SBA_Statement of Work.pdf

Statement of Work (SOW) U.S. Small Business Administration (SBA)

OIT

Total Addressable Markets for SBA Services

March 15, 2022

1. Background

The SBA’s Office of International Trade (OIT) works in cooperation with other federal and state agencies and private-sector groups to assist small businesses seeking to export. Through 21 U.S. Export Assistance Centers, SBA district offices and a variety of service-provider partners, OIT directs and coordinates SBA's ongoing export initiatives to promote and facilitate the growth of small business exports. This includes working with lenders to provide export finance solutions for small businesses and administration and oversight of the State Trade Expansion Program (STEP) grants. OIT’s Trade Policy division also serves as the voice for small business interests in Federal policy discussions and trade negotiations. For more on SBA’s Office of International trade, please visit www.sba.gov/international.

U.S. small businesses play a critical role in the domestic economy in employing almost half of the workforce and creating two-thirds of net new jobs and play an important role internationally as well. A total of 288,063 identified firms exported goods worth $1.5 trillion from the United States in 2019. Of those exporters, 280,496—or 97.4 percent—were small. Small firms exported goods worth $459.6 billion, making up 31.6 percent of exports by identified firms. We know from BEA data that 2019 service exports added another $876 billion of exports. It is not clear though how many service exporters are small businesses. A 2016 study on “Enhancing Export Opportunities for Small and Medium-sized Enterprises” suggests that small businesses account for 39 percent of the value of U.S. service exports, but does not account for the number of small businesses engaged in service trade. The lack of clear trade data on SME services inhibits a comprehensive understanding of SME participation in U.S. exports.

According to SBA’s Office of Advocacy, there are 32.5 million small businesses in the U.S. USTR suggests there are nearly 300,000 U.S. small- and medium-size (SME) businesses exporting goods to foreign markets. The associated math tells us that less than 1 percent of all small businesses export. This conclusion, however, is misleading due to some small businesses with business models that preclude the potential for exporting products or services, and it diminishes the significance of U.S. small business exporters and their importance to international trade.

It may be worth noting that 81 percent of small businesses, or 26,485,532 firms, have no employees (termed “nonemployer firms”). Only 19 percent, or 6,055,421 firms, have paid employees (termed “employer firms”).vi It is not clear what impact the existence of employees has on export interest and potential. (It may be worth noting that nonemployer firms include contractors such as rideshare drivers or home improvement specialists.) Surely some single owner small firms that could grow may not have the desire to expand into hiring employees or selling to new markets. Also, many businesses with employees, such as barber shops or dry cleaners, would not be expected to service or solicit international sales.

According to a recent study from the U.S. Cluster Mapping Project, there are 1,088 6-digit NAICS (2007 definitions) in the CBP data representing almost all the U.S. economy. Based on method used by the Mapping Project team, 778 of these 6-digit NAICS were classified as traded industries and the remaining 310 6-digit industries were classified as local. The traded industries accounted for 36.0% of total U.S.

employment, 50.5% of payroll and about 91.2% of patenting activity in 2009. In addition, traded industries are associated with higher wages on average than local industries ($52,501 versus $34,170 in 2009). This significant difference in wages speaks to the benefit of global market participation for U.S.

firms.

The meteoric rise of global e-commerce is also a major factor when determining an accurate current count of small business exporters. It is not clear from existing data how many small business exporters are being counted as such because their shipments do not pass the threshold for required reporting. Ninety-six percent of small businesses on eBay in the United States export internationally, sending goods to an average of 17 foreign countries. However, we lack the ability to account for these type of small business exporters that are shipping small quantities that do not require Electronic Export Information filing. An Electronic Export Information must be filed when the value of the goods is over $2,500 per Schedule B or the shipment is identified in FTR Section 30.2(a)(1)(iv).

The emergence of small sellers, such as those on eBay, being prolific exporters is particularly interesting when considering the conventional wisdom of a just a few years back that “Nearly two-thirds of small and medium-sized exporters only sell to one foreign market”. While one might argue that eBay exporters are not significant due to low volume, turnover, and a lack of employees, these small deals do add up to significant economic impact and potentially help tell quite a different story when it comes to small business export data.

