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VETS-4212 and Contracting Compliance

If you’re a prime government contractor, or even a subcontractor, the term VETS-4212 might be familiar to you. While it’s one of the many FAR clauses that can be in a solicitation, VETS-4212 acts as a good example when it comes to government contracting and compliance within the government sales process. Before we dive into the importance of compliance and communicating flowdown clauses, let’s first take a look at VETS-4212.

VETS-4212

VETS-4212 is an annual report that is required to be filed by the U.S. Department of Labor (DOL) Veterans’ Employment and Training Services, or VETS. The VETS-4212 annual submission form must be filed by all federal contractors and subcontractors who enter into a contract larger than $150,000 with any department or agency of the United States for the procurement of personal property and non-personal services (including construction).

The annual filing period for VETS-4212 is August 1 – September 30, and the form can be filed at the Department of Labor website or mailed in. Filing online is preferred by the DOL and also allows for batch filing if you need to file for multiple locations.

Contracting Compliance

Why bring up VETS-4212? VETS-4212 is a good example of a flowdown clause that must be communicated between prime contractors and subcontractors. As a prime contractor on many government solicitations, it’s extremely important at JetCo Federal that we take precautions in understanding what FAR clauses and regulations need to be realized by our suppliers.

This is why maintaining relationships and having open communication with our suppliers is core to our business. We candidly talk about payment terms, flowdown clauses, and expectations when we’re working with our suppliers to ensure compliance within the complex structure of government solicitations. This style of communication, in addition to our prompt payments, has cemented us as a priority customer for our suppliers.

The VETS-4212 annual submission is no exception and must be discussed anytime a solicitation lists FAR Clause 522.222-37 or is over the $150,000 threshold. This is why with every contract we enter into, we develop a contract compliance matrix to ensure all requirements are met and all reporting needs are noted and clearly communicated.

Contract compliance can be a time consuming and confusing aspect of any government opportunity. It’s important that compliance, specifically when it comes to flowdowns and subcontractors, is clearly communicated and approached efficiently so that suppliers can do what they do best while we handle the fine print of government solicitations.

Are you a highly qualified supplier interested in working as a subcontractor on a government solicitation? Contact us to learn more.

Reliability During Uncertain Times

Over the past few months, the COVID-19 pandemic has caused the government’s buying methods to shift significantly. Though the traditional buying process is still in place, the government has turned to quicker methods, such as single-sourced non-competed contracts, to help get resources to where they are needed. However, this buying method has its downfalls. The government is struggling to reliably secure critical supplies. Here’s an example.

FEMA and Unusable Testing Kits

In May of 2020, the Federal Emergency Management Agency (FEMA) awarded a $10.2 million contract to Fillakit LLC, a company that was formed just six days before the contract was awarded. They also had no previous experience working with the government. Fillakit was formed by an ex-telemarketer who has been accused of fraudulent practices over the past two decades. Due to the hasty contract award, Fillakit supplied testing kits to the government. Now, the government has millions of testing kits that are unusable due to unsanitary manufacturing conditions.

Fillakit isn’t the only company that has been awarded a contract without having worked with the government before. A recent Government Executive article states that “federal agencies hastily awarded more than $2 billion in COVID-19 contracts to vendors who had no prior federal deals.” They also stated that “the federal government has committed more than $16 billion to more than 4,000 contractors in its attempt to address the spread of the novel coronavirus. More than 1,800 of those deals were given without competitive bidding.”

As traditional buying methods shift during COVID-19, it’s more important, now than ever, to ensure the government has access to and is working with highly qualified government contractors. Vetting processes need to stay in place to allow the government to reliably secure the critical supplies they need. It all comes back to working with a government contractor who is qualified. So, how do you identify a qualified government contractor?

How to Identify a Qualified Government Contractor

One quality of a highly qualified government contractor is strong past performance. Companies that show they have done similar work to the contract, and in a similar capacity, have the experience and expertise to meet the needs of a contract.

Another quality of a qualified government contractor is compliance processes. If a company is not compliant with their current contracts, the likely won’t be compliant with the upcoming contract. Make sure the contractor has compliance processes in place before awarding them the contract

These are just a few qualities of a qualified government contractor. Though COVID-19 has shifted the government’s buying methods, now more than ever, the government needs to work with highly qualified companies that bring trust and reliability to the table.

