1 / 19

Small Business Size and Affiliation Issues: Is Your Small Business Actually Small?

Small Business Size and Affiliation Issues: Is Your Small Business Actually Small?. 2018 National HUBZone Conference. Chantilly, VA October 11, 2018. www.koprince.com www.smallgovcon.com Twitter @ mtschoonover. Matthew Schoonover 785-200-8919 mschoonover@koprince.com. Discussion Summary.

clugo
Télécharger la présentation

Small Business Size and Affiliation Issues: Is Your Small Business Actually Small?

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Small Business Size and Affiliation Issues:Is Your Small Business Actually Small? 2018 National HUBZone Conference Chantilly, VA October 11, 2018 www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  2. Discussion Summary • Why the size of your business matters • How to determine the size of your business • Affiliation: is your small business actually small? www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  3. But first, a quick plug. www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  4. Why the size of your business matters www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  5. Why the size of your business matters • Uncle Sam is the world’s largest purchaser of goods and services • More than $500 billion annually • Spread across all agencies (civilian and defense) www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  6. Why the size of your business matters • Small Business Act: sets goals for small business participation • 23% of all prime contracts to small businesses • 2017: 23.88% (≈ $106B) • HUBZone goal: 3% • 2017: only 1.65% awarded to HUBZones (≈ $7B) • Federal government has historically failed to meet HUBZone goal • Small business awards • Set-asides/restricted competition • Sole-source awards www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  7. Is your small business actually small? www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  8. What is a “small business?” • Size falls under the standard for the NAICS code assigned to the solicitation • NAICS codes are established by Census Bureau for all industries • E.g., NAICS code 541330 (Engineering Services): This industry comprises establishments primarily engaged in applying physical laws and principles of engineering in the design, development, and utilization of machines, materials, instruments, structures, processes, and systems . . . . • Small Business Administration creates size standards for each NAICS • Revenue-based • E.g., NAICS code 541330 carries a $15.0 million size standard • Employee-based www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  9. Determining the size of your business • Revenue-based size standard • Average annual receipts for the last three completed fiscal years • Annual receipts: total income + cost of goods sold • SBA will look at tax returns; may look at other non-contradictory info • Employee-based size standard • Average number of employees based on number of employees for each of the pay periods for the preceding 12 calendar months • Employees: employed full-time, part-time, and other basis • Volunteers are not employees • Your size plus your affiliates’ size www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  10. Affiliation: Is your small business actually small? www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  11. Affiliation: a very dirty word • Affiliation might turn your small business into a large one! • Size is determined by adding the receipts/employees of the concern and all of its affiliates • If found to be other-than-small, your business could lose its contract www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  12. What is affiliation? • A method by which the SBA will find two companies closely-related, so as to impute the size of one onto the other • One firm controls or has the power (positive or negative) to control the other www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  13. Causes of affiliation • Common ownership • If owner of one business owns 50%+ of another, automatic affiliation • Major minority owners is presumptive control • Common management • Officers/directors of one company control another • Identity of interest • Shared business interests among family members • Economically dependent (70%+) on another business • Newly-organized concern • Former officers/directors of one company spin-off another, and the new business relies on the other for assistance www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  14. Affiliation based on joint ventures • Long-standing relationship of JV partners • More than 3 contract awards in 2 years • De facto joint venture: ostensible subcontractor affiliation • Subcontractor is performing “primary and vital requirements” • Prime contractor is “unusually reliant” on subcontractor • Beware the risk factors! www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  15. Ostensible subcontractor risk factors • Subcontractor is incumbent, but ineligible for prime award • Prime hires subcontractor personnel en masse • Beware hiring subcontractor personnel as project management/supervisors! • Prime relies on subcontractor for experience • Subcontractor performs a significant amount of work (esp. if “primary and vital”) • Subcontractor provides significant facilities, equipment, resources needed to do the work www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  16. Defending against affiliation • Recognize risks • Admitting your business has a problem is the first step to recovery • Audit size and affiliation issues before size is protested • A size protest might lead to your company losing an award • Address them! • Affiliation isn’t forever • Many presumptions are rebuttable • Clear line of fracture • Mentor/protégé agreement with affiliate www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  17. Another plug! www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  18. Questions? Any questions? Thank you! www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

  19. For More Information Matthew Schoonover Partner (785) 200-8919 mschoonover@koprince.com Twitter @mtschoonover Visit SmallGovCon.com to sign up for our free monthly newsletter. www.koprince.com www.smallgovcon.com Twitter @mtschoonover Matthew Schoonover 785-200-8919 mschoonover@koprince.com

More Related