All these factors combine to create a need for further statistics and additional data gap analysis on small business exporters. Lack of reliable data both in the number of exporters and total addressable market of potential exporters prevents an accurate accounting of the small business export population. This study is needed for SBA to deepen the understanding of small business exporting landscape and to help more effectively communicate with current and prospective exporters, both to educate them on SBA programs and services to support their global sales growth and to gather insight on how we can better serve these small businesses. Detailed data and analysis of small business exporting will also help SBA to communicate small business trade contributions to policymakers and more effectively represent small businesses in trade policy discussion and bilateral and multi-lateral trade negotiations.

2. Objectives

The primary purpose of this study is to determine the total addressable market (TAM) of U.S. small business export eligible companies (# of firms) and to make recommendations on the most effective means of marketing to and communicating with the universe of small business exporters.

3. Scope

The contractor shall provide all resources necessary to accomplish the tasks and deliverables described in this work statement. The contractor will conduct a study to determine the total addressable market (TAM) of U.S. small business export eligible companies (# of firms) and to make recommendations on the most effective means of marketing to and communicating with the universe of small business exporters. This research should include analysis of characteristics of successful exporters. Understanding characteristics of successful exporters (e.g., owner demographics, urban/rural) may help SBA OIT identify opportunity to address gaps in outreach, program design, or service delivery.

4. Specific Tasks

Quantitative Research (Task 1): The primary purpose of this study is to determine the total addressable market (TAM) of U.S. small business export eligible companies (# of firms). We know, intuitively, that not all small businesses are exporters or will ever be exporters. Tree trimmers, dog walkers, and hair salon owners, for example, have nothing to export and operate in the U.S. domestic, and often hyper- local, marketplace. At the same time, the small businesses that produce and distribute olive oil or handbags, for example, could potentially be exporters, but might not be exporting at present. These future small business exporters are an important part of the total addressable market comprised of both current and potential exporters.

While important to include all “tradeable” industries in the analysis of TAM, SBA is particularly interested in identifying those industries with the greatest potential for global expansion/SBA support. As a subset of the primary TAM research, the research should identify up to 20 top industries where SBA could focus attention to increase export sales. Current SBA loan data for exporters should be a component of the overall analysis.

The findings should make a determination as to the number and estimated annual aggregate dollar volume of U.S. small businesses currently exporting. While reliable data is available on mature exporters of traditional physical goods (i.e., manufacturing/wholesale), the data is less reliable on both service industries and providers of digital products (software, digital entertainment, etc.), not to mention “new-to-exporting” companies or “accidental” exporters who discovered that their e-commerce engine received an order from overseas.

One additional a data point is the volume of small business export loans in the marketplace vs. export loans supported by SBA export financing. In other words, what percentage of all export loans to small businesses are facilitated by SBA? This information will help inform policy making and dialogue with Congress and influence marketing and promotion efforts.

Task 1 Deliverables to Include:

1. Number of small businesses that represent the TAM for SBA export services.

2. Percentage of small businesses from tradeable sectors currently exporting.

3. Top industries for SBA OIT to target for outreach and program support.

4. Aggregate dollar value of current small business exports (including service exports).

5. Percentage of export loans in the marketplace to small businesses that are supported by SBA export financing

Qualitative Research (Task 2): The secondary purpose of the research is to make recommendations on the most effective means of marketing to and communicating with the universe of small business exporters, including those untapped audiences of small businesses with an interest in potentially exporting. Is it enough for the SBA OIT to target individual exporters with custom advice? Are there methods through which larger audiences can be reached with awareness messaging that stimulates interest in exporting from that universe of potential exporters, or prompts current exporters to ask for a business consultation or apply for an SBA-backed loan with their local lender? Are there specific industry associations that SBA OIT should be collaborating with on outreach?

This research should also include analysis of characteristics of successful exporters. Understanding characteristics of successful exporters (e.g., owner demographics, urban/rural) may help SBA OIT identify opportunity to address gaps in outreach, program design, or service delivery.

Furthermore, and with respect to the trade finance products offered through private sector banks and guaranteed by the SBA, the research should make recommendations on any changes to the current suite of term loans and working capital lines backed by the SBA Office of International Trade.

Task 2 Deliverables to Include:

1. Recommendations on marketing strategy for SBA export finance products, to include primary messaging and target audience

2. Insight on characteristics of successful exporters

3. Recommended program or policy updates to better support the U.S. small business exporter community

When complete, the findings and recommendations of this research will assist the SBA Office of International Trade in a) better framing the nature and impact of its work; b) improving the products and services it provides to U.S. small business exporters; and (c) more effectively targeting outreach – all to increase total U.S. exports and drive growth in export-related jobs.

