Recent rules changes

WOSB/EDWOSB Certifications

Congress changed the 2015 law authorizing contract set-asides for women, eliminating SBA’s authority to maintain a repository for contract-specific certification purposes, leaving third-party certifications as the only legal alternative for WOSB and EDWOSB set-aside contracts. Since the approved third-party certifications all have some associated cost to the participant, many women business owners decried the move, because of all of the certifications used in federal contracting, only women were required to pay a fee to be certified. SBA has taken steps to manage this situation.

The repository continues to be open, and has been upgraded. SBA acknowledges that while the law changed, the agency is not implementing it until rules established under the old law are updated. As that is happened, SBA is developing a certification program for women, which will utilize the new repository, and will continue to offer a free alternative to third party certification. Details are available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

*Note that third party certifications may provide additional benefits outside of government contracting.


 Earlier this year, SBA reworked the list of NAICS codes eligible for set-asides for women, which has improved the program dramatically. As the result of those changes:

  • The number of NAICS codes eligible increased by 35 percent to 445;
  • The balance between WOSB shifted sharply; now 82 percent of the eligible NAICS codes are approved for WOSB set-asides.

Historically, this program has foundered, most likely because contracting officers found it difficult to understand what contracts could be set aside for women and because the narrow requirements for EDWOSB often meant that the 'rule of two' could not be met. The end result was that few WOSB or EDWOSB set-asides were contracted. Adding 115 additional NAICS codes and making most codes eligible for any woman-owned small business has made set-asides for women more of the norm and more successful.

The current list of WOSB NAICS codes is available here.

EDWOSB NAICS codes are available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

SBA Mentor-Protégé

On July 25, SBA published a final rule for its new Mentor-Protégé program, which establishes a mechanism designed to benefit both small business protégées and their large business mentors. In this program, small businesses receive meaningful development assistance from seasoned prime contractors, and the primes get partial access to small business set-asides when they joint venture with their protégé. Expect large prime contractors to seek aggressively small business protégés with strategic capabilities.

The 7/25/2016 Federal Register publication of this new rule is available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

Limitations on Subcontracting

A lesser-known rule limiting the portion of work that can be subcontracted in set-aside contracts (whether set-aside for small business, SDVOSB, HUBZone or WOSB/EDWOSB) was changed by Congress in 2013. It has taken quite a while for the rules to catch up and for the contract clauses to come into use, but the final rule became effective on June 30, 2016 for contracts executed after this date..

Most important is a change to the calculation of the percentage of subcontracting. Instead of being based only on the labor portion of the contract, the total contract value will be used. This typically will decrease the amount of subcontracting allowed. The affect is primarily for service and construction contracts; situations covered by the non-manufacturer rule are not affected.

Congress has added substantial penalties for violations of this rule. More information is available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

Similarly Situated Entity

Along with the more burdensome changes to limitations on subcontracting, Congress has liberalized the new rule by establishing the similarly situated entity. This enables all set-aside contract awardees to fulfill part of their self-performance requirement by subcontracting to another small business that qualifies for the set-aside category.

This helps take some of the sting out of the increased self-performance requirements of the recently amended limitations on subcontracting and sets up a new dynamic that may encourage teaming among similar or related small businesses that share a socio-economic program status. More information is available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

SDVOSB/VOSB Application Procedure

The Department of Veterans Affairs Veterans First Verification Program is launching a verification process called MyVA Verification. VA’s Vendor Verification Pages will be offline 8/11-15. We see this as a continuation of VA’s highly successful drive to improve the efficiency and accuracy of the SDVOSB/VOSB verification process.

More information on the VA verification program is available here.

For more information on being verified and opportunities for veterans in government contracting, contact the New Hampshire Government Contracting Assistance Center.

