**GSA's Strategic Plan for Contracting\
Service-Disabled Veteran-Owned Small Businesses (SDVOSBs)**

In December 2003, the President of the United States and Congress
enacted Public Law 108-183. This law established a preference for the
U.S. federal government to contract with Service-Disabled Veteran-Owned
Small Businesses (SDVOSBs). This law was enacted as a follow on to P.L.
106-50, which designated that three percent of the total value of all
prime contract and subcontract awards by the federal government be
awarded to SDVOSBs.

As the fifth largest procurement organization of the U.S. federal
government, GSA is prepared to assist SDVOSBs to sell their products and
services to the federal government, as well as assist federal agencies
in identifying and utilizing service-disabled veteran-owned small
businesses under GSA contract.

**[Plan Overview]{.underline}**

The SDVOSB set-aside category was created to help a subset of
veteran-owned businesses become more competitive in the federal market.
Although many federal agencies initiated aggressive outreach programs to
improve SDVOSB prime and subcontracting opportunities, the Government
has struggled to meet the three percent mandate associated with this
side-aside category.

In the past, GSA has fallen short of meeting the goals for contracting
with SDVOSBs. To some extent, this was due to the lack of identified
SDVOSB vendors. The Department of Veteran Affairs (VA) estimates that
the service-disabled veteran population will stay between 2.1 and 2.5
million veterans through 2030. (Source: VetPop 2001, Adj., Office of
Actuary, VA, December 2002). Additionally, the Census Bureau reports
more than 4.2 million veteran-owned businesses with 320,000 of them
designated as a SDVOSB. Only a fraction of those businesses are on the
Central Contracting Registry and on vet.biz.gov as federal government
contractors, with an even smaller fraction of those listed on GSA
schedules.

Government historically meets or exceeds socioeconomic goals, and GSA
has a tremendous opportunity to accomplish the objectives that the
President and Congress have put forward to assist SDVOSBs, and to aid
GSA's customers in achieving their three percent goal.

GSA brokers or spends almost \$45 billion each year for commodities,
equipment and services to carry out its mission as the preeminent
Federal landlord and purveyor of procurement services. GSA procured more
than \$10 billion in goods and services for federal agencies though the
third quarter of fiscal year 2004. Of that amount, approximately 42
percent, or \$4.2 billion, went to small businesses. The current numbers
provided by the Small Business Administration estimate that GSA target
for the SDVOSB goal ranges from \$4 billion to \$13 billion depending on
whether schedules are included or not.

To further certain socioeconomic objectives of the Nation, GSA has
targeted a significant percentage of its budget for small businesses
entitled to preferential treatment. As a result, GSA procurement dollars
have gone to small and disadvantaged businesses, woman-owned small
businesses, minority-owned small businesses and small businesses located
in economically depressed areas. In addition, GSA has been a leader in
providing contracting opportunities for persons with disabilities by
championing procurements with Javits-Wanger-O'Day agencies.

Given GSA's mission, this agency is making every effort to lead the
federal community in providing business opportunities to small
businesses owned by Veterans. Executive Order 13360 provides the
framework and emphasis to jumpstart GSA's internal initiatives as well
as a unique opportunity for GSA to become a preferred provider in its
three major business lines: The Federal Supply Service, the Federal
Technology Service and the Public Buildings Service.

**[Operation Breakout (GSA's Five-Point Plan)]{.underline}**

Bradley Scott, the Heartland Regional Administrator, has been charged
with developing and coordinating specific strategies to achieve GSA's
goals for doing business with SDVOSBs. His team reviewed several
proposed initiatives to increase GSA procurements from veteran-owned and
SDVOSBs. The team has met, and will continue to meet, with
representatives from a number of these small businesses to hear their
view points, experiences and advice.

Currently, the analysis concludes that achieving GSA's procurement goals
for SDVOSBs requires more than a concerted effort to educate contracting
officers and program officials about the goal; GSA must also identify
and educate those SDVOSB vendors that can provide the goods and services
GSA needs. To ensure long-term viability of this program, fundamental
changes in procurement law and preferential program policies will
continue to be refined. This effort is called Operation Breakout, and
includes a five point strategic planning foundation.

**[Point 1: Integrate GSA's Service-Disabled Veteran-Owned Small
Business Goals into GSA's Acquisition Planning Process]{.underline}**

GSA will use its market leverage through acquisition planning at both
the national and regional levels. GSA will integrate into this planning
process its goals for contracting with and subcontracting to small
businesses owned by veterans. GSA regional, facility-level contracting
is the major source of opportunities for veterans.

GSA will also need to promote the practice of educating employees,
especially purchase cardholders, about the importance of doing business
with SDVOSBs. Currently, there is no centralized effort or tracking of
this data. GSA will institute procedures to capture and report purchases
made by purchase cards from SDVOSBs and other socioeconomic categories.
(The Department of Defense Acquisition Regulation (DAR) has forms and
procedures that could be easily modified for GSA use in collecting this
information.) Currently, it is not possible to obtain this information.
Such data are essential to measure accurately the amount of GSA business
going to VO and SDVO small businesses. The team suspects that GSA is
doing a better job of meeting all its goals than is being reported, and
capturing this information will help GSA better track all socioeconomic
goals.

