About the Book

chapter one Chapter One: Is Your Small Business Really Small?

The government does not have a one-size-fits-all definition of a small business. Sometimes, a business with $35 million in annual revenues is “small” for federal contracting purposes; in other cases, a company with less than $1 million in revenues is considered large. Chapter One explains how to determine whether your business is small enough for federal small business contracts, answering questions such as:

• What are size standards for federal contracts?
• What are the differences between revenue-based and employee-based size standards?
• How do you calculate your business’s “average annual receipts” when size status is based on revenues? What if your business has not existed for a year, and does not have any “annual” receipts?
• How do you calculate your number of employees for employee-based size standards? Do temporary or part-time employees count?

chapter two Chapter Two: The Affiliation Problem

Does your small business share owners, managers, employees, or office space with another company? Or earn a large percent of its revenues from subcontracts with a single firm? If so (or if any one of a number of other relationships exist between your small business and another company), you may have an affiliation problem. In other words, even if your small business earns $500,000 annually, if it is affiliated with Wal-Mart, the government will treat it like a $400 billion business for federal contracting purposes.

Chapter Two describes the many different relationships that may lead to affiliation, provides a 29-question “Affiliation Risk Questionnaire” to help evaluate your small business’s risk, explains the limited exceptions to affiliation, and offers commonsense strategies for solving the affiliation problem.

chapter three Chapter Three: Affiliation Redux: Subcontractor or Ostensible Subcontractor?

Even if your company has never done a dime’s worth of business with a subcontractor, the government might deem your companies affiliated for purposes of a single government contract if your subcontractor will play too great a role in the project.

Chapter Three explains when a legitimate subcontracting relationship crosses the line into SBA ostensible subcontractor affiliation—a type of affiliation problem wholly distinct from the “general” affiliation covered in Chapter Two. Chapter Three includes an “Ostensible Subcontractor Affiliation Risk Questionnaire” to help business owners evaluate their ostensible subcontractor risks, and provides advice on drafting teaming agreements, subcontracts, and proposals to reduce or eliminate affiliation problems.

chapter four Chapter Four: The Wide World of Subcontracting

In order to win and perform government contracts, small businesses often rely on subcontractors to perform significant portions of the prime contract work. Chapter Four answers critical compliance questions about subcontracting, including:

• What are the FAR limitations on subcontracting, and how do I ensure that I comply with them?
• What provisions must be included (or “flowed-down”) to my subcontractors?
• What other clauses should I insert in my subcontracts?
• Do I need to report my subcontract awards to the government? And if so, how do I report them?

chapter five Chapter Five: Uncle Sam, HR Director: Hiring Restrictions and Requirements

When your small business becomes a government contractor, Uncle Sam plays a big role in your employee hiring process. Chapter Five explains:

• Which individuals are you prohibited or discouraged from hiring?
• Are you required to use the E-Verify system to document employees’ immigration status, and if so, how do you use it?
• Can you hire current or former government employees? What restrictions apply?
• When are you required to make employment offers to another contractor’s personnel? What exceptions apply to the “right of first refusal?”

chapter six Chapter Six: Non-Discrimination and Affirmative Action

For government contractors, treating employees and applicants fairly is not enough to meet the government's non-discrimination requirements. Chapter Six addresses the specific non-discrimination steps your small business must take, such as including specific wording in advertisements. The chapter also explains whether your small business must adopt affirmative action programs for women, minorities, and veterans, and if so, how to establish compliant affirmative action programs.

chapter seven Chapter Seven: Uncle Sam, Union Boss: Employee Wages, Benefits, and Hours

When you perform a government contract, Uncle Sam wants to know that you are treating your employees right. The government may require you to pay certain minimum wages, provide fringe benefits, and allow vacation and holiday leave. Chapter Seven covers:

• Which of your employees are entitled to "prevailing" wages and benefits (often, much higher than the minimum wage) under the Service Contract Act or Davis-Bacon Act?
• How do you calculate the prevailing wages and benefits your employees are owed?
• How much vacation time must you provide your employees?
• Must you pay you employees extra for overtime work?
• What wages and benefits must you pay your part-time employees?

