Small Business Utilization Program
1. Business Categories
2. Responsibilities of SBLO
3. Subcontracting Plans
4. EPA Grant/Cooperative Agreement Requirements
As a recipient of research dollars from state and federal funding agencies, SDSU Research Foundation is responsible for compliance with the terms and conditions of the award. All state and federal agencies are required to comply with the requirements established by the Small Business Administration (SBA). These same requirements must flow down and become part of the proposal requirement and any subsequent award. The principal investigator (PI), project staff, sponsored research development (SRD) and purchasing department must all be committed to achieving the requirements as set forth in the proposal and award documents. The goals apply to subcontracted dollars only, i.e. product and/or services purchased from businesses. Consulting dollars spent with individuals are not included.
There are a number of codes, laws and regulations that provide lengthy explanations as to why the requirements are imposed on awardees of state and federal funds. Some of the more common ones include but are not limited to Public Contract Code Section 10111, 10115 et seq.; CCR Title 5 Section 43870 et seq., Military and Veterans Code, Sections 999.2, 999.5, 999.7, 999.11 and 999.12, Government Code Section 14838.5, Federal Law 95-07, Federal Acquisition Regulation and Office of Management and Budget.
1. Business Categories
In most cases, the award will define the minimum goal requirements. However, when it is not specific SDSU Research Foundation is required to meet an overall standard. Target goals as defined by the SBA are as follows:
- Disabled Veteran Business Enterprise (DVBE) – 3 %
- Veteran Business Enterprise (VBE) – 3 %
- Small Business Enterprise (SBE) – 20 %
- Small Woman-Owned Business Enterprise (WBE) – 5 %
- Small Disadvantaged-Owned Business Enterprise (DBE) – 3 %
- HUBZone Empowering Contracting Program (HUBZone) – 2 %
- Historically Black College/Universities and Minority Institution (HBCU) – 3 %
In order for a business to qualify and be certified in a particular category, it must meet specific criteria as defined in the web site locations listed below:
- Small Business Administration: www.sba.gov/
- Department of Veteran Affairs: http://www.va.gov/OSDBU/index.asp
- California State University: www.calstate.edu/Csp/Crl/policy/policy07-07-06.doc (Section 216)
- SBA HUBZone Program: http://map.sba.gov/hubzone/init.asp
- Department of Education: http://www.ed.gov/about/offices/list/ocr/edlite-minorityinst-list-tab.html
SBE may self certify provided they meet the criteria as defined in the SBA Table of Standards. The table may be viewed at the following site: http://www.sba.gov/mostrequesteditems/CON_FAQ9.html
WBE, DBE, DVBE and VBE must be certified by the SBA and present a current certificate.
HBCU must be listed on the Department of Education web site.
HUBZone business must be located within a specific geographic grid area. This can be determined by entering the physical address of the business in the SBA HUBZone Program site.
2. Responsibilities of SBLO
SDSU Research Foundation's Purchasing Manager is also the Small Business Liaison Officer (SBLO). The SBLO is the point of contact for small businesses and projects and will:
- Make information regarding pending solicitation available to, and consider offers from, small business suppliers capable of meeting SDSU Research Foundation business needs.
- Ensure prompt payment to small businesses.
- Identify and implement innovative acquisition processes to further small business participation.
- Give special consideration to small businesses and micro businesses by reducing experience requirements and level inventory normally required.
- Maintain a directory of potential suppliers.
- Provide one on one instruction as needed to support the program and goals.
- Monitor project goals to insure compliance and redirect goals as may be needed to deal with programmatic issues.
- Review reports prior to submission to the funding agencies.
- Assist the PI with Subcontract Plan Submission on all awards exceeding $550,000.
- In accordance with the requirement of the award, request submission of Sub Contracting Plans from subcontractors with an anticipated award in excess of $550,000.
3. Subcontracting Plans
- The Subcontracting Plan
The Federal Acquisition Regulation (52.219-9) requires a Subcontracting Plan for Small and Small Disadvantaged Businesses for each contract $550,000 and over. Prime contractors, such as SDSU Research Foundation, must agree to purchase a percentage of the supplies and services required for the performance of the contract from small and disadvantaged businesses. Some Federal agencies set specific goals. Most rely on the prime contractor to make a "good faith effort." The documentation of this effort is outlined in the DBE/WBE/VBE Good Faith Effort - Six Steps Documentation form. The Subcontracting Plan specifies:- which items/commodities will be purchased from small and disadvantaged businesses,
- the total dollars to be spent with small and disadvantaged businesses in each category, and
- The percentage of total dollars budgeted for supplies and services that these purchases represent.
- Preparing a Subcontracting Plan
SRD notifies the PI and SBLO when a plan is required and whether or not the contracting agency has set specific goals. In either case, the plan must set separate goals for small and small disadvantaged businesses. The SBLO will assist the PI with the identification of vendors that meet specific disadvantaged, women owned, small business or other requirements. The PI is expected to make every effort to meet these goals. It is imperative to keep these goals in mind as funds are expended as it is impossible to meet the goals at the end of a project when the money has already been spent. Once the SBLO identifies subcontracting opportunities, dollars and percentage goals calculated, the information is entered on a Subcontracting Plan form. Some contracting agencies provide these forms. The National Institute of Health (NIH), for instance, will not accept a subcontracting plan that is not on an NIH form. However, most agencies are flexible as long as the required information is included. The completed Subcontracting Plan is signed by the SBLO and sent to SRD to forward to the contracting agency for approval. - Subcontracting Plan Reporting
SDSU Research Foundation is required to submit semi-annual and annual reports charting the progress in meeting subcontracting goals. Subcontract Reporting for Individual Contracts - SF 294 and/or Summary Subcontract Report - SF 295 are a contract requirement. Failure to file an SF-294 or SF-295 or to meet the utilization goals as defined in the Plan, could be considered evidence of a lack of a "good faith effort" to comply with contract requirements and could result in liquidated damages or other penalties, including material breach of contract and termination for default.
4. EPA Grant/Cooperative Agreement Requirements
PI's involved with EPA grants and cooperative agreements are required to set a Fair Share goal. SDSU Research Foundation must report the progress annually to the EPA on Form 5700-52A. Regardless of the dollar value of a grant, the Federal State Revolving Fund (FSRF) Grant Program requires that any prime contracts or subcontracts for services, construction, goods, or equipment procured by a grantee to implement the project funded from the grant must contain the applicable Federal Fair Share Disadvantaged and Women-Owned Business Enterprises (DWBE) Utilization Goals.
The Federal Fair Share D/WBE Utilization Goals are as follows:
| Category | DBE | WBE |
|---|---|---|
| Construction | 8.25% | 2.09% |
| Services | 11% | 5% |
| Goods | 2% | 1% |
| Equipment | 5% | 2% |
The applicable D/WBE goals depend on the predominate character of the specific grant/contract. For example:
- If the single grant/contract is solely for services (e.g., design or monitoring), then apply the D/WBE goals for services (11%/DBE; 5%/WBE).
- If the single grant/contract is solely for furnishing equipment, apply the D/WBE goals for equipment (5%/DBE; 2%/WBE).
- If the single grant/contract is for both services and equipment, use the D/WBE Goals applicable to the predominate character (as evidenced by the project or scope of services and/or the dollar amounts) of that single grant/contract. Thus, if the single grant/contract is primarily for monitoring services with the incidental purchase of monitoring equipment, apply the D/WBE goals for service.