What is Affiliation and Why Should I Care?

Those of you that have been around Federal contracting for a while have likely heard the term, “Affiliation”. But what is it exactly and why does it matter?

As we have written in previous newsletters, a business is determined to be small if it is below the threshold specified by SBA in its NAICS code(s). For example, if you were a testing laboratory (NAICS 541380) and you had less than $15 million in annual sales, then you would be small. Or if you manufactured cheese (NAICS 311513) and you had fewer than 1,250 employees, you would be small. That’s important, because if you are small, you can compete for work set aside for small businesses only.

Pretty straightforward, right? Well since this is the Federal government, we need to make it a bit more complicated.

“Affiliation exists when one business controls or has the power to control another or when a third party (or parties) controls or has the power to control both businesses. Control may arise through ownership, management, or other relationships or interactions between the parties” (SBA definition). So if two or more businesses share management, family relationships or even various type of contractual relationships, they can be considered affiliated.

Why does this matter? Because in determining small business size for Federal contracting, you must ADD the companies sizes together if they are affiliated. So if you are affiliated with someone, you could potentially be too big to qualify as a small business if the combined numbers exceeded the NAICS size standard.

There are a lot of details that go into this, and there are exceptions to affiliation as well (this if the Federal government after all), so please check with your local PTAC counselor for more information.
Ken Bloch
Maine PTAC Program Manager
Matchmaker Update
The 2019 New England Regional Matchmaker website is coming in the next couple of weeks! We're looking forward to launching the site that will allow attendees to register, view a list of confirmed contractors, access event materials, and much more.

The 2019 New England Regional Matchmaker is hosted by Maine PTAC, the U.S. Small Business Administration and New Hampshire PTAC. The event will take place at the DoubleTree by Hilton in Portland Maine on Thursday, April 25th and Friday, April 26th.
Upcoming Events
Date: Thursday, January 17th
Time: 8:30am - 10:00am
Location: EMDC, Bangor
Register: Click here
Date: Wednesday, February 20th
Time: 8:30am - 10:00am
Location: EMDC, Bangor
Register: Click here
Date: Tuesday, March 5th
Time: 10:00am - 12:00pm
Location: SCEC, Machias
Register: Click here
Modernizing DUNS

Starting back in 1963, businesses have been assigned a 9-digit number by Dun & Bradstreet. More commonly known as a DUNS number, it’s a worldwide standard to identify all business organizations; one that is required by GSA’s System of Award Management (SAM).

As someone who is much younger than the rest of our PTAC staff (sorry team), it’s important to recognize and highlight the current business atmosphere. We no longer live in a time of “brick & mortar” business models. A business may no longer have a “physical” business location. A great example being during the 1990s, taxi drivers would have what was called a home office that they’d report to and do business under. However in 2019, that taxi driver has been replaced by an Uber/ Lyft driver, who works via his/her phone app, essentially reporting to only themselves with no physical home office.

Therefore, what Dun & Bradstreet suggested in a short two minute clip last month, was shifting the focus from a business’ physical location to their point of commerce. Where are they doing business? This simple change will allow the “digital” or “gig” company to register in Dun & Bradstreet. In the example given by Dun & Bradstreet, the start-up company in a coffee shop using money transfer apps to conduct business will be able to register with their system, though early, this is the vision of a modern DUNS system.

The business world is changing and Maine PTAC will continue to change with it, helping you and your business adapt. If you or another business needs assistance registering with Dun & Bradstreet, contact your local PTAC Counselor at www.maineptac.org.
What Does A Government Shutdown Mean to Contractors/Subs?

Hopefully, by the time you’re reading this article, the topic of “government shutdown” will no longer be an immediate issue. However, it is an important issue at the moment and unfortunately one that might arise again in the future.

During a Federal government shutdown, departments are without funding. This could include (but is not limited to) the Departments of the Interior, Agriculture, Defense, State, Housing and Urban Development, Treasury, Commerce, and Homeland Security. That means contractors with existing contracts with those agencies could also face a temporary loss of revenue by being unable to work.

Government contractors and subcontractors should prepare in advance, if not already prepared, for the consequences. During previous government shutdowns, government agencies and departments issued stop-work orders, bringing work on government contracts/projects to a standstill.

For small businesses this has a serious impact. It is important to check on your contracts and sub-contracts to see if a stop work order has been issued. If a stop work order has been issued you will need to ensure all expenses are accounted for and communicated to your customer to ensure you can recover costs incurred from a stop work order. That could include costs right up to the stop work order date and any additional costs from restarting the project once the stop work order is lifted. 

Lastly, and just as important; If a stop work order has not formally been issued you are obligated to continue the project. For more information, please reach out to your local PTAC counselor.
Is this Real?

As many of you know, once you are registered in SAM.gov, you will start to get many, MANY emails concerning your need to renew or contact them. Many of these are not real. You may also get emails and calls that tell you that if you pay these people, they will help you get on government agency lists, so you’ll get more contracts. Or they’ll provide essential services that you will need to contract with the government. They may even say the exact terms or phrases that you use in your business profiles or on your website. They might tell you that if you don’t hurry up and contact them your SAM.gov registration will be no longer active. They may say that you need to renew your CAGE code.

The groups all have one thing in common; they want to charge you for the same services that we, the PTAC counselors do for free. They are often persistent and promise things that they can’t exactly follow through with. 

How do you know if it is real? Often if you scroll to the bottom on the email there is a disclaimer stating that they are not affiliated with any government agency. But this is getting harder, some are using .gov addresses now. Our suggestion is that if in doubt just forward the email to your PTAC counselor. We can tell if they are a legitimate email, and if we aren’t sure, we know how to find out. 
Selling to the State of Maine is not that Hard

The State of Maine has about 350 organizational units, including Departments, Agencies, Colleges, Universities and Commissions with locations throughout the State. It is a treasure-trove of opportunity for Maine small businesses wanting to get started in government contracting. The Maine Department of Administrative and Financial Services, Division of Procurement Services buys a wide variety of goods such as automobiles, food products, medicines, machinery, equipment, boats, snowmobiles, ATV’s, UTV’s, paper, furniture, and clothing. These items are procured by trained professional Procurement and Contracting Specialists who buy from both small and large qualified businesses.

The objective of the Division is to procure materials and services representing the best value, taking into consideration factors such as initial cost, suitability for intended purpose, operation, quality, maintenance, etc., as well as delivery in time for the need to be met. 

Over the past 10 years, the State has upgraded its e-procurement process to include an integrated system called AdvantageME. The new system brings together most commodity type items from many different departments, agencies, colleges, universities and commissions into one location.  A key feature of the AdvantageME E-Procurement module is the opportunity for vendors to register in Vendor Self Service (VSS) for the commodities and services they are able to provide to the state. Then, when the state issues a solicitation through AdvantageME for a vendor's products or services, Maine PTAC’s Bid Match program will pick it up and send it directly to you, the vendor. Talk with your PTAC procurement counselor to learn more about this important resource to your business and start selling to the State of Maine; we are here to assist you