Small Business Concerns Policy

Policy Statement

It is the policy of Columbia University that Small, Small Disadvantaged, HUBZone, Women-Owned Small, Veteran and Service-Disabled Veteran Owned Small Businesses (i.e., collectively Small Business Concerns), shall have the maximum practicable opportunity to provide goods and services to the University.

Reason(s) for the Policy

For contracts over a certain dollar threshold awarded by the federal government, a formal plan is required outlining purchases with Small Business Concerns for various categories of spend under the contract.

Primary Guidance to Which This Policy Responds

This policy is promulgated in accordance with Executive Order 11246 and Public Law 95-507 of the Federal government and their implementing regulations.

Responsible University Office and Officer

Responsible University Office: Purchasing

Responsible University Officer: Manager, Small Business Compliance and Vendor Outreach

Revision History

This policy revises the policy on Small Business Concerns located in the Purchasing Policies and Procedure Guidelines (Appendix 9), dated March 10, 2005.

Who is governed by this Policy

This policy applies to everyone working at the University, or working on behalf of the University, who manages any aspect of purchasing activity with University's federal funds.

Exclusions and Special Situations

This policy applies to all locations or organizations (internal or external to the University).

Policy Text

Public Law 95-507 passed in 1978 amended Section 8(d) of the Small Business Act of 1953 and created the foundation for the Subcontracting Assistance Program as it is known today. The term Subcontracting Assistance Program and Subcontracting Plan applies to prime contractors and subcontractors to the federal government. It changed the participation of large contractors in the program from voluntary to mandatory, and it changed the language of the law from "best efforts" to "maximum practicable opportunities." Other key features include a requirement that all federal contracts over the simplified acquisition threshold as stated in Appendix A, as amended, provide maximum practicable opportunity for small and small disadvantaged businesses to participate.

The Flow-Down Process

When the federal government issues a contract to the University, the University becomes the prime contractor for the federal contract. If the prime contractor issues a subcontract to a firm to furnish supplies or services to or for the prime contractor, the firm becomes the subcontractor. Therefore, if the University receives a subcontract from another institution as the prime contractor, then the University becomes the subcontractor for the federal contract. The University can be a subcontractor with a flow-down plan, or have a subcontractor with a flow-down plan. The requirement for a subcontracting plan flows down to all other-than-small business subcontractors with subcontracts over the prescribed dollar threshold as stated in Appendix A. According to the Small Business Act the University is considered an other-than-small-business, an other-than-small contractor, and, when acting as a subcontractor, an other-than-small subcontractor.

According to the statute, an other-than-small prime contractor with a subcontracting plan must require all other-than-small subcontractors to adopt a plan similar to its own. The prime contractor is responsible for obtaining, approving, and monitoring the subcontracting plans of its other-than-small subcontractors. A prime contractor's subcontractor is referred to as the first-tier subcontractor. If the first-tier subcontractor is an other-than-small business and it subcontracts to another other-than-small business, it must require that firm (the second-tier subcontractor) to adopt a subcontracting plan similar to its own. If the second-tier subcontractor subcontracts to yet another other-than-small business (the third-tier subcontractor), it would have to require that company to adopt a subcontracting plan as well. This process continues indefinitely, as long as the subcontractors are not small businesses and their subcontracts are over the prescribed dollar threshold as stated in Appendix A.

Under the flow-down provision, other-than-small business subcontractors with subcontracting plans must submit Individual Subcontracting Report (ISR) and Summary Subcontracting Report (SSR) reports just as the prime contractors do. However, the other-than-small subcontractor must submit the ISR to its prime contractor or immediate higher-tier subcontractor rather than to the Government. This is done for monitoring purposes, and continues in this manner for all tiers. The other-than-small subcontractor still submits the SSR to the Government. This enables the Government to collect subcontracting statistics from all of the subcontracting tiers. The flow-down process is intended to ensure that all small businesses receive "maximum practicable opportunity" to perform on Government contracts and subcontracts in accordance with public laws, regardless of the subcontracting tier.

