In the last two years, Cherie Kunze met with over 200 firms, conducted numerous outreach events and used each of her 30 years of contracting experience. In 2019, it paid off.
The Norfolk District Office of Small Business Programs deputy took the commander’s program to record highs by far exceeding the district’s small business goals.
Small business, for U.S. Army Corps of Engineers purposes, is a term for companies operated by various socioeconomic groups. Programs for those groups include small, small-disadvantaged, women-owned, HUBZone, service-disabled veteran-owned and veteran-owned businesses.
A mandatory Corps operation, the small business program aims to provide these firms maximum practical opportunity to participate in Norfolk District acquisitions through contracts or subcontracts. By facilitating a roadmap, USACE ensures a broad base of capable small business firms supporting the mission and strengthening economic development.
"Our district Office of Small Business Programs is essential in continually sustaining both the U.S. Army Corps of Engineers and the Norfolk District as premier organizations," said Maj. Alexander Samms, deputy district commander. "We take seriously our role in strengthening the fiscal advancement of our community, commonwealth and country."
The program hosted three outreach events throughout fiscal year 2019.
In October, the district attended the Western Dredging Association conference in Delaware and the Southeast Region Federal Construction, Infrastructure & Environmental Summit in North Carolina. In November, district officials attended the Federal Small Business Conference in Texas.
The subsequent results showed gains across the board: Small business exceeded its goal by nearly 10%; small-disadvantaged business 13%; service-disabled veteran-owned business was more than 2% greater; and women-owned small business and HUBZone more than tripled their goals.
While impressive, Kunze emphasized the importance of each goal in respect to the Norfolk District mission.
“We won’t just award to a firm to meet a goal,” she said. “They have to be capable, financially sound, have a good performance record and all the things that make up a good contractor. This not only helps companies, but it also must assist us in continually providing our partners with the best service available.”
How are the numbers calculated?
After a contract is awarded, the district’s contracting office releases a report that includes the company’s profile. That profile indicates whether the firm is registered as a vendor in the System for Award Management database and its affiliated programs. The district is credited with a dollar amount for each program the business registered in SAM.
In fiscal 2019, Norfolk District awarded a total of 234 contracts valued at $213 million.
“Of the goals we’re given, we award dollars for each category and the percentage is based on the whole award,” Kunze said. “So, of the $213 million a certain percentage went to businesses in each of our socioeconomic groups. The bigger the award is, the larger the percentage goal in each of the small-business categories.”
A contractor can be registered in a combination of U.S. Small Business Administration programs. For example, a women-owned small business may also be a small-disadvantaged business – leading to the district being credited for multiple programs per award.
“The purpose of having the goals is to remain mindful, but our acquisition strategy is based on what we consider the best for the project for that stakeholder,” Kunze added.
Leveling the playing field
In short, the small business program helps ensure big companies aren’t the only agencies to work with the district. There are a couple options.
According to SBA, the federal government prefers to contract with small business whenever possible. To help agencies meet their small business contracting goals, one option is a set-aside procurement. This reserves an acquisition exclusively for participation by small businesses.
A possibility for construction-type awards up to $4 million is a Sole Source (8a) Award. This permits open negotiation with a specific firm, allowing for seamless program integration.
A disadvantage is it’s typically more costly due to lack of competition and the inherent increased price tag of working with small business, but it still may prove beneficial to a project partner.
“If SBA gives us permission, we negotiate directly with one firm,” Kunze said. “This saves a lot of time. And if we have a project where the plans and [specifications] aren’t fully completed and we’d like the firm to help figure them out and give recommendations on the best course of action – then that’s typically a good decision.”
But large projects often require a large company. In cases like that, small-business interests still apply.
“When we award to a large business, they have to give us a plan that shows how they are going to use small business in that project,” she said. “The work has to trickle down.”
When a large business is notified of a possible award, it’s required to supply the district with a subcontracting plan – one that maps out the use of small businesses.
“We look at our different categories and see how they are going to utilize them in their project,” Kunze said.
Every award has a small-business dollar threshold that must be met.
So, what if the primary contractor comes up short? Kunze, as well as USACE, roots for the little guy.
“We’re extremely adamant about holding our large businesses accountable for their small business subcontracting,” she added.
According to the district, firms must prove a good-faith effort in their subcontracting plan. Failure to fill small-business requirements is reviewed by the contracting officer. Once that plan is approved, it becomes part of the contract.
Looking to the future
Norfolk faces a different work landscape in fiscal 2020.
“We were very successful this year, but next year we’re predicting a different outcome due to the majority of work being better served by a large business,” Kunze said. “So, we might not meet our small-business goals, but the trade-off is not awarding.”
The current workload forecast is $600 million, with a significant portion allotted to large projects. Because of this, district Small Business Programs officials remain hopeful but realistic.
“If we can meet the goals, that’s great,” Kunze said. “And yes, the goals are important, but we’re more interested in finding the right contractor for the right project.”
How to work with us
The Norfolk District Small Business Programs Office recommends that those interested in working with the district stay active and vigilant.
Businesses can reach out to the contracting office by going to www.nao.usace.army.mil/Business-With-Us/Contracting. For tips in doing business with the Corps, visit www.nao.usace.army.mil/Business-With-Us/Small-Business.