# Presentation: 148369

## VA’s “Striving for Health Care 
Contracting Excellence”
October 9-10, 2007

Small Business & Special Emphasis Programs

_**Contracting Excellence”**_
_**October 9-10, 2007**_
_**Small Business & Special Emphasis Programs**_

## VA’s Mission

- With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the Nation’s wounds, to care for him who shall have borne the battle, and for his widow and orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.”

**Notes:**
VA’s mission statement comes from PRESIDENT ABRAHAM LINCOLN’S 2ND INAUGURAL ADDRESS.

## VA’s Office of Small & Disadvantaged Business Utilization

- Mission: Advocate for all Small Businesses in VA Acquisitions
- Functions:  Aid and Counsel Small Businesses
- Provide what, when who and how
- Identification of Small Businesses
- Monitor Program Goals
- Train VA Acquisition Staff
-  Assist SB to Resolve Payment Problems
- Represent VA at Trade Associations and Government agencies
- _www.va.gov/osdbu_

**Notes:**
These are some of our major responsibilities.  We cover these areas in a variety of methods to include, review of the VA form 2268 at the appropriate thresholds; perform contract bundling reviews when required, perform reviews of subcontracting plans and resultant Standard Forms 294 and 295, and work to provide the acquisition professionals with timely assistance and guidance.

## VA Profile

- FY 2006 Budget $72 Billion
- FY 2006 Procurement Expenditure $10.3 Billion
- $2.5 Billion+ on Purchase Cards
-       - 3.86 million transactions
-       - Approximately 17,000 cardholders
- 24.8 Million+ Veterans; 39.1 Million Family
- 235,000 Employees – 3rd Largest
- 130,000 Volunteers

**Notes:**

VA operates the largest health care system in the free world.

More than one-half of VA’s budget is paid out in cash benefits.

In FY 2006, VA reported acquisitions totaling over $10.3 billion. 

VA has approximately 17,000 purchase card holders that spent over $2.5 billion using the cards in FY 2006.

With over 235,000 employees, VA is the third largest department in the Federal Government.

## VA Organizational Structure

- Veterans Health Administration (VHA)
- Veterans Benefits Administration (VBA)
- National Cemetery Administration (NCA)
- Staff Offices

**Notes:**
VHA operates 154 VA medical centers, over 130 nursing homes and domicilaries, 42 residential rehabilitation treatment programs, 88 comprehensive4 home-care programs and over 850 ambulatory care & community based outpatient clinics.  More than 98% of VA employees work in VHA which is also where the majority of procurement dollars are spent.
VBA operates 58 regional offices across the country and in the Philippines, and is responsible for providing benefits to veterans and their eligible family members, including disability compensation, pensions, education, loan guaranty and vocational rehabilitation programs and benefits.  VBA is responsible for providing the following benefits:
DISABILITY COMPENSATION
PENSIONS
EDUCATION
LOAN GUARANTY
VOCATIONAL REHABILITATION PROGRAMS AND BENEFITS
NCA operates 121 national cemeteries across the country and in Puerto Rico.  Over 70,000 people are buried in national cemeteries each year, and NCA provides over 300,000 headstones and grave markers to mark and honor the graves of America’s veterans.  In addition, NCA administers, on behalf of the White House, the Presidential Memorial Certificate Program, started by President John F. Kennedy in 1962.

## VHA Structure

**Notes:**
21 VETERANS INTEGRATED SERVICE NETWORKS (VISNs).  Although you see 23, VISNS 13 and 14 have been consolidated to form VISN 23.

## The Secretary’s Goals

- ARE THE GOALS
- OF
- EVERYONE IN VA!

**Notes:**
Although the oversight of the prime contracting and subcontracting goals are a major responsibility of OSDBU, the prime contracting goals are set annually by the Secretary and truly are everyone’s goals

## America’s Small Businesses The Engine That Drives the Economy

- Represent more than 99% of all businesses
- Employ more than one-half of the private U.S. work force
- Create 66% of all new jobs nationwide
- Generate more than 50% of the Nation’s Gross Domestic Product

## Small Business Programs

- Service Disabled Veteran and Veteran Owned Small Business Procurement Program
- 8(a) Program
- Historically Underutilized Business (HUB) Zone
- Small Business Set-Asides -- Total & Partial Small Business Competitiveness Demonstration Program

**Notes:**
The small business programs within VA

## Contract Bundling

-  ̈ The definition of contract bundling is the consolidation of two (2) or more procurement requirements for goods or services previously provided or performed under separate smaller contracts into a solicitation of offers for a single contract. The single contract is likely to be unsuitable for award to a small business concern due to the variance, size, or specialized nature of the elements of the performance specified; or the aggregate dollar value of the anticipated award; or the geographical dispersion of the contract performance sites; or any combination of the above.