Subcontracting Requirements

Any other-than-small business that receives a Federal contract or subcontract over the prescribed dollar threshold stated in Appendix A must adopt a subcontracting plan with separate and distinct goals for small, small disadvantaged, small HUBZone, women-owned small, veteran-owned small, and service-disabled veteran-owned small businesses. The proposed subcontracting plan must be accepted and approved by the contracting officer before the contract can be awarded. Once approved, the subcontracting plan is incorporated into the resultant contract. This is significant because an other-than-small contractor that fails to make a good faith effort to achieve the goals in its subcontracting plan may be found in material breach of the contract and terminated for default, liquidated damages may be imposed, and future awards may be impacted. The other-than-small contractor or subcontractor is required to submit periodic reports to the Government showing its achievements against the goals in each of its subcontracting plans, along with a summary report showing its aggregate subcontracting achievements on all Federal contracts. Any company that receives a Federal contract over the simplified acquisition threshold must agree to provide maximum practicable opportunity to small, small disadvantaged, small HUBZone, women-owned small, veteran-owned small, and service disabled veteran-owned small businesses consistent with the efficient performance of the contract.

The Required Elements of a Subcontracting Plan

A subcontracting plan (see sample Subcontracting Plan Form in the attached Appendix B) is required to contain eleven elements, and the Federal Acquisition Regulations provide a detailed outline of these elements. They are:

(1) separate percentage goals, expressed in terms of percentages of total planned subcontracting, for the use of small business, small disadvantaged business, small HUBZone business, women-owned small business, veteran-owned small business, and service-disabled veteran-owned small business;

(2) total dollars planned to be subcontracted to each group;

(3) a description of the types of supplies and services to be subcontracted to each group;

(4) a description of the method used to develop each of the goals;

(5) a description of the method used to identify potential sources;

(6) a statement as to whether or not indirect costs were included in the subcontracting goals;

(7) the name of the subcontracting plan's administrator and a description of his or her duties;

(8) a description of the efforts that the company will make to ensure that all small businesses will have an equitable opportunity to compete for subcontracts;

(9) assurances that the company will "flow down" the subcontracting requirements to its subcontractors;

(10) assurances that the company will cooperate in any studies or surveys and submit periodic reports to the Government, including the standard forms Individual Subcontracting Report (ISR) and Summary Subcontracting Report (SSR);

(11) a recitation of the types of records the company will maintain to demonstrate its compliance with the plan.

Reporting Requirements for Other-Than-Small Businesses

• Standard Form ISR: Other-than-small business prime contractors must file a ISR, "Subcontract Report for Individual Contracts," with their procuring agencies semiannually during the performance of the contract and also upon each contract's completion. Other-than-small business subcontractors must file the ISR with the prime contractor or immediate higher-tier subcontractor rather than with the Government.

• Standard Form SSR: Other-than-small business prime contractors and subcontractors must periodically file a SSR, "Summary Subcontract Report," with their procuring agencies. If the procuring agency is a civilian agency, the SSR is required annually (by October 30th for the previous fiscal year ended September 30th); if the procuring agency is the Department of Defense, the SSR is required semi-annually (by April 30 for the first six months of the fiscal year and by October 30 for the entire fiscal year).

• Both other-than-small prime contractors and subcontractors must submit a copy of the SSR to the cognizant SBA Commercial Market Representative. The ISR and SSR are intended to document the dollars awarded to small, small disadvantaged, small HUBZone, women-owned small businesses, veteran-owned small businesses, and service-disabled veteran-owned small businesses. It is important to note that prime contractors may take credit for only their own subcontracting dollars, not for the dollars awarded by subcontractors at lower tiers.

Responsibilities

Research Administration (RA) - Central Administration office that supports the research mission of the University and ensures researchers have access to information they need to seek funding research, maintain sponsored projects, and adhere to all regulations. RA provides notification of federal contracts with Small Business goals with sufficient notification for the Principle Investigator (PI) to develop anticipated purchases under the federal contract and for the Small Business Program Manager to then source for Small Business Concern vendors availability and prepare the subcontracting goals for the contract. Furthermore, RA ensures that the University has a subcontracting plan for every award over the prescribed dollar threshold stated in Appendix A including the subcontractor to adopt a plan similar to the University's. In addition, RA provides updated account information to the Small Business Program Manager in order to report all expenditures for federal contracts.

Principal Investigator / Departmental Administrators - person in school or department who seeks to purchase goods or services with University federal funds, develops acquisition list for potential purchases under a contract application, works with Small Business Program Manager in developing subcontracting goals for contract, and utilizes Small Business Concern vendors whenever appropriate under federal contract with subcontracting goals.

