FS III Industry Day_Master Deck_12102020_final.pdf

FIRSTSOURCE III INDUSTRY DAY

Hosted by the Office of Small and Disadvantaged Business Utilization

(OSDBU) and the Office of Procurement Operations (OPO)

December 10, 2020

Presenters

DHS Small Business Program

Agenda Introduction to DHS and FirstSource Overview

FirstSource II/III Overview

Questions and Answers (includes a break) and

Next Steps

Presenters

•DHS OSDBU Executive Director – E. Darlene Bullock

•Christopher Clarke – Attorney, Office of General Counsel, Small Business Administration

•Carrie Herndon – FirstSource III Contracting Officer

•Gregory Blaszko – FirstSource III Contracting Officer

DHS SMALL BUSINESS PROGRAM

E. Darlene Bullock Executive Director

Office of Small and Disadvantaged Business Utilization (OSDBU)

The Department of Homeland Security

Mission:

• Counter Terrorism and Homeland Security Threats

• Secure U.S. Borders and Approaches

• Secure Cyberspace and Critical Infrastructure

• Preserve and Uphold the Nation’s Prosperity and

Economic Security

• Strengthen Preparedness and Resilience

• Champion the DHS Workforce and Strengthen the

Department

Organization:

• 3 Directorates

• 7 Operational Components

• 14 Headquarters Offices

Note: There are ten contracting offices.

DHS Considerations

• Mission first!

⎻DHS small business contractors create jobs, contribute to the revenue base through the payment of taxes, and have opportunities to grow and flourish in support of the DHS mission.

⎻Small business inclusion in federal contracting is a longstanding government-wide policy objective.

• Set-Asides (prime and subcontracting) to the maximum opportunity practical – the law – FAR 19.201

• An office established by law in federal agencies ⎻ Ensures DHS participation in small business (includes socioeconomic) utilization ⎻ Manages the DHS small business program

• Separate and distinct from contracting

• The OSDBU works with the DHS OCPO, the ten DHS Heads of Contracting buying activities, and the Component small business specialists to ensure there are set-aside opportunities for small businesses—mission enablers.

What is the OSDBU? Why is the OSDBU involved?

What are the Federal Socioeconomic Programs?

• The importance of small business to the United States’ economy is so great that Federal legislation has been enacted to ensure that small businesses have access to government-spending.

• While there are several sub-categories of small business, there are socioeconomic categories, including the following: HUBZone Small Business; Small Disadvantaged Business (SDB), which encompasses the 8(a) Business Development Program; Woman- Owned Small Business (WOSB/EDWOSB); and Service-Disabled Veteran-Owned Small Business (SDVOSB).

• Small business laws affect most procurement policies in the government.

What are Small Business Set-Asides? Why have a FirstSource Program?

• Provide a level playing field for small businesses ⎻ $500 Billion spent by Federal Government in contracts annually ⎻ Approximately $21 Billion DHS Contract Spend in FY 2020

• Limits competition for certain contracts to small businesses

• Some set-aside programs are for small businesses in certain socioeconomic categories:

⎻ HUBZone ⎻ Service-Disabled Veteran-Owned ⎻ 8(a) ⎻ Women-Owned/Economically Disadvantaged Women-Owned

CURRENT FIRSTSOURCE PROGRAM

OVERVIEW

The History of FirstSource

General Small

Business

EDWOSB

SDVOSB

8(a)

40 IDIQ Awards*

HUBZone

*Some FSII Contractors were awarded contracts in multiple socioeconomic categories.

• Based on the success of FirstSource, DHS established FirstSource II in 2012. Awards in 2012/2013.

• Functional categories awards by socioeconomic status

• DHS needed a more efficient way to access commoditized IT.

• DHS established FirstSource in 2006.

• All Small business awards

FirstSource FirstSource II

DHS has issued over 28,000 task orders valued at $6.5B.

