A few weeks ago, we put out a Master Moment on the sole source process, the role of the SBA, and all things related to the SBA Search Letter process. What we received back was a slew of questions from 8A business owners on the why, how, and when of the process.  So, to add additional clarity and address the questions of the 8A business community, we compiled these comments and questions into an organized Industry Comments and Frequently Asked Questions group so that we may offer additional insight and experiences into the process.

Q1. My small business representative is useless and doesn’t seem to do much for me.

A1. A big part of the challenge in growing an 8A business is interacting with the Small Business Administration (SBA). 

As a general statement, the SBA has a very difficult mission to maintain and strengthen the nation’s economy by enabling the establishment and viability of small businesses and by assisting in the economic recovery of communities after disasters.  It is a broad mission for a very understaffed organization. Each SBA office, of which there are 110 Districts, has between 1 and 3 Business Development Specialist (BDS), so there are roughly 300 of these people nationwide. Based on RWCO’s direct research of the industry, there are more than 45,000 small businesses, all eligible for services offered by the SBA. So, at its core, the SBA has a mission to help small business using a workforce of about 300 to support more than 45,000 SBA constituents. That is roughly 150 constituent firms for each one (1) SBA BDS. Not great odds.

So, like most things, the squeaky wheel gets the grease.The SBA, just by sheer volume, cannot proactively help each small business equally. It is impossible. A big part of the process of garnering sole source contracts is having a consistent line of communication with the BDS over an extended period of time. Otherwise, the 8A firm would be drowned out by the hundreds of other voices asking for help, and SBA BDS cannot assist 150 firms simultaneously. 

Obviously, this is not the best news for an 8A. The ideal answer would have been that each BDS has a manageable case load and they are waiting by the phone for your call, ready to swoop in and help. The reality, much like other area of the public sector and the State and Local level, the mission greatly exceeds the resources. The takeaway: communicate early and often so that you interaction with the SBA is consistent and thus the BDS has a personal stake in the SBA’s relationship with the 8A firm. At that point, the SBA becomes very responsive.

Q2. Sole Source opportunities are rigged for people who already have a relationship.

A2. In our experience SBA does not choose favorites, but the BDS do choose how to allocate their time most effectively.  That generates the same sense of favoritism, but given the 150 to 1 ratio of small business constituent to BDS resources, it is unfair to assume otherwise.

Thus, the theme of the answer for this question is the same as that provided for the previous question.  The SBS is comprised of human beings that have a mission to help all small business but the resources to only impact a fraction, unless those small businesses take a proactive stance in communicating with the SBA. This takes work, it takes time, and it takes patience. It also requires that a given small business understand the playing field, the rules of engagement, and the universe of viable outcomes from the interaction.  Just like most things, relationships matter. This is not different. So, while our findings and experience do not suggest the process is “rigged” in favor of some to the detriment of many, it does suggest that – again – the squeaky wheel gets the grease.

Q3. Sole Source is just for new opportunities coming out so how I will know who or when to send the letter; Does the Government only allocate sole source for new opportunities; and How can I go after sole source opportunities if I don’t already have a relationship with the agency putting out the RFP?

A3. A point of clarification here, Sole Source opportunities are routinely earmarked for existing work that is already under a to-be-expired contract. That is, unless the agency soliciting the project reaches out via the SBA and communicates to targeted industry its interest in a sole source option. So, the first step is to know what is out there that would be a viable sole source program and second is then communicating your firm’s capability to perform the effort within the scope limitations of the sole source rule.  

So, what are the exact steps in requesting that my company is sole sourced an opportunity? Glad you asked.

In order to know what is out there for potential sole source, an 8A firm must take a consistent look at contracts set-to-expire in the near future (within the next six months) and map those contracts to both the capabilities of the 8A firm and the ensure that the dollar value of the existing/future contract is below the threshold of sole source awards. Use of FBO.gov advanced search functions that filter results by (i) award dollars size, (ii) NAICS (of the relevant NAICS for the 8A firm), and (iii) set-aside type (small business, 8A, etc.) will illuminate opportunities that fall within the context of being via sole source awards.  

There are several rules associated with sole sources that defined the parameters of the dollar value and term of the project. However, to keep things simple, note the anticipated award price of the contract, including options, is $7,000,000 for contractsassigned manufacturing NAICS codes and $4,000,000 for all other contracts. These values are subject to change for inflationary reason, so please refer to 41 U.S.C. 431a(c). Part 124, Subpart A.

The second step, knowing who and/or when to send the letter, is relatively straight forward. In general, every small business interacting with the Federal Government should proactively reach out to the SBA and establish a relationship with the business development resources at that local office. As such, a Business Development Specialist (BDS) will be assigned to your organization. That person serves as the primary point of contact for all things SBA and thus would be the appropriate individual to communicate with regarding sole source efforts. 

A best practice for submitting a request letter is the timing of it all.  The timing of these letters depends on when the targeted opportunity of interest expires. A FBO advance search will provide the anticipate end date(s) of relevant contracts.As a rule of thumb, the sole source process for targeted opportunities – i.e. those that you identify as within the size, scope, and dollar value parameters for sole sourcing – should commence at least 180 days prior to the end date of the targeted opportunity. There is a multitude of reasons for this, with the most critical reason being that you will want to get in front of the procurement process for this opportunity so as to present a viable, simplified option for the Government to sole source an award vs. going through a resource heavy, time-consuming competitive procurement.

An additional point of guidance: some firms have had great success using an outreach approach that utilizes the end dates of the Government’s fiscal year (FY), which is September 30. That thought behind this approach is the budget money for the prior is lose or use, so many agency identify supplemental projects of importance that would benefit from remaining budgets in advance of the FY end.

Q4. I don’t understand the role of my small business rep. How can I get them more engaged in my business?

A4. The intended of the SBA BDS (i.e. small business rep) is three-fold: 

  • as an advisor to the small business stakeholder as they navigate the challenges to growth over the course of either their 8A-lifespan of 9 years or as the small business plots a course for its revenue growth over time.
  • as an advocate for small business constituents in the deployment of resources and in the communication of capabilities from the small business to Government agencies across the country.
  • as a resource for small business stakeholders so that issues, challenges, and pitfalls are identified and mitigated as the small business competes within its defined marketplace.

As such, small businesses need to proactively communicate with their SBA representative.  Let’s face it, with an scope of responsibility that may include up to 150 business in their geographic area of influence, the SBA BDS is not going to have the situational awareness, let alone time, to take the lead of nurturing the relationship of the SBA with the small business. The onus of building a business that utilizes the tools and resources provided to them via the SBA falls squarely on the shoulders of the small business. While it is fully reasonable to assume the responsibility to fall on the SBA it is unrealistic to expect SBA to actually do so in the long-term. 

Q5. Thanks for sending the sole source checklist- is this my cover letter? What exactly do I do and send?

A5. As an 8A firm, you are not the source writing the Search Letter. The Search Letter is generated by your BDS at your local SBA. 

The information required by the SBA is provided in the RWCO Sole Source Checklist. If the 8A Firm completes the checklist and sends it to their designated BDS, you’ve now clearly defined the opportunity, the rationale, and armed the SBA with a simple reference sheet that allows for the optimization of time to generate and submit the Letter to the appropriate agency. The Sole Source Checklist expedites this process. Remember, each BDS has about 150 businesses within its area of responsibility. Therefore, if the squeaky wheel gets the grease, then the squeaky wheel with the checklist gets the grease first.  The Checklist is a tool that saves you time, simplifies the job of the BDS, and gets your Search Letters out faster and with less pain.

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