chapter eight Chapter Eight: Prohibited Activities, Ethical Violations, Conflicts of Interest and Disclosure Rule

The government prohibits its contractors from engaging in a number of activities—some of which are perfectly acceptable in the commercial world. Chapter Eight covers false claims, contingent fees, kickbacks, gifts, conflicts of interest and other "no nos." This chapter also explains whether your small business must adopt a government contracts code of ethics and ethics training program for your employees, and if so, what those documents should include.

chapter nine Chapter Nine: USA! USA! Domestic Preferences and Overseas Contracts

It should come as no surprise that the government prefers to buy goods "made in the USA," and requires its contractors to certify whether their products are American-made. Chapter Nine discusses how to figure out where your goods come from (it's not as easy as it sounds). In addition, Chapter Nine discusses an important rule, the Foreign Corrupt Practices Act, that can land you in very hot water if you violate it while performing a contract overseas.

chapter ten Chapter Ten: Under the Hood: The Nuts and Bolts of a Government Contractor

Chapter Ten discusses certain "fundamental" business restrictions contractors should know about, such as:

• What databases and registration numbers must you obtain before contracting with the government?
• Can you sell your business to another company while you are performing a government contract? Sell your contract to another company? Change your business's name? If so, how do you do it?
• What records must you keep, and how long must you retain them?

chapter eleven Chapter Eleven: The 8(a) Program

The SBA's 8(a) Business Development Program offers tremendous benefits to participants, but also subjects them to strict and complex compliance regulations. Chapter Eleven covers:

• Is your small business eligible for the 8(a) program?
• What must you do to remain eligible after you have been admitted?
• When are subcontracting, teaming, and joint venturing permitted on 8(a) set-aside contracts?
• How does the 8(a) mentor-protégé program work?
• What restrictions apply to selling an 8(a) contract or business?

chapter twelve Chapter Twelve: The Service-Disabled Veteran-Owned Small Business Programs

Annually, the federal government attempts to award at least 3% of its prime contracting dollars to companies owned and controlled by service-disabled veterans. Chapter Twelve discusses:

• Does your company need to be formally certified as a service-disabled veteran-owned small business?
• Who is considered a service-disabled veteran?
• When is a company considered to be unconditionally and directly owned and controlled by a service-disabled veteran?
• Are subcontracting and joint venturing permitted on service-disabled veteran-owned small business set-aside contracts, and if so, what must you do to establish compliant teams?
• What are the unique compliance requirements of the Department of Veterans' Affairs Vets First contracting program?

chapter thirteen Chapter Thirteen: The HUBZone Program

The HUBZone program provides special government contracting preferences to small companies located in economically disadvantaged areas of the country. Chapter 13 explains the HUBZone program's initial eligibility requirements and requirements for continuing eligibility. In addition, the chapter discusses the unique subcontracting and joint venturing limitations applicable to HUBZone contracts.

chapter fourteen Chapter Fourteen: The Women-Owned Small Business Program

In 2010, the government adopted a new program designed to "give 'em five," that is, to ensure that at least five percent of federal prime contract dollars go to small businesses owned and controlled by women. Chapter 14 addresses:

• Is your small business eligible for the women-owned small business program?
• What are the women-owned small business certification requirements?
• What is an economically disadvantaged women-owned small business, and does your company qualify?
• What restrictions and requirements apply to subcontracts and joint ventures for women-owned small business contracts?

chapter fifteen Chapter Fifteen: Special Rules for Tribes, ANCs and NHOs

In the world of government contracts, small businesses owned by Indian tribes and Alaska natives enjoy a number of special rules and preferences. Chapter Fifteen discusses those rules and preferences, including:

• Exemptions from affiliation for tribally-owned businesses (and the limits of those exemptions)
• Unique rules for participation in the 8(a) and HUBZone programs
• Special subcontracting preferences