100% Small Business

Benefits of FirstSource Program

Enables DHS to significantly impact socioeconomic achievement

Optimized Terms and Conditions

Best Ppractice

Streamlined Acquisition Procedures

Leverage Pricing Pre-screened Vendors

FirstSource II Data by Socioeconomic Category*

Small Business $1.7B / 46.1% /

6,089 Task Orders HUBZone

$1.2B / 33.8% / 5,859 Task Orders

SDVOSB

$439M / 12.0% / 1,225 Task Orders

EDWOSB

$132M / 3.6% / 596 Task Orders

8(a) $164M / 4.5% /

1,079 Task Orders

*Total Value Base Plus All Options

Key Takeaways

• Almost 15,000 task orders have been issued

• Approximately $3.7 billion dollars spent to date

• 40% of all task orders have been awarded to HUBZone vendors

• 1/3 of FirstSource spend has gone to HUBZone vendors

FirstSource II Data by Component*

$3.3B

$3.7B

*Total Value Base Plus All Options

CBP

$1.3B / 35.7% /

4,218 Task Orders

USCIS

$580M / 15.8% / 726 Task Orders

FEMA

$347M / 9.5% /

2,705 Task Orders

TSA

$344M / 9.4% / 513 Task Orders

HQ

$336M / 9.2% /

1,010 Task Orders

ICE

$260M / 7.1% /

2,387 Task Orders

USSS

$234M / 6.4% / 894 Task Orders

USCG

$195M / 5.3% / 1,702

Task Orders

FLETC

$52M / 1.4% / 622 Task

Orders

OIG

$11M / 0.3% / 71 Task

Orders

Key Takeaways

• Top three FSII Component spend to date:

- CBP with 36% of spend

- USCIS with 16% of spend

- FEMA with 9.5% of spend

• HQ (OPO) issued over 1,000 task orders and $336 million in spend

• TSA had 513 task orders but achieved 9.4% of the total spend

FirstSource II IT Commodity Spend Breakdown

Software Licenses &

Maintenance 36.8%

Desktops/Laptops /Tablets

21.6%

Other 13.9%

Hardware Maintenance 3.8%

Value-Added Reseller Services

2.5%

Servers/Routers 21.4%

Key Takeaways

• Software is almost 37% of the total spend

• Almost $800 million dollars were spent on Desktops/Laptops/ Tablets

• Servers/Routers account for approximately 21% of the total spend

FIRSTSOURCE III OVERVIEW

FirstSource III Scope

• Full array of Value-Added Reseller services and access to a wide and renewable variety of IT commodities and solutions (hardware and software) from multiple Original Equipment Manufacturers (OEMs) that will be available through Delivery Order competitions.

• How will the scope of requirements be provided?

o Under two distinct NAICS codes ⎻ IT Value-Added Reseller (ITVAR) (NAICS 541519, footnote 18) ⎻ Software Publishing (NAICS 511210, footnote 20)

FirstSource III Program Overview

•Two NAICS Codes - Two Different Size Standards •What’s a NAICS Codes?

oA NAICS (pronounced NAKES) Code is a classification within the North American

Industry Classification System. The NAICS System was developed for use by Federal Statistical Agencies for the collection, analysis and publication of statistical data related to the US Economy.

oNAICS is a Self-Assigned System; no one assigns you a NAICS Code. What this means is a company selects the code that best depicts their primary business activity and then uses it when asked for their code. Companies can have multiple NAICS codes and can qualify as small or other than small in those NAICS codes.

oSBA creates size standards based on established NAICS Codes.

•What is a size standard?

oSize standards define the largest size a business can be to participate in government contracting programs and compete for contracts reserved or set aside for small businesses. Size standards vary by industry, and are generally based on the number of employees or the amount of annual receipts the business has.

•541519 footnote 18, IT Value Added Reseller (ITVAR) Size Standard is 150 employees Footnote 18 is an exception under NAICS 541519 January 2016 definition of NAICS 541519 footnote 18 finalized by SBA Reference 13 CFR 121.201

• NAICS Code 541519 footnote 18 - An Information Technology Value Added Reseller (ITVAR) provides a total solution to information technology acquisitions by providing multi-vendor hardware and software along with significant value added services. Significant value added services consist of, but are not limited to, configuration consulting and design, systems integration, installation of multi-vendor computer equipment, customization of hardware or software, training, product technical support, maintenance, and end user support. For purposes of Government procurement, an information technology procurement classified under this exception and 150-employee size standard must consist of at least 15% and not more than 50% of value added services, as measured by the total contract price. In addition, the offeror must comply with the manufacturing performance requirements, or comply with the non-manufacturer rule by supplying the products of small business concerns, unless SBA has issued a class or contract specific waiver of the non-manufacturer rule. If the contract consists of less than 15% of value added services, then it must be classified under a NAICS manufacturing industry. If the contract consists of more than 50% of value added services, then it must be classified under the NAICS industry that best describes the predominate service of the procurement.

https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:270:121.201 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:270:121.201 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:270:121.201 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:270:121.201

511210 Software Publishing Size Standard is 500 employees (nonmanufacturer) This industry comprises establishments primarily engaged in computer software publishing or publishing and reproduction. Establishments in this industry carry out operations necessary for producing and distributing computer software, such as designing, providing documentation, assisting in installation, and providing support services to software purchasers. These establishments may design, develop, and publish, or publish only. These establishments may publish and distribute software remotely through subscriptions and downloads.

