Month: April 2020

Explaining The Rules For Subcontracting Small Business Contracts

Posted on by Linette Genao

Forget the rumors, myths, and misconceptions surrounding getting a contract and subcontracting the entire thing. The short and sweet answer to the ever so popular question, “Can I just sub out the entire contract?” is NO.

Knowing how to play the game and the rules of the game allows you to be successful. This is one of those rules you need to know and be aware of. However, you can get creative with how to abide by this, which is provided in the video below.

But how exactly do you avoid getting in trouble with subbing? Knowing FAR Clause 52.219-4 Limitations on Subcontracting.

subcontracting 50%First, let’s be clear that this rule only applies if you are the prime contractor. The rule is, as a prime contractor, if you provide a service, you must do 50% of the work. If you provide supplies, other than, “from non-manufacturer of supplies,” you also need to do 50% of the work.

For example, if the government puts out a quote for iPads, this doesn’t apply because you are a “non-manufacturer.” Since most of us aren’t the manufactures, this doesn’t apply. But if the government needed shirts and you’re making shirts for the government, then you’d need to make 50% of the shirts.

The 50% includes services like janitorial transportation, logistics, accounting, legal services and construction. However, construction has its own rules.

CONSTRUCTION 

Construction has two criterions. If it’s general construction, which falls under North American Industry Classification System (NAICS) 236, you have to self-perform 15% of the work. If it’s specialty construction, which falls under NAICS 238, then 25% of the work is what you have to perform. Specialty trades are air conditioning, electrical, plumbing, etc.

On the other hand, there is general construction or the overall contractor. When you’re given a big project by the government, which has a lot of components, it falls under NAICS 235. This means you only need to complete 15% of the work. In this case, you could sub out the majority of the work.

FIND OUT MORE

As long as you follow these rules and abide by the section that applies to you, you are in the clear.

For complete visual representations and examples on how these percentages can be legally broken down, refer to the video below.

To find out more about government contracting, visit the GOVCON GIANTS YouTube page.

Special Episode: Eric tells us the top 3 things we should be doing during the COVID pandemic

Posted on by Eric Coffie

In today’s episode, we are going to switch it up this particular week given the recent events that’s been happening lately impacting all of us globally, both the markets and also economically we are in a new era.  Something that we’ve never seen before, a global pandemic that’s impacting everyone across the world. It’s changing all of our lives, how we do business.

So today made sense for me to talk about what’s going on out there. I don’t want spend a lot of time focusing on the news side, but more on the aspects of what I’m seeing in terms of contracting and business world. So that’s what the conversation’s going to be like today.

Listen and take notes on the top three things:

  1. Learn the marketplace
  2. Work with other people.
  3. Finding a partner you want to work with

Survive this COVID-19 Pandemic as a Small Business Government Contractor

Posted on by Eric Coffie

With the COVID-19 pandemic, is there a way for small government contractors to survive its major threats? The answer is we can, only if both the contractors and the government can work together against its impact on the government marketplace.

CURRENT ISSUES THAT YOU MIGHT FACE

As of writing this, you and other businesses around the world might be facing these issues within your business:

1. Having a low workforce.

During these uncertain times, you will most likely need to lay off some of your employees, oblige your employees to work from home, or ask them to file a sick leave if they are feeling unwell. 

Regardless of what measures you will do, this will strongly affect the productivity of your workforce and you need to find ways to ensure that they are still motivated and their health is not at risk. 

2. Shortage of inventory and supplies.

With lockdowns being enforced by the local and national government as well as extensive measures towards incoming products from different countries or areas, you might have already faced a shortage with your inventory and supplies. 

In order to make sure that you still have the necessary supplies, you need to search for supplies in your local area as the delay might take a month or more depending on the location of your sources.

3. Loss of funds. 

There’s a possibility that you don’t have any back-up funds to continue your business or if you have any, it might not be enough to recuperate the loss.

Besides, aside from making sure that your business continues to work with the government, you also need to make sure that you have enough funds for your employees’ payroll and the cost of your production for the next few months. 

If you won’t be able to resolve these issues or if the covid-19 pandemic continues, you might not have enough funds to keep your business running and you might be prompted to close it for now.

WAYS TO SURVIVE THIS COVID-19 PANDEMIC

We know, you wouldn’t ever want your business to close down! So, here are two ways to help you:

1. Communicate with your employees.

Regardless of how many employees you have, you need to constantly communicate with them about this matter.

Provide them accurate information on the state of your small business because this will help them understand the issues that you are facing.

You also need to inform them of the things that they need to do to lessen the spreading of the virus in your business premises based on the guidelines provided by the Centers for Disease Control and Prevention. 

You might also need to mobilize your teams to work from home to keep your employees from the risk of getting infected.

Most importantly, you need to communicate and check up on each of your employees to see how they are doing given that there are changes in their work environment as well as in their mental state right now.

2. Communicate with the federal government.

If you are currently on a contract and there are some changes in the state of your business, you have the responsibility to communicate with the government agency that you are dealing with.

Don’t be afraid to tell them that you won’t be able to supply the needed materials or finish a specific project within the given period.

Consider that these offices chose your business with the idea that you are a credible and responsible government contractor. So, instead of being silent, you must be transparent. 

Besides, each government office needs to grant flexibility for contractors and to expedite the contract award process so that affected businesses can begin generating revenue through the COVID-19 RELIEF for Small Businesses Act of 2020. 

The bill includes extending the performance time of small business contractors by 30 days, adding more budget for sole-source award contracts, temporary removal of market research requirements, Office of Management and Budget’s annual category management goals exclusion, prompt payments within 15 days, and revision in the delivery schedule.

Apart from that, the federal government is also providing emergency loans for small business contractors. The Small Business Administration has available loans of up to $2 million per business to help with financial issues under their Economic Injury Disaster Loans.

To avail the said loan, you can choose to apply online through their website or print and fill out the PDF documents in their site and mail it to their processing and disbursement center or apply in-person.