JetCo Federal is a supply chain management and warehouse supply company with a successful past performance managing diverse products for complex contracts. Compliance, trust, and efficiency are ingrained into our company, and we’re ready to embrace the challenges that come our way.

WOSB Program Self-Certification Changes

To participate in the Women-Owned Small Business (WOSB) or Economically Disadvantaged Women-Owned Small Business (EDWOSB) Program, a company must either self-certify through the Small Business Administration (SBA) website or through a third-party organization. However, the program is making some changes in the near future. Effective October 15, 2020, WOSBs will no longer be able to self-certify.

As part of the 2015 The National Defense Authorization Act (NDAA), Congress eliminated self-certification for WOSB set asides and sole source. Despite the change, the SBA insisted that WOSB self-certification remain a viable option while they figured out how to address the change. Now, that change is coming.

According to reports by the SBA Office of Inspector General (OIG), 89% of all WOSB sole source contracts were awarded improperly. It was determined that federal agencies, contracting officers, and firms did not comply with the federal regulations for 50 out of a total 56 sole source contracts, which are valued at a total of $52.2 million.

Before awarding a WOSB or EDWOSB contract, the contracting officer is required to confirm that WOSBs/EDWOSBs have provided supporting certification documentation in the SBA system. Yet, SBA OIG found that contracting officers awarded 18 contracts valued at $11.7 million on a sole source base to companies with no documentation in the system. Additionally, 32 sole source contracts were awarded to companies with incomplete documentation in the system.

SBA OIG pointed out that the 2015 NDAA, which allowed WOSBs to receive sole source contracts, also required the SBA to implement a certification program for these businesses. Though the SBA implemented the sole source authority in October 2015, they have not issued regulations pertaining to a certification process for the program. The SBA estimated another year of implementing a certification process. This is not the first time that an oversight body has questioned whether WOSB self-certification may be causing ineligible companies to win set asides and sole source contracts.

With self-certification going away, WOSBs must turn to third-party organizations for certification. There are currently four organizations approved by the SBA to provide third-party certification:

  • The National Women’s Business Owners Corporation (NWBOC);
  • The Women’s Business Enterprise National Council (WBENC);
  • The U.S. Women’s Chamber of Commerce;
  • And the El Paso Hispanic Chamber of Commerce (EPHCC).

Companies certifying for the first time must either certify through one of the third-party organizations mentioned above or through https://certify.sba.gov/, which will be offering a free online certification program. SBA will also allow participation from firms certified by the U.S. Department of Veterans Affairs Center of Verification and Evaluations, provided they meet all eligibility requirements.

JetCo Federal President to Speak about Contracting Compliance

JetCo Federal’s President, Sue Tellier, will be speaking about government contracting compliance at a Women Impacting Public Policy (WIPP) Education Platform webinar on Tuesday, June 30 at 2 PM ET.

The webinar, titled “Compliance Begins Before the Win”, will outline the structure of compliance JetCo Federal has built for federal contracting, which has allowed us to diversify with confidence in a manner that decreases risk. Effective compliance begins before the win, and small size status is not an obstacle to building a culture of compliance.

The webinar is free to WIPP members and is $25 for non-members. You can register for the webinar on the WIPP website.

 

Magnifying Glass

Complex Forecasts and Targeted Capture

Forecasts hold a vast amount of information on what federal agencies will be buying in the future, and there’s no denying the importance that forecast information plays in guiding the direction of government contractors. The United States Code Title 15, Section 637(A) (12) (C) requires that federal agencies prepare a forecast of expected contracting opportunities and make it available to small businesses. But with over 400 government agencies, how does our team get through all that data?

Our capture team uses forecast data to narrow the scope of our work and to target specific agencies. We review past contracts and determine agencies we have already built relationships with. Then, we determine the agencies who are purchasing the products that we are selling. With mutually beneficial agencies in mind, we focus on winning contracts with these agencies instead of data mining over 400 forecast reports. Forecasts are complex pieces of information that can require time and dedicated resources. However, they are integral to being a successful government contractor.

Targeted Capture

After narrowing down the specific agencies we want to work with, our team takes a strategic approach and strives to build meaningful relationships with each agency. Too often while wading through the depths of FAR clauses and the formalities that come with working in the government sector, it can be forgotten that procurement professionals and contracting officers have other important things going on outside of the proposal that is in the forefront of our minds. Our team recognizes this and takes a personal approach when communicating with government personnel. We build a relationship beyond the initial opportunity so that when the next one arises, we already know what the agency needs and can steer our company into a position that can provide accordingly.