For purposes of Government procurement, the purchase of software subject to potential waiver of the nonmanufacturer rule pursuant to 13 CFR 121.1203(d) should be classified under this NAICS code.

•Ceiling: $10 Billion

•Awards: Multiple IDIQ Awards per functional NAICS Code for each socioeconomic category – CO will discuss

•Period of Performance: 10 years ⎻5 year base period, 1 three-year option period, 1 two-year option period

What’s Different: FS II v/s FS III

•Longer Period of Performance – 10 years

•Two NAICS Codes with two different size standards

•Software as the end product and software licenses will be solicited and awarded under NAICS 511210, Software Publishing

• Increase in Managed Services under NAICS 541519, footnote 18

24Office of Small & Disadvantaged Business Utilization

•Nonmanufacturer Rule (NMFR) applies to both NAICS codes o NMFR not applicable when FirstSource Contracts were awarded o The ITVAR is unique. NMFR is applicable o What is the Nonmanufacturer Rule?

Normally for small business set-asides — other than construction or service contracts

— the prime contractor that’s supplying products to the government is required to cover at least 50 percent of the cost of manufacturing those products.

The nonmanufacturer rule is an exception to above requirement. The rule allows a small business to supply products it did not manufacture — as long as those products come from another small business.

Reference 13 CFR 121.406

25Office of Small & Disadvantaged Business Utilization http://www.sba.gov/partners/contracting-officials/small-business-procurement/set-aside-procurement

•How is DHS able to award FSIII to small businesses as prime contractors?

oWaiver to the Nonmanufacturer Rule o If the SBA determines that there are no small business manufacturers available to supply a product, it may waive the nonmanufacturer rule.

oDHS has received the required individual waiver from SBA for FirstSource III.

oApplicable to all delivery orders

26Office of Small & Disadvantaged Business Utilization

What’s The Same: FS II v/s FS III

•For base IDIQ contracts offerors may submit proposals as applicable – CO discussion

•Delivery orders competitions are only within the same functional category and socioeconomic group of awards – CO discussion

•First choice for DHS acquisition community

27Office of Small & Disadvantaged Business Utilization

High Level Joint Ventures (JV) Discussion

•What is a JV?

oReference 13 CFR 121.103(h) o An association of individuals and/or concerns with interests in any degree or proportion intending to engage in and carry out business ventures for joint profit over a two year period, for which purpose they combine their efforts, property, money, skill, or knowledge but not on a continuing or permanent basis for conducting business generally.

28Office of Small & Disadvantaged Business Utilization

• A specific JV entity may not be awarded contracts beyond a two-year period, starting from the date of the award of the first contract without the partners to the JV being deemed affiliated for the JV.

oWhat’s affiliation?

Concerns are affiliated with each other when one controls or has the power to control the other, or a third party or parties controls or has the power to control both. Reference 13 CFR 121.103 Exceptions to JV affiliation:

• Every party to the JV is small

• All Small Mentor Protégé Program JVs

• Once a JV receives a contract, it may submit additional offers for a period of two years from the date of that first award.

29Office of Small & Disadvantaged Business Utilization

• An individual JV may be awarded one or more contracts after that two-year period as long as it submitted an offer including price prior to the end of that two-year period.

• SBA will find JV partners to be affiliated, and thus will aggregate their receipts and or employees in determining the size of the JV for all small business programs, where the JV submits an offer after two years from the date of the first award.

• JV may create additional JVs; however, long-standing inter-relationship or contractual dependence between the same JV partners will lead to a finding of general affiliation between and among them.

30Office of Small & Disadvantaged Business Utilization

• Reference 13 CFR 121(h)(1)(ii)

• (1) Size of joint ventures. (i) A joint venture of two or more business concerns may submit an offer as a small business for a Federal procurement, subcontract or sale so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract.

• (ii) Two firms approved by SBA to be a mentor and protégé under §125.9 of this chapter may joint venture as a small business for any Federal government prime contract or subcontract, provided the protégé qualifies as small for the size standard corresponding to the NAICS code assigned to the procurement, and the joint venture meets the requirements of §124.513 (c) and (d), §125.8(b) and (c), §125.18(b)(2) and (3), §126.616(c) and (d), or §127.506(c) and (d) of this chapter, as appropriate. Except for sole source 8(a) awards, the joint venture must meet the requirements of §124.513(c) and (d), §125.8(b) and (c), §125.18(b)(2) and (3), §126.616(c) and (d), or §127.506(c) and (d) of this chapter, as appropriate, as of the date of the final proposal revision for negotiated acquisitions and final bid for sealed bidding. For a sole source 8(a) award, the joint venture must demonstrate that it meets the requirements of §124.513(c) and (d) prior to the award of the contract.