By “better framing the nature and impact” SBA OIT will be able to tell a more accurate and effective story of the role of SBA financing in supporting small business export growth. Common misconceptions, such as the statement that “less than one-percent of small businesses export” under-values the significance of exporting for small business and the role of OIT in supporting small business export growth.

Better insight on gaps in service can not only improve product and service offerings, but also help focus program innovations and provide academic evidence for justification to support policy updates.

Recommendations that the researcher would make for the SBA to implement may also include SBA Export Finance Specialists targeting specific industry groups in their region to raise awareness of SBA International Trade products and/or OIT collaborating with key trade groups to raise awareness of exporting opportunities.

5. Deliverables/Delivery Schedule

Table 1: Deliverables

PWS #

PERFORMANCE DELIVERABLE

REQUIREMENT

DELIVERABLES SCHEDULE INVOICE SCHEDULE

(Total per Invoice)

1.0 Kick off meeting 1 week after contract award 5% upon COR approval.

2.0 Research methodology (on all 8

deliverables)

1st Draft with research proposal, due 6 weeks

10% upon COR approval

3.0 Bi-weekly meetings to discuss Bi-weekly 10% Upon COR

progress approval

4.0 Mid-point check-in 7 weeks after kickoff 10% upon COR approval

5.0 Draft report (including all 8

deliverables)

14 weeks after kickoff 10% upon COR approval

6.0 Final Report 7 days after the receipt of comments

on draft report

(including all 8 deliverables)

45% Upon COR approval

7.0 Oral Presentations/Management

Briefings

7 days after receipt of final report 10% Upon COR approval

Draft report (including all 8 deliverables) (5.0) eight deliverables are as follows:

1. Number of small businesses that represent the TAM for SBA export services.

2. Percentage of small businesses from tradeable sectors currently exporting.

3. Top industries for SBA OIT to target for outreach and program support.

4. Aggregate dollar value of current small business exports (including service exports).

5. Percentage of export loans in the marketplace to small businesses that are supported by SBA export financing

6. Recommendations on marketing strategy for SBA export finance products, to include primary messaging and target audience

7. Insight on characteristics of successful exporters

8. Recommended program or policy updates to better support the U.S. small business exporter community

What is required for the Final Report (6.0)

The final research report should contain an executive summary, a literature/data source review of the relevant research, discussion and description of the data and methodology, the results and findings of the analysis, data limitations, policy implications, and overall conclusions and recommendations. The final research report should be thorough, clear, concise, and cohesive.

6. Inspection and Acceptance

The government will review, for completeness, preliminary or draft deliverables submitted by the Contractor, and may return them to the Contractor for correction. Absence of comments by the government will not relieve the Contractor of the responsibility for complying with the requirements of this work statement. Final approval and acceptance of deliverables required herein shall be provided to the contractor in writing by the designated government official. The Contractor shall not construe any letter of acknowledgment of receipt as a waiver of review, or as an acknowledgment that a deliverable is in conformance with this work statement. Any approval given during preparation of a deliverable, or approval for shipment shall not guarantee the final acceptance of the completed deliverable.

7. Security

i. Physical Security The Contractor shall establish and comply with appropriate administrative, technical, and physical safeguards to protect all Government data, property, facilities, and personnel.

ii. Data All electronic data and documentation provided or made accessible by the Government, and all electronic data and documentation produced during performance of the services associated with this award are the property of, and are owned by, the Government.

The Contractor shall not disclose and must safeguard all data and personnel work products that are obtained or generated in the performance of this contract. The Contractor shall not access data or documentation that is not required in the performance of services awarded via this contract/task order, even if the data or documentation is available to contractor personnel. The Contractor shall immediately report any instance of non-compliance with this requirement to the Contracting Officer.

The government may authorize contractor access to controlled, sensitive, classified, or other government information for use in performance of this contract. The term “government information” includes information furnished by the government and information acquired or developed by the contractor in performance of the contract. The contractor shall provide immediate written notification the Contracting Officer if a breach of any of the requirements in this section occurs.

The contractor shall not publish or otherwise divulge government information, in whole or in part, in any manner or form, or authorize or permit others to do so, taking such measures as are necessary to restrict access to such information to only those employees needing the information to perform work required by the contract, i.e., on a “need to know” basis. The contractor is cautioned that its employees and subcontractors have no blanket authorization for access to government information based on their employment status.