The expression, “jack of all trades, master of none,” holds true in government contracting. Agencies are looking for partners that are masters in what they do, not a risky, albeit, low-priced jack of all trades. Using agency forecasts and targeted capture in our processes, JetCo Federal is equipped to be the expert partner that agencies are looking for. Government contracting is not for the faint of heart. It’s for driven companies with a strong past performance who manage complexity daily. We do just that.

Balancing Risk

In the freight markets, ‘expect the unexpected’ has always been sound advice, and especially so over the last few years. From driver shortages and skyrocketing rates to trucking companies constantly looking for freight, unpredictability has become the norm. As an experienced shipper, it’s my job to balance these risks while still delivering products on time, every time. To achieve that level of performance, we have three goals for every shipment: a trustworthy and transparent relationship with our clients and carrier partners; an intentional outlook to confront challenges with creativity; and the enforcement of strict standards for our carriers.

Trustworthy and Transparent Relationships.

JetCo Federal books trucks direct and uses experienced freight brokers when necessary. Because of market overcapacity, trucking companies are constantly looking for freight. This can make it a tough environment for brokers and carriers who are trying to maintain high levels of service at competitive rates. JetCo Federal does business with brokers and carriers that we trust, and have developed both transparent relationships and lines of communication with. This ensures better overall resiliency in our supply chain.

An Innovative Team.

Our team is mighty. Many companies see complexity as a risk, but we have a different approach. We embrace challenges and want to win every, single day. Whether it’s a demanding contract or thorny sourcing problem, our team delivers on time, every time. We apply this same mindset to our logistics operations.

Strict Standards for Carriers.

Fulfilling government orders requires strict government access standards within our transportation department. Agencies such as the Department of Defense have complex rules and regulations when it comes to receiving products from federal government contractors.

Our logistics team takes on these complex requirements, and we have strict standards for our carriers. Carriers play a critical role in these high-security deliveries, and in order to work with us, they must have:

  • U.S. citizenship;
  • No criminal history;
  • A clean driving record;
  • And strong attention to detail as paperwork can be complicated.

Meeting these goals for every shipment allows us to manage risk and create competitive advantages for our customers with on time deliveries, even in unpredictable environments. Our team is dedicated, mighty, and is ready to help your business succeed.

JetCo Federal Office

Our First Government Contract and Where We Are Now

JetCo Federal’s first government client was the Michigan Department of Corrections. They didn’t just need packaging and industrial supplies – they needed a contractor to deliver these supplies correctly. Delivering to a correctional facility is exceptional. The driver must be cleared by law enforcement and may not carry tobacco, a cell phone, or any type of weapon – this includes a multi-functional tool like a Leatherman. The delivery hours are very limited, and every delivery can be postponed or canceled if a lock-down or other security breach requires it. Delivery rules are strict as well. Every truck must leave empty for security purposes, and there are multiple steps in the delivery schedule.

This first client was not an accident. Neither was the second, a complex packaging solution for critical items for the Army. From day one, we didn’t want the easy projects.

In those early days, the company had two stubborn, hard-working, scrappy employees. (It was my husband Jon and I.) Today, we have 12. And I’ve been fortunate to hire in accordance with our values. Every employee we have wants a challenge and takes them on with diligence and scrappiness.

Our clients today are remarkably similar to the original ones in 2007. (Actually, some are the same clients. We earn repeat business. Bragging and proud.) The projects are bigger because we can handle much more scale and our supply chain is deeper and wider.

It’s interesting to me how much the government experience matters across the board. Most of our non-government clients chose us because of our government success. They assume that if the Department of Defense (DoD) trusts us, they can as well. This is a safe assumption, as the DoD expects extreme quality and delivery capabilities.

Recently, I had a proud moment. We were gathering some metrics for our new website, and I saw how many secure deliveries we’ve made in our 13 years of operations. (And we maintained a 98% on-time delivery rating.) We’re still a small business, with the mindset that we’d rather be great at our niche than ginormous. (Check out Small Giants by Bo Burlingham to dive into this topic.)