**Notes:**
This is the official definition of contract bundling.

## Contract Bundling Hurts Small Business

- For every increase of 100 bundled contracts, there is a decrease of 60 contracts for small businesses.

## Contract Bundling Review

- Contracts with estimated value of $1M and above, to include option years, task and delivery orders, and blanket purchase agreements (BPAs) will require a contract bundling review

**Notes:**
Contract bundling reviews are also applicable to multiple award contracts (MACs), multi-agency contracts, Government-wide acquisition contracts (GWACs), and GSA’s Multiple award schedule program.

## FY 2006 Goals & Accomplishments

| 
Category | Secretary’s Goal | VA-wide Accomplishments |
| --- | --- | --- |
| Small Business | 25% | 29.45% |
| Small Disadvantaged Business | 4% | 4.93% |
| Section 8(a) | 5% | 3.92% |
| Women-Owned Small Business | 5% | 5.00% |
| Veteran-Owned Small Business | 7% | 6.49% |
| Service-Disabled Veteran-Owned Small Business | 
3% | 
3.39% |
| HUBZone Small Business  | 3.05% | 3.28% |

**Notes:**
Green – Secretary’s Goal was met or exceeded
Yellow – Within approximately 1.5% of meeting Secretary’s Goal

This year (as of August 2006), VA is in fact the leader in the SDVOSB category.  We met and exceeded our goal....accomplishing 3.39%

## Serving Those Who Served

**Notes:**
The New Contracting Priority for Service-Disabled & Veteran-Owned Small Businesses

## Developing Veterans Entrepreneurship

- Veterans Entrepreneurship and Small Business Development Act of 1999 (Public Law 106-50)
**Established 3% contracting goal for service-disabled veteran small business**
- Veterans Benefits Act of 2003 (Public Law 108-183 Created specific contracting authorities for service-disabled veteran small business
- Sole-source
- Set-aside

**Notes:**
Public Law 106-50 established a 3% government wide goal for contracting with service-disabled veteran owned small businesses.
Public Law 108-183 provided the authority to set-aside contracts for service disabled veterans by restricting competition only to SDVOSB, and to award sole source contracts, under specific situations, to sdvosb.

## Developing Veterans Entrepreneurship

- Executive Order 13360 (October 20, 2004)
**Required federal agencies to develop strategies for meeting 3% goal for contracting with service-disabled veteran firms**
- Veterans Benefits, Healthcare, and Information Technology Act of 2006 (Public Law 109-461)
**Enacted new authorities unique to VA**
- Stronger provisions for service-disabled veteran small business
- New provisions for all other veteran-owned small business
- Effective June 20, 2007

**Notes:**
E.O. 13360 required all federal agencies to develop an implementation strategy for meeting the 3% goal for contracting with sdvosbs.  VA’s implementation plan is a very aggressive one, and you can download a copy at www.vetbiz.gov
The reason we are here today is the new law, the Veterans Benefits, Healthcare and Information Technology Act of 2006, Public Law 109-461, and the new regulations to implement this law.  This law provides VA with stronger tools to use in contracting with sdvosb and vosb.  The law is unique to VA, as it amends Title 38 of the US Code, and Title 38 governs VA.  Therefore, these provisions apply only to VA.  We want to discuss today the new tools available and steps put in place to hold VA personnel accountable for carrying them out.

## Definitions

- Service-Disabled Veteran-Owned Small Business
- One or more service-disabled veterans—
- Own 51% or more of the firm
- Manage and control the daily operations of the firm
- Firm must be small under NAICS code

- Veteran-Owned Small Business
- One or more veterans—
- Own 51% or more of the firm
- Manage and control the daily operations of the firm
- Firm must be small under NAICS code

**Notes:**
Who are we helping here?  What is a sdvosb, a vosb?  The definitions have not changed and remain the same as listed in FAR 2.101.  SDVOSB must be at least 51% owned, managed, and controlled by one or more service disabled veterans.  If there is a permanent or severe disability, control may be given to the spouse or permanent caregiver.  In the case of a VOSB, must be at least 51% owned, managed and controlled by one or more veterans.  In both cases, they must be small businesses. A veteran owned firm must be registered in the Vendor Information Pages (VIP) before award can be made.