Government data, including electronic data, shall not be removed from the Government facility without the express permission of the Contracting Officer or the Contracting Officer’s Representative.

Government data including documentation shall be surrendered to the Government upon contract completion and upon request. Government personnel, including government security personnel, have the express right to inspect documentation for any reason and at any time during the term of this award. The contractor shall ensure that direct and subcontract employees:

Only access information required to perform their tasks as specified in this contract, and do not access information that is not required to perform these tasks.

Ensure continuous government access to their work product in support of this contract.

Do not email government information to non-government email accounts.

Do not discuss government information with non-government personnel (including the contractor employee’s management).

Do not remove, or conspire to remove, government information out of a government facility or system, either physical and electronic, without written Contracting Officer or Contracting Officer Representative authorization.

Comply with non-disclosure agreements.

Protect the confidentiality of government information, and do not disclose government information to any unauthorized person.

iii. Facilities The contractor and all associated subcontractors’ employees shall comply with all facility access and use policies and procedures, including security policies and procedures. Questions shall be referred to the Contracting Officer’s Representative. The contractor shall provide all information required for background checks to meet facility access requirements. The contractor shall comply with all personal identity verification requirements associated with facility access. Should the security procedures at any individual facility change, the Government may require changes in contractor security matters or processes.

iv. Property and Personnel The Contractor shall report threats to government property and personnel employed by or supporting the Government.

To help ensure the protection of the life and health of all persons, and to help prevent damage to property, the Contractor shall comply with all Federal, State, and local laws and regulations applicable to the work being performed under this contract. These laws are implemented or enforced by the Environmental Protection Agency, Occupational Safety and Health Administration (OSHA) and other regulatory/enforcement agencies at the Federal, State, and local levels.

The Contractor agrees to use only qualified, responsible, ethical, and capable people to perform the work.

Contractor employees shall perform services at all times in a professional, ethical manner.

Unprofessional, unethical, or threatening conduct will not be tolerated. Contractor employees with knowledge of unprofessional, unethical, or threatening behavior or conduct by any person shall immediately report such behavior or conduct to the Contractor. The Contractor shall immediately report receipt of a report concerning such behavior or conduct to the Contracting Officer.

The contractor and its employees shall only conduct business covered by this contract during periods paid for by the government and shall not conduct any other business on government premises or government time. The contractor shall not use government time, equipment, materials except for the express purpose of providing government support.

Contract personnel attending meetings, answering Government telephones, and working in other situations where their contractor status is not obvious to third parties shall identify themselves as Contractors to avoid creating an impression that they are Government officials. The Contractor shall also ensure that all documents or reports produced by the Contractor are suitably marked as Contractor products or that Contractor participation is appropriately disclosed.

The Contractor shall, at its own expense, immediately remove employees who have displayed or are displaying or engaging in unprofessional, unethical, or threatening behavior or conduct. The Contracting Officer may require that the Contractor remove from the job at its own expense, employees who jeopardize or interfere with mission accomplishment, or endanger or threaten to endanger persons or property, or whose continued employment under this contract is inconsistent with the interest of agency security.

8. Packaging, Packing, and Shipping

All data and correspondence submitted shall reference:

Contract/order number Small Business Administration Program office name Contracting Officer Representative Name Description of the items contained therein

9. Government Furnished Property

Not Applicable

10. Type of Contract

The Government anticipates award of a firm fixed price type contract.

11. Period of Performance

The anticipated period of performance dates are June 1, 2022 to September 30, 2022.

12. Place of Performance

The primary place of performance will be at the Contractor facility. Contractor employees are permitted to telework in accordance with the contract terms and conditions.

13. Hours of Operation

Not Applicable

14. Travel and Other Direct Costs (ODC)

Travel is not required in support of the requirements in this work statement.

15. Conflicts of Interest

No potential organizational conflicts of interest have been identified by the government. The contractor shall ensure that neither the contractor or any subcontractor is biased because of financial, contractual, organizational, or other interests which relate to the work under this contract. The contractor agrees it will make an immediate and full disclosure, in writing, to the Contracting Officer of any potential or actual organizational conflict of interest or the existence of any facts that may cause a reasonably prudent person to question the contractor's impartiality because of the appearance or existence of bias or an unfair competitive advantage. Such disclosure shall include a description of the actions the contractor has taken or proposes to take to avoid, neutralize, or mitigate any resulting conflict of interest.