A small business with mighty capabilities. That’s how I want our customers to regard us. We didn’t want the easy projects then, and we don’t want the easy projects now. Complex is what we do best, and we’ll keep doing just that.

 

References

Burlingham, B. (2005). Small giants: Companies that choose to be great instead of big. Penguin Group. http://www.smallgiantsbook.com/

Increases in Simplified Acquisition Threshold and Micro-Purchase Threshold

Under the Federal Acquisition Regulation (FAR), the Simplified Acquisition Threshold (SAT) and Micro-Purchase Threshold (MPT) are increasing according to a recent proposed rule. In 2017 and 2018, the National Defense Authorization Act (NDAA) proposed that the SAT and MPT increase. Now, those proposed rules will be coming into play.

On October 2, 2019, the National Aeronautics and Space Administration (NASA), the General Services Administration (GSA), and the Department of Defense (DoD) proposed that the MPT and SAT increase. Section 806 increases the MPT to $10,000, which was originally at $3,500. Section 805 increases the SAT to $250,000, which was originally at $150,000.

What does this mean for federal contracting?

Increased thresholds mean more contracts under the SAT and MPT. This increase to the SAT and MPT, “reduces burden on contractors by increasing the thresholds at which various regulatory burdens apply,” according to the proposed rule. It also states that costs associated with contractor financing, “could also be reduced by increasing the number of micro-purchases, for which the Govermentwide purchase card is the preferred method of purchase and payment.” Overall, an increased threshold means that contracts are awarded without regulatory burdens, making the process streamlined.

Person sitting at a table writing on paper

The WOSB Program History and 2019 Changes

The Women-Owned Small Business (WOSB) program began in December of 2000. Public Law 106-554 established this program to help the federal government meet its goal of awarding at least 5% of all contracting dollars to women-owned small businesses. To qualify as a women-owned small business, you must be at least 51% directly owned and controlled by one or more women and be considered “small” as defined by the relevant North American Industry Classification System (NAICS) code.

Throughout the years, the WOSB program has gone through several changes, and most recently, there have been proposed changes that could significantly impact the program. Before we dig into those changes, lets take a look at where the WOSB program has been.

Timeline

  • 2011: In April of 2011, the new Federal Acquisitions Regulation (FAR) implemented the WOSB program and limited the number of eligible industries that can qualify for the women’s contracting program. As a result of this change, 38 industries were eligible for Economically Disadvantaged Women-Owned Small Businesses (EDWOSBs) and 45 industries for WOSBs.
  • 2014: In December of 2014, the National Defense Authorization Act of 2015 ended the self-certification program and provided sole source authority.
  • 2015: In October of 2015, the Federal Acquisitions Regulation (FAR) implemented the sole source process, meaning sole source authority is allowed in industries in which WOSB and EDWOSB set asides are offered.
  • 2016: In March of 2016, the eligible industries for WOSB and EDWOSB companies were revised and expanded. A Department of Commerce study was released and provided information which led to the revised and expanded industries. 27 industries changed designation between WOSB and EDWOSB, six industries were removed, and 36 industries were added.
  • 2017: In October of 2017, NAICS 2017, a NAICS code update, led to the WOSB and EDWOSB industries being revised to a total of 112. If you would like to see a list of the current NAICS that qualify for the WOSB program, they can be found on the Small Business Administration (SBA) website.

Proposed Changes for 2019

This leads us to the recent proposed WOSB program changes. In May of 2019, the SBA published a proposed rule outlining the following changes:

  • WOSB certification can be accepted from SBA-approved third parties and certain identified government entities.
  • There will be eligibility under the WOSB program as long as your application is pending.
  • A free electronic application process will be available for companies who want to be WOSB and EDWOSB-certified.
  • The SBA will adjust the economically disadvantaged threshold in the 8(a) Business Development program to make it consistent with EDWOSB thresholds.

Why all the changes?

Currently, SBA has some difficulty processing applications, such as WOSB, 8(a), and HUBZone, due to the sheer number of applicants. The proposed changes will ease administrative burden, increase speed and efficiency, and save money by using an electronic-based platform.

Altogether, the proposed WOSB program changes are targeted toward the goal of increasing the number of WOSBs that win Federal contracts.

JetCo Federal is a WBENC-certified woman-owned small business based in Grand Rapids, Michigan. We have a robust supply chain of high-quality manufacturers and strong past performance. Interested in becoming a supplier for us? Contact us.