Most Frequently Asked Questions About Government Contracting


1. How is a small business defined and what is the certification process? For the purpose of SBA procurement assistance, a business generally is considered small if it is a business entity organized for profit, located in the United States, and which operates primarily within the United States or which makes a significant contribution to the U.S. economy through pay- ment of taxes or use of American products, materials or labor. The business entity must further qualify under the criteria set forth in the SBA Small Business Size Standards Regulation, Title 13, Part 121 of the Code of Federal Regulations. In making a detailed definition, the SBA may use a number of criteria, including the number of employees; annual receipts; affiliates; or other applicable factors. For information on specific industry classifications (manufacturing, construction, services, transporta- tion, refined petroleum products and research development, development and testing) and refinements of the general definition of a small business, contact your nearest SBA District Office. 2. What is FACNET? The Federal Acquisition Streamlining Act of 1994 established a simplified-acquisition threshold of $100,000. It also required that a government-wide computer system, the Federal Acquisition Computer Network (FACNET) be implemented no later than January 1, 2000. Once FACNET is in place, the entire procurement process, from solicitation through award and payment, will be done electronically. To access the FACNET System you must use the services of a Government certified Value Added Network/Service (VAN/VAS) provider or become a certified VAN/VAS. The latter requires a substantial investment. You may contact the Department of Defense Electronic Commerce Information Center by calling 800-334-3414. 3. How do I find out who in the government purchases my product or service? Consult the U.S. Government Purchasing and Sales Directory when put online here in the near future. 4. What is an IFB, RFP or RFQ and what is the difference? Although these terms (acronyms) are still used, two of them now have different meanings than they did in the past. IFB now refers to Sealed Bidding and RFP now refers to Negotiated Procurement. RFQ still refers to requesting oral or written prices on small purchases. 5. What is a DUNS number, why do I need it and how do I get one? DUNS stands for DATA UNIVERSAL NUMBERING SYSTEM and is used by the Govern- ment to identify each contractor and their location(s). The number is also required to register with the Central Contractor Register (CCR) that is used by the government's electronic commerce/electronic data interchange (EC/EDI) system called FACNET. If you do not have a DUNS number, the government has an arrangement with Dun and Bradstreet (D&B) to provide one at no cost. You can contact D&B on 800-333-0505. 6. What is the Commerce Business Daily (CBD) and how do I get it? The CBD is the public notification media which U.S. Government agencies use to identify proposed contract actions and contract awards. It is published in five or six daily editions as necessary. Contracting officers are required by the Small Business Act and the Federal Procurement Policy Act to publish proposed contract actions expected to exceed $25,000 and contract awards of $25,000 or more. Some exceptions apply to the require- ments. Prime contractors are also permitted and encouraged to publish subcontracting opportunities in the CBD. 7. What is the 8(a) Program? The 8(a) program name is from Section 8(a) of the Small Business Act. The Act, as amended by Congress, created the 8(a) program so the U.S. Small Business Administration (SBA) could help small companies owned and operated by socially and economically disadvantaged persons develop their businesses. One of the business development tools of the 8(a) program is the award of Federal contracts. Under the program, SBA acts as a prime contractor and enters into contracts with other Federal Government departments and agencies. In its role as a prime contractor, SBA awards subcontracts for their performance by certified companies. 8. What about abandoning a contract? If a contractor abandons a contract or fails to perform satisfactorily, the contracting officer may terminate the contract for default and charge the contractor the excess reprocurement costs. i.e., the difference between the original contract price and the ultimate cost to the government. 