Small Business Program Manager - person who resides in the Purchasing Office and has day to day responsibility for implementing the University's Small Business Program including enhancing, assisting, and coordinating Small Business procurement responsibilities for federal contracts and grants with the following responsibilities:

(1) Assure that the University's Small Business Concerns Program is widely publicized.

(2) Communicate with University Departments as necessary in order to increase awareness of the University's policy and commitment.

(3) Provide information concerning the program and policy guidelines to both internal and external parties.

(4) Ensure that requests for contracts are designed to permit the maximum practicable participation of Small Business Concerns.

(5) Identify and contact Small Business Concerns and coordinate inquiries from them about University opportunities.

(6) Assist Small Business Concerns to competitively conduct business with the University.

(7) Counsel Small Business Concerns, as requested, to assist in rectifying problems before they result in the loss of existing or future business opportunities.

(8) Attend procurement conferences and trade fairs, expositions and seminars.

(9) Assist in setting goals for the utilization of Small Business Concerns in the purchase of goods or services necessary for the fulfillment of federal contracts.

(10) Establish criteria for the utilization of small and small disadvantaged business concerns in the purchase of goods or services necessary for the fulfillment of federal contracts.

(11) Establish criteria for the acceptability of subcontracting plans submitted by prospective subcontractors with regard to federal contracts.

(12) Maintain the University's Small Business Program web site.

(13) Monitor the University's Small Business Program performance and make adjustments necessary to assist in achieving subcontract plan goals.

(14) Prepare, execute and submit reports in such form as the Government shall prescribe.

(15) Cooperate with authorized governmental agencies in such studies or surveys as may be required by them with regard to their examination of the University's compliance with public laws.

(16) Demonstrate compliance with the program by maintaining reports and records reflecting the University's efforts including:

• Records of outreach efforts
• Records of organizations contacted to identify Small Business Concerns
• Records of source lists, guides, and other data utilized to identify Small Business Concerns
• Records substantiating internal educational activities to encourage buyers and other responsible individuals to seek out and utilize Small Business Concerns when appropriate
• Reports reflecting the University wide purchases of products and services from Small Business Concerns
• Records to support data submitted on the standard forms.

Senior Staff Local and Small Business Program Committee - The University initiated a new Senior Staff Committee consisting of Executive Level University Officers. The Senior Staff Local and Small Business Program Committee meets quarterly with duties that include the following:

(1) Provide leadership in promulgating this policy and in fostering an environment that encourages Local and Small Business Concerns to participate in the economic opportunities arising from the University's business activities.

(2) Establish policy objectives so that Local and Small Business Concerns can qualify for University contracts commensurate with the merits of their offerings and their proven qualifications.

(3) Review progress reports and provide guidance for the Local and Small Business Program Initiative so that the Initiative objectives are monitored and achieved.

DA Small Business Compliance Committee - consisting primarily of Departmental Administrators as they are the primary point of contact for the individual contracts as well as manage, process, and execute the expenditures for sponsored projects has been established with the following duties:

(1) Review and Revise the methods and procedures by which to capture proposals and awards that meet SBA criteria for small business plans.

(2) Identify best practices and methods that can be implemented to provide better sourcing activities and communication.

(3) Foster and implement mechanisms for easier use of existing and new procurement vehicles for efficient ways to use small businesses.

(4) Redesign information systems to automate reporting and sharing information providing departments and small businesses with timely, relevant, and accurate information.

(5) Implement better vendor development ensuring two-way communication between the schools / departments and small businesses so that small business opportunities are effectively represented and communicated in all stages of procurement planning and execution.

Small Business Administration (SBA) Commercial Market Representative - located in regional SBA offices, conduct compliance reviews of prime contractors, counsel small businesses on how to obtain subcontracts, conduct matchmaking activities to facilitate subcontracting to small business, and provide orientation and training on the Subcontracting Assistance Program for both large and small businesses.

Definitions

Other-Than-Small Business - refers to any entity that is not classified as a small business. This includes large businesses, state and local governments, non-profit organizations, public utilities, educational institutions, and foreign-owned firms that receive Federal contracts if any portion of the contract is to be performed in the United States.

Small Business Concern - means a small business as defined pursuant to the Small Business Act and its implementing regulations and qualifies as a Small Business under the criteria and size standards.