HZ On-ramp Registries IDEA #9 Agencies host HZ matchmaking events, then feel good, but Scorecard % remains low. Agencies have no mechanism to track interested HZ firms vs. primes with low HZ subk %. What is Solution #9? Agencies establish HZ on-ramp registries for HZ subcontracting opportunities w/ agency criteria. HZ firms update registry only once/year. Provides one-stop HZ shop for primes and KO set-asides. 14 Eliminates recurring myth/excuse that it is difficult to identify qualified HZ candidate firms. Primes may identify HZ teaming partners, and HZ onramp candidate firms for existing contracts.

15 #10 Legacy contracts get forward HZ credit IDEA #10 If a SB gets a HZ certified, agencies and primes do not get forward credit for past awards. Current rules give agencies and primes scorecard credit based on original Reps. & Certs. What is Solution #10? Modify rules such that SBs may receive forward HZ Scorecard credit for past awards. Provide HZ firms with alternative to be exempt employees on past awards from 35% Rule. HZ cert. of existing established small businesses will have immediate impact on Scorecard. 15 Exemption alternative removes disincentive for existing firms to apply for HZ certification.

16 HUBZone HQ HUBZone National Conference October 2015 When you think HUBZone, think HUBZone HQ! Tom Belke, President HUBZone HQ