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Concerns about NASA's sixth government-wide acquisition contract, known as SEWP, have been bubbling under the surface for months.
Industry experts are quietly rallying around NASA's draft plan for small business size standards. The fear is that the new size standards will make it impossible or nearly impossible for many small and medium-sized businesses to compete for contracts.
Those concerns surfaced in a new letter from Small Business Committee Chairman and member Rep. Roger Williams (R-Texas) and Rep. Nick Larota (New York).
“The Commission is concerned that the revenue-based size standards proposed for use in SEWP VI limit the ability of small businesses to service task orders without compromising their size status. “There is,” the lawmakers said in a letter to NASA Administrator Bill Nelson. “The previous vehicle iteration, SEWP V, demonstrated remarkable SMB inclusion, with small entities capturing an estimated 80% of contract value. The decision to use the overall contract NAICS code has become even more concerning, as this decision could limit the ability of small businesses to access task orders and prevent them from fully participating in SEWP VI. ”
Williams and LaRota are asking NASA to answer two basic questions and hold a staff-level briefing by January 18th.
The questions are:
- Detailed rationale for the decision to use NAICS code 541512, including efforts to reconsider its use.
- A detailed explanation that explains the concerns and limitations of understanding regarding the use of the non-manufacturer rule as it relates to NAICS code 541519.
“We are hearing concerns that these changes by NASA will prevent small businesses from partnering with NASA,” Williams said in an email to Federal News Network. “All small businesses have the right to compete for government contracts, and we must ensure that the fine print of these large deals allows them to do so. We look forward to hearing from the agency about these changes and how the agency believes they will benefit small businesses.”
A NASA spokesperson said in an email to Federal News Network that the space agency is reviewing Williams' letter.
“NASA's SEWP plays a critical role in helping NASA innovate for the benefit of humanity with the support of small businesses. Currently, under SEWP V, 106 small businesses Together, they received approximately $9.7 billion of the $12.2 billion in total spending for fiscal year 2023,” the spokesperson said. “The SEWP program provides several ways for NASA to assist small businesses, including providing direct support to small businesses that do not have available sales or technical resources. Our goal is for more than 60% of the funding to go to small businesses. NASA will continue to effectively oversee this program and help ensure small businesses have the opportunity to collaborate with NASA.”
Potential long-term effects
Stephanie Geiger, founder and CEO of Geiger Consulting Group and a federal marketing communications expert, said that if NASA continues to use the current small business size standards, small businesses will He said it would be a big blow.
“Based on the revenue size criteria currently included in the draft RFP, many small businesses already meet and exceed that size criteria, so unless they wish to change categories, small businesses will It is difficult to pursue SEWP VI without a mentor/protege agreement,” Geiger said. “We predict that within three years of signing the contract, he will be out of small businesses.”
Eric Crusius, a partner at Holland and Knight, said NASA's proposed changes will have far-reaching effects on the vendor community for many years.
“Small businesses with fewer employees will now be competing for these contracts with the world's largest contractors,” he said. “Because companies that qualify as small businesses are much smaller and may not have experience delivering large product orders to governments, changes to NAICS codes may result in lower performance metrics. Also, the small businesses that fulfill these orders may fall out of the small business norm more quickly, which could result in increased sales.”
NASA released an initial planning outline for SEWP VI earlier this fall. SEWP VI will also be a 10-year agreement and will be expanded to include more complete IT services than just products and related services, the company said. The draft RFP includes three categories:
- IT solutions include products in the information and communication technology (ICT) and audiovisual categories.
- Enterprise-wide IT solutions and services include everything from managed services to program integration to cloud and cyber services.
- IT professional services solutions focused on ICT and audiovisual services.
NASA plans to hold an industry day in October to receive feedback, announce a final call for proposals in 2024, and award awards by May 2025.
Concerns over changes to small business size standards are concerning because the SEWP program has enjoyed success as one of the most successful government-wide acquisition contracts over the past 30 years. The latest version, his SEWP V, is in his 8th year of 10 and is used by 142 companies, 100 of which are small and medium-sized businesses, with sales exceeding his $10 billion in 2023 It is expected that
More options from NASA
Jeremy Nussbaum, founder and principal consultant at Luminary Consulting Group, a firm that provides proposal and capture planning assistance to contractors, said NASA successfully leveraged NAICS code 541519 to obtain an exemption from the non-manufacturer rule. He said similar contracts should be considered.
“Two years ago, the Department of Homeland Security obtained a waiver from the Small Business Administration for FirstSource III procurements involving a combination of similar products and services. “We recognized that the process we followed for SEWP VI was excellent and that NASA would benefit from following a similar approach to seeking a waiver for SEWP VI,” Nussbaum said.
Crusius added that another way to address these concerns is to have a separate track that uses product NAICS codes for product-focused orders.
“This will allow NASA to continue what we have been doing well while providing additional solutions that build on the strong foundation we built with previous versions of SEWP,” he said. “Congress's interest in this is surprising because the impact of changes to the NAICS regulations will impact dozens of businesses owned by service-disabled veterans who have long been trusted partners with NASA. That’s not the point.”
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