9. What is the SBIR Program? The Small Business Innovation Research (SBIR) Program is a highly com- petitive three-phase award system which provides qualified small business concerns with opportunities to propose innovative ideas that meet the specific research and research and development needs of the Federal Govern- ment. 10. Are there any special procurement programs and preferences for women-owned-businesses? The Federal Acquisition Streamlining Act of 1994 establishes a 5 percent government-wide goal for contract awards to small women-owned businesses. At the Small Business Administration (SBA) we are determined both to establish aggressive goals and to develop meaningful initiatives in co- operation with other SBA program areas and other agencies to ensure that these new goals are achieved. Establishment of the Women-Owned Business Procurement Pilot Program is one example of such an initiative. Each of the 11 Federal agencies the SBA has identified to participate in the Pilot has designated a women-owned business "advocate" to act as a liaison. Together with other resource partners, SBA and these agencies are developing a systematic approach to expand the pool of women-owned firms receiving Federal contract awards. The SBA and the liaisons from each of the agencies provide outreach, training, and marketing assistance to women- owned businesses. They meet regularly to assess the progress of the pro- gram, resolve problems, and develop new initiatives. 11. What is the PASS system? The Small Business Administration's (SBA) Procurement Automated Source System (PASS) is a data base full of thousands of small companies (more than 200,000) that are interested in doing business with the various agencies of the Federal government or with their large prime contractors. PASS was developed to assist small businesses in their efforts to obtain a fair share of Federal procurement opportunities. PASS SYSTEM SUMMARY Contained in the profiles of each company are pertinent facts such as its type of business, number of years in business, nature of the ownership (minority-owned, women-owned, veteran-owned, etc.), location, quality assurance programs, Standard Industrial Classification (SIC) codes, DUNS number, etc. Also, included is a 350-character textual description of the firm's capabilities. Currently the data bank contains more than 38,000 minority-owned businesses, 52,000 women-owned firms and 61,000 veteran-owned businesses. Company profiles are "on-line" and may be searched using a number of data fields. For instance, the data base can be searched using the type of busi- ness such as research and development, manufacturing, service, or construc- tion, or it may be searched based on fields such as a company's Standard Industrial Classification (SIC) code(s), Federal Supply Codes, Product Service Code(s) or DUNS number. The aforementioned are just a few of the categories in which PASS users may instantly obtain a printout of selected small businesses having related capabilities. The databank can also be searched by geographic location, type of ownership, labor surplus area, quality assurance programs as well as other data elements. Access to the information in PASS is provided to contracting officials for the primary purpose of affording federal contract and subcontract oppor- tunities to the small business community. Currently, PASS has nearly 1,000 direct access users. Many of these users tap in to PASS every day to find potential small businesses to supply the government and large prime con- tractors with goods and services. On average, these users spend more than 9,500 hours a year searching for small businesses which can provide what they need. REGISTERING ON THE PASSDATA BASE There is no cost for listing a company in PASS and getting it listed is simple. PASS application forms are available by calling the SBA Answer Desk at 1-800-8-ASK-SBA and selecting the message for Government Contracting, or by calling the PASS contractor at 1-800-231-PASS (7277). The form which takes just a few minutes to complete will be mailed immediately. Registrants should realize that PASS was established and designed to supplement a company's regular marketing and sales efforts. Entering a company's profile in PASS does not assure contracting opportunities. ACCESSING THE PASS DATA BASE Organizations can obtain direct access to PASS easily with any of a wide variety of micro computers or terminals. Specifically, PASS requires an asynchronous remote terminal or microcomputer that operates at 9600 baud or less in the full duplex mode with even parity and uses the 8 bit American Standard Code for Information Interchange (ASCII) code. The cost to access PASS directly is minimal. You pay only for the time you spend on-line with the data base. The charge is simply $38.00 for each hour that you are connected to the system with a minimum of one hour per month. Usage charges are prorated to a tenth of an hour and are billed quarterly. Credit cards and purchase orders are accepted. Additionally, there are no long distance telephone charges. Access is provided through local nodes of nationwide networks. Access through Internet is expected in April 1996. If you would like to access the PASS system directly from your own work- station, please contact the PASS contractor at 1-800-231-PASS (7277). They will provide a User's Guide, a training diskette, user-id, password and log-on instructions. Following system access, you will be billed quarterly by Data Management for your actual usage.