## The FAR and the VAAR

- Federal Acquisition Regulation (FAR)
**Provides general Government-wide policy for acquisition**
**Provides flexibility for specific agencies in agency supplements**
- Veterans Affairs Acquisition Regulation (VAAR)
**Adapts Government-wide policy to VA requirements**
**Implements laws unique to VA (such as PL 109-461****)**

**Notes:**
As of June 20, 2007, these new tools will be available to VA to do business with veterans.  The new tools contain language which displaces previous sole-source and set-aside language.  VA Contracting officers are to look to the language of the VAAR, not the FAR, as the implementing regulations will change VAAR..remember, this law changes Title 38 and is applicable ONLY to VA.

## Simplified Acquisition

- “May” use other than competitive procedures for service-disabled or other veteran-owned small firms if—
**Less than simplified acquisition threshold, or**
**Not more than $5 million**
- Decision not to set-aside is not subject to review

**Notes:**
Provisions are a bit more discretionary for purchases below the simplified acquisition threshold (100k)  This is consistent with the practice of keeping simplified acquisitions “simple” by not loading it up with new requirements.  However, contracting officers have the option to use noncompetitive (sole source) procedures for buys under the SAT.  This also applies to the test program buys of commercial items under $5M.  Contracting officers may sole source to SDVOSB or VOSB but SHALL give first priority to SDVOSB.  A contracting officer’s decision not to set-aside under the SAT is not subject to review.   (813.106)

## Simplified Acquisition

- “May” restrict award of micro-purchases to service-disabled or other veteran-owned small firms
- If so, “shall” distribute micro-purchases equitably among such firms
- [VAAR 813.202]

**Notes:**
Contracting officer may restrict purchase under the micro purchase threshold to SDVOSB and VOSB and SHALL distribute buys equitably among such firms to the extent the contracting officer opts to use this approach (813.202)

## Service-Disabled Veteran-OwnedSmall Business

- “May” sole-source if—
- Price not more than $5 million
- Service-disabled firm determined responsible
- Award at fair and reasonable price
- ]

**Notes:**
For SDVOSB, may do sole source or set-aside awards  (VAAR 819.7007) if the anticipated price is less than $%m, the SDVOSB has been determined to be responsible, and the award can be made at a fair and reasonable price.

## Service-Disabled Veteran-OwnedSmall Business

- “May” set-aside if—
- Meet FAR requirements at 19.1405
**Reasonable expectation of two or more offers**
**Award at fair market price**
- Ensure eligibility of firms qualified through surviving spouse
- Ensure firms are registered in VIP

**Notes:**
SDVOSB set-asides may be done if-same requirements as listed in FAR 19.1405.  VAAR 819.7005.  The new VAAR requirement:  must ensure eligibility is extended to firms owned and operated by surviving spouses, firms must be registered and verified in VIP (Veterans Information Pages, www.vetbiz.gov).  There is also a comparable provision for option to do set-asides under the SAT as discussed earlier.

## Veteran-Owned Small Business

- “May” sole-source if—
- Price not more than $5 million
- Veteran-owned firm determined responsible
- Award at fair and reasonable price
- No responsible service-disabled veteran firm identified

**Notes:**
Sole source awards may be done to VOSB when, the price is estimated to be less than $5M, the firm has been found to be responsible, award can be made at a fair and reasonable price, and, no responsible SDVOSB has been identified. VAAR 819.7008

## Veteran-Owned Small Business

- “May” set-aside if—
- Contracting officer has reasonable expectation of—
**Receiving two or more offers**
**Making award at fair market price**
- Contracting officer first considered service-disabled veteran set-aside
- [VAAR 819.7007]

**Notes:**
A set-aside for VOSB can be conducted provided, the contracting officer has a reasonable expectation of receiving two or more offers, can award at fair market price, and SDVOSB were considered first.  If the contracting officers receives only one offer, award should be made if the offeror is responsible and award can be made at fair market price.  If no acceptable offers are received, set-aside is dissolved and the requirement may be made available to other small business programs...hierarchy was also established in this rulemaking.

## General Provisions

- Consider service-disabled veteran small businesses before other veteran-owned
- For prime contract awards, non-manufacturer rule applies
- Noncompetitive actions exempt from synopsizing in FedBizOpps

**Notes:**
In going with the requirements of the 109-461, SDVOSB shall be considered before VOSB.  In all set-asides, including SDVOSB and VOSB, the non-manufacturer rule applies.  Noncompetitive awards to SDVOSB and VOSB do NOT need to be synopsized in FedBizOpps.