31Office of Small & Disadvantaged Business Utilization

High Level Joint Ventures (JVs) Discussion

•Past performance must be considered from the mentor and protégé

•JV can be formal or informal

•JV must be in writing

•JV must be separately identified in SAM as a JV

32Office of Small & Disadvantaged Business Utilization

•JVs are subject to two work share restrictions:

oLimitations on Subcontracting Governs work share between the joint venture and its subcontractors The 50% formula applies but only to the service portion of the work requirement

• Reference 13 CFR 125.6

33Office of Small & Disadvantaged Business Utilization o“40 Percent Rule” Governs work share between the joint venture partners In the context of small business joint ventures, the 40 percent rule says that “ [t]he amount of work done by the partners will be aggregated and the work done by the small business protege partner must be at least 40% of the total done by the partners.”

Measured in dollars and not labor hours

34Office of Small & Disadvantaged Business Utilization

Rerepresentation

• Reference CFR 121.404(g)

• A company that represents as a small business and qualifies as small at the time of its initial offer which includes price is considered to be a small business throughout the life of the contract.

oUnder a Multiple Award Contract (MAC) the company will be considered small for each order issued against the contract with the same NAICS code and size standard unless the CO requests a size certification in connection with a specific order.

o If the company, through natural growth, becomes other than small, the procuring agency may exercise options and still count the award as an award to a small business

• Companies are required to rerepresent for various reasons. If unable to recertify the company will be removed from FSIII and will not be able to compete for future orders.

35Office of Small & Disadvantaged Business Utilization

Why would I not be able to Recertify?

• Reference 13 CFR 121.404(g)

• However, the following exceptions apply:

o Within 30 days of an approved contract novation, a contractor must recertify its small business size status to the procuring agency, or inform the procuring agency that it is other than small. If the contractor is other than small, the agency can no longer count the options or orders issued pursuant to the contract, from that point forward, towards its small business goals.

o In the case of a merger, sale, or acquisition, where contract novation is not required, the contractor must, within 30 days of the transaction becoming final, recertify its small business size status to the procuring agency, or inform the procuring agency that it is other than small. If the contractor is other than small, the agency can no longer count the options or orders issued pursuant to the contract, from that point forward, towards its small business goals. The agency and the contractor must immediately revise all applicable Federal contract databases to reflect the new size status.

36Office of Small & Disadvantaged Business Utilization https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=d254fd6f55dec6a6ba3d0fb8c22b9aa4&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=d254fd6f55dec6a6ba3d0fb8c22b9aa4&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404

When is it triggered?

• Recertification is required:

o(A) When a concern, or an affiliate of the concern, acquires or is acquired by another concern;

o(B) From both the acquired concern and the acquiring concern if each has been awarded a contract as a small business; and o(C) From a joint venture when an acquired concern, acquiring concern, or merged concern is a participant in a joint venture that has been awarded a contract or order as a small business.

o(D) If the merger, sale or acquisition occurs after offer but prior to award, the offeror must recertify its size to the contracting officer prior to award.

37Office of Small & Disadvantaged Business Utilization https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=3e1275e6fc3818559e5d445a696109ce&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404 https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=d254fd6f55dec6a6ba3d0fb8c22b9aa4&term_occur=999&term_src=Title:13:Chapter:I:Part:121:Subpart:A:Subjgrp:272:121.404

BREAK

INDUSTRY CHAT POD QUESTIONS

AND ANSWERS

FIRSTSOURCE III

CONTRACT UPDATE

Carrie Herndon, Contracting Officer Gregory Blaszko, Contracting Officer

FirstSource III Contracting Update: Reviewing Your Feedback

•Responses to Draft Solicitation Received November 20, 2020 o Functional Categories and Contract Structure o No Proposal Limits o Competition for Orders Under FirstSource III o Evaluation Factors o Supply Chain Certification o Word Count for Responses

Procurement Schedule

•Late January 2021: Solicitation Release

•Late January 2021: Preproposal Conference

•Mid February 2021: Phase I Proposals Due

Closing

Thank you for participating in our industry day today!

The slides and a recording of today’s event will be posted to beta.sam at https://beta.sam.gov/

Please send questions to FSIII@hq.dhs.gov https://beta.sam.gov/ mailto:FSIII@hq.dhs.gov