Kingdomware Decision

Unique among federal agencies, the Department of Veterans Affairs is subject to a policy called Veterans First, which gives priority in contracting to veteran-owned small businesses;l first priority goes to SDVOSB and second to VOSB. Only if the procurement requirement cannot be satisfied with a fair and reasonable price, quality and delivery may VA decline to set aside for veterans. This policy has been modified to solicit contracts more broadly. In the Kingdomware case, the VA argued that because it is meeting its goals for SDVOSB and VOSB, it no longer has to observe the Veterans First policy. This summer, the U.S. Supreme Court unanimously disagreed, holding that Veterans First means veterans first. As a consequence, VA is once again focused on contracting with SDVOSB and VOSB, which is good news for veterans, and not so good for non-veteran small businesses.

The Kingdomware decision is available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

Small Business Size Standards and 2017 NAICS Codes

Earlier this year, sweeping changes in small business size standards were implemented by the SBA, so it is worth checking the standards for the NAICS codes that are relevant to your business. Many size standards were increased - often dramatically - so companies near the old size standard may now be small once again. Good news for larger small businesses; more competition for smaller small businesses.

The current SBA Table of Small Business Size Standards is here.

Also, NAICS codes are revised every five years; look for a new revision to be effective Jan. 1. We believe that these revisions will be minor.

A preview is available .here; look under announcements.

Contact the New Hampshire Government Contracting Assistance Center for help understanding the impacts of these changes on your business.

Cyber Incident Compliance

For defense contractors and subcontractors, the cybersecurity requirements of DFARS 204.73 and the clauses at 252.204.7008,7009, and 7012 have been an issue since they were enacted in 2013 and rolled out Dec. 30, 2015. Unfortunately, when enacted the rule referred to a vague NIST stand, which did little to explain what compliance would look like or how it could be accomplished. The mist is starting to clear around this important topic. IT consultants and commercial software products are now available to help small businesses that are subject to this rule comply.

These provisions are available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

Micro-purchase Threshold to $3,500

We didn’t pay much attention last summer when the micro-purchase threshold was raised, so it’s late for us to be reporting that it changed from $3,000 to $3,500 on July 2, 2015. Remember when it was $2,500? Micro-purchases are small purchases generally made by a government purchase card and can be conducted with reduced advertising, competition and documentation.

For more information on selling to the federal government via the Government Purchasing Card, contact the New Hampshire Government Contracting Assistance Center.

NAICS codes required for 1st tier subcontracts

Large Prime contractors are required to assign a NAICS code to every subcontract.

13 C.F.R. 125.3(c) states: (v) The contractor must assign each subcontract the NAICS code and corresponding size standard that best describes the principal purpose of the subcontract (see § 121.410). The prime contractor may rely on subcontractor self-certifications made in SAM (or any successor system), if the subcontract contains a clause which provides that the subcontractor verifies by submission of the offer that the size or socioeconomic representations and certifications in SAM (or any successor system) are current, accurate and complete as of the date of the offer for the subcontract. A prime contractor or subcontractor may not require the use of SAM (or any successor system) for purposes of representing size or socioeconomic status in connection with a subcontract.

View 13 C.F.R. 125.3 in its entirety here.

For more information about subcontracting plan requirements, the New Hampshire Government Contracting Assistance Center.

Strategic Sourcing/Category Management

While the federal government continues to promote Strategic Sourcing/Category Management (you might recognize these as vendor consolidation), there are signs that not all is well with the Federal Strategic Sourcing Initiative (FSSI). GSA Schedule 75 (office supplies) was one of the first casualties of the program; it closed temporarily in 2010 and is remains closed.

Speculation is that GSA is considering reopening Schedule 75.

More information on GSA Schedule Contracts is available here.

For more information, contact the New Hampshire Government Contracting Assistance Center.

The NH Government Contracting Assistance Center (NH GovCon) is funded in part through a cooperative agreement with the Defense Logistics Agency. We are also funded by the NH Department of Business and Economic Affairs (DBEA), and we operate as a program within the Division of Economic Development (DED).