## VA Hierarchy of Programs

- Service-disabled veteran-owned firms
- Veteran-owned firms
- HUBZone firms and 8(a) participants (tied)
- All others (including general small business)

**Notes:**
I mentioned a moment ago about a hierarchy of small business programs, e.g., what happens if VOSB set-aside produces no offers and SDVOSB would have already been considered before even getting to the VOSB set-aside?  After SDVOSB, the #1 priority, comes VOSB in the #2 spot, followed by Hub zone and 8(a), on equal parity in the 3rd slot, and all other small businesses as priority #4.  However, if making an award using one of the other preferences, and one of the offerors shows up as SDVOSB or VOSB, that offeror gets preference.  For example, in a HUB zone set-aside, all bidders are Hub zone firms.  One Hub zone firm turns out to also be SDVOSB.  This firm goes to the head of the class.  Now, after doing market research and looking it all these programs, doing Vetbiz searches, etc, and you find no SDVOSB or VOSB, or maybe the firms are there but capability needs to be strengthened to ensure success—does this mean we just have to accept that certain requirements will be unsuitable for SDVOSB and VOSB participation?  No.

## Strengthening Capability

- Joint Ventures
- Existing rules made applicable to veteran-owned firms
- Mentor-Protégé Program
- New program established at VA

**Notes:**
109-461 and the implementing language provides tools to strengthen capability in the marketing place with joint venture arrangements and the new VA mentor protégée program.

## Joint Ventures

- Conforming changes made
**Firms must be registered in VIP**
**Veteran-owned firms also eligible, only at VA**
- Other existing rules continue to apply
**E.g., service-disabled firm must be managing venture**
**All participating firms must be small**
**        **

**Notes:**
Joint venturing authority already exists for SDVOSB.  The main changes are that the SDVOSB must make additional representation that it is verified for eligibility in VetBiz, and the existing provisions, that the SDVOSB is the managing partner, still apply.  Joint venturing is now available for VOSB.  The same rules applicable to SDVOSB apply to VOSB, veteran firm must be the managing partner and they are verified for eligibility in VetBiz.  SBA’s regulations provide helpful guidance in addition to IL________.  Firms can get into trouble if they don’t possess a clear understanding of the roles and responsibilities.  Its worthwhile for them to think it through carefully and also reduces the likelihood that you will have a problem on your hands later if you award to a joint venture (13 CFR 125.12(b)

## VA Mentor-Protégé Program

- Goals
- Encourage large businesses to provide mutually beneficial developmental assistance
- Improve prime contractor and subcontractor performance
- Foster long-term business relationships
- Strengthen and improve prime contracting and subcontracting opportunities at VA
- [VAAR 819.7101]

**Notes:**
Another option for strengthening capability is the Mentor Protégée Program, which is new in VA, and created by new Subpart 819.71 of the VAAR.  The goals are to encourage large businesses to provide mutually beneficial developmental assistance to SDVOSB and VOSB, and to improve prime and subcontract performance and foster long term business relationships. 

## Integrity of Firms

- Specific acquisitions
- Eligibility may be protested
- Contracting officer forwards to SBA for disposition

**Notes:**
Firms can protest the apparent awardee in particular acquisitions.  Contracting officers shall forward eligibility protests to SBA for disposition.  819.307.  

## Vendor Information Pages (VIP)

**Vendor Information Pages (VIP)**

**Notes:**
The database in which all veteran owned businesses are required to be registered in order to do business with VA.  www.vetbiz.gov

## How to Access VA Services for Enterprising Veterans

- VA Center for Veterans Enterprise
- Web Portal:  _http://www.vetbiz.gov_
- Email:  _VACVE@mail.va.gov_
- Toll Free: 1-866-584-2344 or
- Local:  (202) 254-0233

## Who To Contact For Help

- Mr. Wayne Simpson
- Deputy Director, Small Business Programs
- (202) 461-4300
- Ms. Deborah Van Dover
- Senior Procurement Analyst
- (202) 461-4255
- E-mail:  deborah.vandover@va.gov

**Notes:**
Please feel free to contact us for assistance.  

## Questions?

**Notes:**
So, new law and regulations provide aggressive new opportunities to serve the veterans who are our constituents at the Department of Veterans Affairs. Both VA and the vendors are accountable for their actions under these new authorities and opportunities.  This is a real opportunity to renew our commitment and achieve even more for those who have served us so honorably.  Thank you all for your past work and accomplishments, and we look forward for even better things to come.