**[Point 2: Develop Specific Acquisition Strategies for Increasing
Contract Awards to Service-Disabled Veteran-Owned Small Businesses and
Expand the Opportunities within the GSA Schedules Program]{.underline}**

In the last 10 months, GSA has quadrupled the number of SDVOSBs on the
FSS Schedules, rising from 98 to more than 425 small businesses. Yet,
even as these numbers grow, having SDVOSBs on Schedule is not enough.

GSA now needs to identify and catalogue these small businesses for
internal use and as a valued added service to our customers. Maintaining
a database with accurate information on SDVOSBs will require a major
effort nationally, regionally and locally. Present databases contain a
relatively small number of SDVOSBs, and the topics are skewed towards
information technology (IT). Also, the databases are not geographically
dispersed. To be a truly valuable resource, the database will need to be
expanded to include as many SDVOSB firms as possible; and it must be
updated on a regular basis.

A GSA plan to bring together potential SDVOSB business partners with GSA
contracting officers, program officials and large business prime
contractors is in progress. Since facility-level contracting will be the
major ingredient in achieving the three percent goal and program
objectives, GSA will need a centralized strategy with decentralized
execution for successful development of acquisition strategies to
increase awards to SDVOSBs.

The focus will be on several key areas:

-   Creating user-friendly web pages\
    \
    GSA has created this site to specifically focus upon maintaining
    information for other federal agencies, information for SDVOSBs and
    links with partner agencies like the DVA, SBA, Veterans Service
    Organizations (VSO)and others.

-   Capturing purchases made by purchase card

Many local acquisitions, particularly those costing less than \$2,500,
are paid by purchase card. These purchases can be made directly from
SDVOSB firms without competition.

-   Integrating SDVOSB and socioeconomic goals into operational and
    capital planning.

GSA will use its market leverage through acquisition planning at both
the national and regional levels. This agency will integrate into this
planning process its goals for contracting and subcontracting to small
businesses owned by service-disabled veterans. GSA's regional,
facility-level contracting is the GSA major source of opportunities for
veterans.

-   Improving market research

> Market research is essential to ensure the Government gets best value
> for the products and services it buys. Since most of the products and
> services GSA buys are found commercially, market research must be done
> before initiating a procurement action. Acquisition reform has opened
> the door to new approaches to market research.

Traditionally, the contracting officer and the contracting officer's
technical representative have performed the market research.
Establishing a ready made, qualified pool of SDVOSBs helps accelerate a
capability determination. GSA should also consider forming a cross
service team to do the market research and share the results agency
wide. This approach involves more people, considers the unique nature of
each services mission, provides better insight into industry practices
and commercial offerings, and enhances all of GSA's understanding of the
information collected.

Federal Supply Service (FSS) schedules produced \$32.5billion in sales
in FY2004. This represents a major source of operating funds for the
agency, but perhaps more importantly quantifies the tremendous
opportunity for GSA and our customers. This ultimately represents the
most significant opportunity for SDVOSBs to minimize the entry cost into
the government marketplace, expand their business opportunities and
avoid the time delays associated with government procurement. FSS
acquisition centers must prioritize getting SDVOSBs on schedule.

It is further suggested to consider using the Navy's Seaport e program
as a model for future years. In this program the Navy has a policy of
Rolling Admissions to include new companies in the suite of their
multiple awardees. This ensures that SDVOSBs, which are on the brink of
the VETS GWAC award, are not totally left behind by allowing a limited
number to be added in future years. Of course, GSA has to be prudent by
not letting the number of contract awardees to become too cumbersome to
manage. In the selection process we should strongly encourage teaming,
subcontracting and mentoring.

**[Point 3: Develop a Communications Plan to Inform and Foster
Relationships with Key Stakeholders of GSA's Committed Plan for
Increasing Contract Awards to Service-Disabled Veteran-Owned Small
Businesses]{.underline}**

Increasing contract awards to SDVOSBs requires awareness and commitment
at every level within GSA. As GSA defines procurement requirements,
leaders and managers must understand GSA's contracting goals and work
aggressively to achieve them. Senior officials need to report, on a
quarterly basis to the Administrator on progress in meeting these goals
within their respective organizations.

Monitoring organizational performance in this highly visible forum will
highlight GSA leadership's commitment to meet these goals.
Simultaneously, GSA must communicate its commitment in this area to
veterans who are small business owners and show them how to identify GSA
procurement requirements they can meet. An effective communications plan
is essential to ensure that everyone involved in the procurement process
understands GSA's objectives in this area and how to help achieve them.

**[Point 4: Develop Appropriate Personnel Performance Standards and
Award Systems to Encourage Achievement of GSA's Service-Disabled
Veteran-Owned Small Businesses]{.underline}**

The executive order names three positions within GSA that must
incorporate these performance standards into their performance plan.
They are the designated senior official, the Chief Acquisition Officer
and the Director Office of Small Business Utilization.

