Maine PTAC Newsletter February 2022

Helping businesses find, win and perform on government contracts • maineptac.org

PM's Corner

A monthly feature from the ME PTAC Program Manager,

Kenneth Bloch

Increasing Competition and SB Participation

DoD just published a report on increasing competition within the defense industrial base (DIB) in response to an Executive Order from President Biden.

Among other things, it notes that too many mergers have been allowed to take place between the large firms, effectively going from 51 to 5 aerospace and defense prime contractors, limiting competition and innovation. It also addresses the shrinking number of small business defense contractors.

The report notes that over the past decade, small businesses in the DIB shrank by over 40% and the data shows that if things continue along the same trend, DoD could lose an additional 15,000 suppliers over the next 10 years. Given the importance of small businesses, the report identifies this as a national security risk. The report makes two recommendations regarding small businesses:

Increasing New Entrants. To counteract the trend of overall shrinking of the DIB, DoD should endeavor to attract new entrants to the defense marketplace by reducing barriers to entry.
Increasing Opportunities for Small Businesses. DoD should increase small business participation in defense procurement with an emphasis on increasing competition in priority industrial base sectors.

Maine PTAC would like to hear from you on these topics. If you have been unsuccessful in getting into the defense marketplace, what barriers did you face? What should DoD do to increase opportunities for your business?

Delayed Start for 2022 NAICS Codes

Bryan Wallace, Senior Procurement Counselor

The Small Business Administration (SBA) establishes the size standards by which businesses are measured against to determine if they are “small” or not. This process is updated every five years and 2022 is the newest release. All told, about 170 codes have been impacted or created in this latest edition. However, just because the 2022 NAICS codes are available right now, doesn’t mean you need to go searching around and trying to use them just yet (as I did). In fact, don’t.

First, the SBA must update its ‘Table of Small Business Size Standards’ to NAICS 2022. This requires the SBA to go through the Federal rulemaking process, which involves a period of public comment, etc. It isn’t a quick process. Using NAICS 2022 codes now will produce errors in SAM and in FPDS-NG because the standards aren’t yet in place. Therefore, the SBA advises that all procurement activities continue using the NAICS 2017 until October 1, 2022. At that point the SBA anticipates they will have new size standard tables implemented.

SBA Offers Surety Bonds

Dana Delano, Procurement Counselor

Over the years, I have seen several federal contracts that require Surety Bonds as part of the bid and award of any contract. Typically, they are for service contracts on construction projects, but they can also be requested on most any bid for several reasons. It could be a ‘bid bond’ which ensures that the winning bid will not back out and require the agency to start the process over again. It could be a ‘payment bond’ that ensures full payment to suppliers and subcontractors used to complete the contract. Or a ‘performance bond’ to ensure full completion of a contract by a small business. Whatever it may be, the US Small Business Administration has a surety bond program with surety company partners to guarantee surety bonds so small businesses can qualify for more projects.

This is a win for small businesses that were not able to bid on jobs requiring bonding and a win for the government as more qualified companies will be able to bid on their projects.

In order to be eligible, a company must qualify as a small business according to the SBA’s size standard. The SBA will guarantee bonds up to $6.5 million for non-federal contracts and up to $10 million for federal contracts. All performance and payment bond guarantees require a Bond Guarantee Fee of .6% of the contract price. The SBA does not charge a fee for bid bond guarantees.

This could be a valuable tool if you find a contract that requires some form of surety bond to bid on the contract. You can find additional information and a list of SBA approved surety bond companies on their website: www.sba.gov, or talk with your PTAC counselor, it is what we do.

Changing of the Guard in Downeast

Katie Bragg, Procurement Counselor

For the past four years, I have had the pleasure of being the PTAC counselor for the Downeast area of Maine. I have thoroughly enjoyed working with all of you and helping guide you through the processes of government contracting, but I am leaving Maine PTAC and taking on a new role at Sunrise County Economic Council.

Though I will be moving into the position of Entrepreneurship Program Manager, I will be handing you over to the new Downeast counselor, Jessica Greeley, who started on February 14th. She, too, is located in Machias at Sunrise County Economic Council. Over the next few weeks, I will be taking Jessica out to meet some of you.

If you’d like to reach Jessica her number will be the same as mine (207)620-2273 and her email is jgreeley@sunrisecounty.org. And if you have questions for me or you’d like to reach me for any reason, my email is the same, kbragg@sunrisecounty.org and my new number is (207) 259-0053. I am sure to see many of you around and while I am leaving the government contracting to someone else, I will still be working with the businesses of Washington County and beyond. So, from me, thank you for your time over the last few years. I know I am leaving you in very capable hands.