* 70% of Government Contracts below $150,000 are awarded using Simplified Acquisition Procedures *
(the Secret to Success in Government Contracting for Small Businesses)
Useful Facts About Small Businesses & Government Contracting:
- 23% of Federal Contracting Dollars are Set-Aside for Small Businesses
- Federal Contracts $150,000 and under are commonly called “Small Business Set-Asides”
- Only 30% of these Small Business Contracts are found and won on FBO (FedBizOpps)
- Contracts below $25,000 are almost never posted to the public, commonly called “No-Bid Contracts”
Simplified Acquisition Procedures (FAR Section 13)
Simplified Acquisition Procedures are a contracting method which seeks to reduce the amount of work the government must undertake to evaluate an offer and award it to a Small Business. When Contracting Officers or Federal Agencies choose a vendor in a Simplified Acquisition Procurement for contracts under $150,000 (current Simplified Acquisition Threshold) they need not bother with the formal evaluation process, obtaining multiple bids, conducting market research and the Contracting Officer can directly award the contract by choosing the vendor themselves. FAR Section 13 as well as other amendments removed competition restrictions on government purchases under $150,000 which reduced the amount of steps needed to award contracts to Small Businesses. These steps highly improved opportunities for Small, Small Disadvantaged, Woman-Owned, Veteran-Owned and HUBZone Small Business Concerns. These “Small Business Set-Aside Certifications” provide the maximum practicable amount of opportunities for these Certified Small Businesses to respond to solicitations issued using these Simplified Acquisition Procedures.
The purpose of creating the Simplified Acquisition Procedures were to:
- Reduce Administrative Costs
- Improve Opportunities for Small Businesses to obtain a fair proportion of government contracts
- Promote Efficiency and Economy in Government Contracting
- Avoid Unnecessary Burdens for Agencies and Small Business Contractors
- Increase the speed at which a contract can be awarded and completed by a Small Business
- Increase the number of Small Businesses that can enter Government Contracting and fulfill Government Contracts (less burdensome, much easier, much faster, past performance not required)
Why Simplified Acquisition Procurements (SAP) Improve Opportunities for Small Businesses:
Simplified Acquisition Procurements (SAP) under $150,000 give an edge to Small Businesses with limited or no past performance as the Contracting Officer by-passes the FAPIIS (a Past Performance Retrieval System) research step which is utilized when choosing bidders while awarding most Federal Contracts outside of SAP or above the $150,000 Simplified Acquisition Threshold. Therefore Simplified Acquisition Contracts under $150,000 offer an easier federal buying process for both the Contracting Officer and Small Businesses themselves. Unlike the normal bidding process, vendors do not have to supply an exact quotation for the service and/or goods. Simplified Acquisition Contracts allow Contracting Officers to pay with a SMART Pay Card or via a Blanket Purchase Agreement (BPA) and can be issued immediately and in large volume if required.
The dollar value of contracts allowable under Simplified Acquisition Procedures (SAP) for Small Businesses is theoretically capped at $150,000. However under a pilot program that the government keeps extending incrementally (since at least 1997), Simplified Acquisition Procedures can be used in procurements worth up to $6.5 million, provided that a contracting officer “reasonably expects”, based on market research, that offers will include ONLY commercial items not worth more than that.
FAR 13.401-13.404 provides procedures that allow faster payments under limited conditions to a contractor prior to the Government’s verification (approval) that the supplies have been received and accepted. The procedure provides for payment for supplies based on the contractor’s submission of an invoice that constitutes a certification that the contractor has delivered the supplies to a post office, common carrier or point of first receipt by the Government. The contractor shall replace, repair or correct supplies if not received at the destination, damaged during transport or does not conform to the purchase agreement. As long as the contractor has provided one of the above mentioned certifications of delivery and the items have valid means of making it to the procurement destination, the contract can be approved and completed immediately.
The Simplified Acquisition Procedures were created to reduce the amount of time it took to award and fulfill a contract including the amount of work the Contracting Officer must undertake when evaluating an offer or awarding a contract under the Simplified Acquisition Process. The purpose of the Simplified Acquisition Procedures were to help Small Businesses win government contracts between $3,500 and $150,000 faster, easier and less costly on both sides. Utilizing the Simplified Acquisition Procedures are vital to becoming successful in the federal marketplace for Small Businesses looking to compete in the “Small Business Set-Aside” and “No Bid Contracts” arena. There are a specific set of items to have in place to qualify for and be awarded contracts under FAR 13 Simplified Acquisition Procedures (SAP). As 70% of Federal Contracts below $150,000 are awarded using these procedures, it is crucial that a Small Business properly understands and has in place the items and resources Contracting Officers need and utilize when awarding such contracts.
How can I position my Small Business to Qualify For & Win Government Contracts using Simplified Acquisition Procedures?
Even though a Small Business may be eligible, what do you need in place or what do you have to do to actually win these types of contracts?
United States Business Registration is the oldest private organization specializing in the System for Award Management Registration (SAM Registration, previously CCR & ORCA) and Small Business Set-Aside Certifications (Woman-Owned, Veteran-Owned, Minority-Owned, HUBZone, etc.). In our 8+ years operating (prior to SAM’s creation), we are the ONLY organization to maintain a grade letter “A” with the BBB (Better Business Bureau). We typically do not offer GSA Schedules as only about 5% of companies with GSA Schedules actually obtain business by having a GSA Schedule in place.
USBRI asks some basic preliminary questions to see if a business qualifies to be a vendor for Federal Government Contracts in general. If so, we will conduct a little more research to:
- View contracts previously awarded in any specific industry
- Locate available contracting opportunities in that industry
- Locate past and future spending trends for that industry to find where the growth might be
- Look at the level of competition for specific business types and Set-Aside status if it applies
- Look at what your current competition is winning
- Uncover the techniques being utilized by similar businesses that are being successful