As a recognized leader in federal procurement, GSA needs to do more in
holding its associates accountable at every level. The plan is to
recommend that all regional administrators, their deputies and assistant
regional administrators have this as part of their performance plan as
well.

GSA must hold our managers accountable for reaching these goals within
their contracting activity or program. At present, this is not done. As
a result, there exists some confusion about whose responsibility it is
to reach these goals. GSA should also consider taking this to selected
associates and amend their performance plans accordingly.

Since GSA contracting activities are decentralized, it is easy for
individual contracting units to believe that other units will do what is
necessary to achieve GSA's overall contracting goals. GSA needs to
correct this perception and hold individual units responsible for their
performance in achieving these goals. Statistics are maintained for an
individual unit's performance in this area, and GSA should use the data
in conducting APPAS reviews. At present, failure to meet the goals does
not result in punitive action, and success is not always rewarded. GSA
needs to recognize outstanding efforts by our employees and prime
contractors whose efforts exceed the spirit and intent of the
requirements set forth in both public laws and the executive order.

**[Point 5: Develop Mechanisms to Provide Preferential Procurement
Status for Service-Disabled Veteran-Owned Small
Businesses]{.underline}**

GSA and other Government agencies have a history of meeting
socioeconomic procurement goals established by Congress and the
President. However, even when targeted small businesses can be
identified, it is often difficult to reach goals for doing business with
them without a preferential procurement mechanism such as authority to
set aside certain procurements for the targeted category. Given this
reality, the GSA must explore options that could provide preferential
treatment for SDVOSBs. Perhaps Secretary Anthony J. Principii,
Department of Veterans Affairs, best summarized this precept for all
governmental agencies when he said, "We possess both a unique
opportunity and a unique responsibility to serve America and its
veterans by expanding business opportunities for veterans who own small
businesses."

Based on this underlying principle, it is altogether proper and
consistent with GSA's mission to seek specific procurement set-aside
authority for SDVOSBs. GSA will attempt a two prong approach.

First, simplify the application process for 8(a) preferential
procurement. In discussions with SDVOSBs, they almost universally
recounted the difficulties in applying for 8(a) preferential procurement
status from the Small Business Administration. Persistence and
perseverance ultimately pay off, but a simpler process would allow them
faster contracting opportunities, since much of what a contracting
officer can or cannot do is tied to SBA policy and reporting procedures.

Second, in order to expand business opportunities for these firms, GSA
should seek authority to give all SDVOSBs the same preference now given
to small businesses located in a designated geographic area. This
recommendation would apply only to GSA procurements. If granted this
legislative authority, GSA contracting officers could set aside certain
procurements for service-disabled veteran-owned small businesses.

**[Subcontracting Focus]{.underline}**

Subcontracting is specifically mentioned in the Executive Order as part
of achieving the three percent goal, and it is a major component of
GSA's strategic planning.

Subcontracting monitoring is underperforming across the federal
government. GSA, working in concert with the Small Business
Administration (SBA), will need to leverage its role as a major
acquisition player in order to improve subcontracting performance of
large businesses. The Federal Acquisition Regulations (FAR) Part 19
requires large companies (or prime vendors) to prepare, monitor and
report on the award of dollars to companies in selected socioeconomic
categories. Additionally, the FAR requires prime contractors to flow
down the "best effort" clause (FAR 52.219.8) for subcontracts over the
simplified acquisition threshold (currently \$100,000).

The plan recommends that GSA monitor and enforce the requirement that
prime contractors (except small business) that receive subcontracts in
excess of \$100,000 (the simplified acquisition threshold), adopt a
subcontracting plan that complies with the requirements of FAR flow down
requirements. The plan recognizes that there will be instances when
visibility to the task order may not be practicable or beyond GSA
control. However, the intent is to establish aggressive "floors" and
broaden this requirement for our primes. The goal is to cast a wider net
in hope of getting more tier one and tier two dollars to SDVOSBs.
Concurrently, all other socioeconomic categories will benefit through
this aggressive approach.

Currently, prime vendors use SF 294 and 295 to report their performance
to agencies and the SBA. These reports are routinely viewed by a host of
agencies and special interest groups. GSA should develop a barometer for
each of its prime vendors. This easy to understand visual could then be
posted on the web for all customers and constituents to see. One of the
intended outcomes is to provide a snapshot that quickly shows what
businesses are engaged in a good faith effort to meet their
subcontracting goals. Perhaps another consequential outcome will be to
foster competitiveness amongst prime vendors looking to maintain or
enhance their public image.

SDVOSBs, like other socioeconomic groups, are looking toward
subcontracting as a mechanism to establish performance under government
contracts. Past performance is a significant hurdle for new small
businesses to overcome in the federal procurement process. Contacting
officers look at past performance as a major indicator what business can
do the job and has the stability to complete the desired work. One of
the best ways to gain the base of performance is to work as a
subcontractor under a large federal prime.

**[GSA's Initiative Partners]{.underline}**

GSA is partnering with the U.S. Department of Defense, the Defense
Logistics Agency, the Small Business Administration and the Department
of Veterans Affairs.