Angel Carrera, Branch Chief
Department of General Services Procurement Division
Office of Small Business and DVBE Services
707 Third Street, 1st Floor, Room 400
West Sacramento, CA 95605
RE: The National Association of Women in Real Estate Businesses (NAWRB) Comments: SB Rule Changes Notice of Proposed Rulemaking (NPRM)
Dear Ms. Carrera,
Thank you for the opportunity to provide comments on the Small Business Rule Changes Notice of Proposed Rulemaking (NPRM) and Request for Comments.
The National Association of Women in Real Estate Businesses (NAWRB) is a leading voice for women specializing in the housing ecosystem. NAWRB is providing women the tools and opportunities for economic expansion and growth, while advocating and promoting women-owned businesses and increasing women’s homeownership.
NAWRB empowers women in our advocacy relationships with the Office(s) of Minority and Women Inclusion (OMWI), Government Sponsored Enterprises (GSE), the Small Business Administration (SBA), the National Women’s Business Council (NWBC) and other organizations. Since August of 2010, we have been championing the OMWIs, GSEs, SBA and NWBC to bring more diversity and inclusion to our industry with their awareness, opportunities and access.
The NAWRB Diversity and Inclusion Leadership Council (NDILC) brings women to the forefront of the housing ecosystem with accountability and results. The NAWRB Women’s Homeownership Initiative (WHI), introduced earlier this year, strives to increase women’s homeownership throughout the nation and decrease women’s poverty by cementing their personal and professional strides.
Most recently, we launched NAWRB’s Women’s Global Resource Center, providing a women’s depository for vendors and clients to grow their diverse spend and increase women’s employment at all levels.
In response to the Small Business Rule Changes Notice of Proposed Rulemaking (NPRM), we provide the following comments: In relation to the changes in regulations to the Small Business (SB) Certification Program, NAWRB expresses its support and concern.
§1896.12. Eligibility for Certification as a Small Business.
The increase in the small business gross revenue threshold from $14 million to $15 million will adversely affects small businesses that do not meet either mark. This will raise the competition between eligible businesses for contracts and, most importantly, it will enable the SB Certification Program to continue contracting to businesses that have exceeded the $14 million threshold in yearly revenue, thus preventing other small businesses from benefitting from these would-be available contracts. As businesses succeed past the Program’s revenue threshold, they make room for other companies to compete. Increasing the threshold only serves to prevent this cycle and potentially hurts smaller businesses in the process.
The newly introduced requirement for owners or certified firms to submit an Internal Revenue Service Form 4506-T, for the purpose of requesting a tax return transcript for certification eligibility review will cost participating businesses time, but it will contribute to a better program. This requirement will ensure that only businesses that are truly eligible are able to participate, creating a fairer environment in the SB Certification Program, and streamlining its operation.
Similarly, the added regulations to ensure officers, owners, partners, managers or members of a business reside in California, such as providing individual state tax returns, will help guarantee that only eligible businesses compete for these contracts. The accountability created by this added transparency will grow the fairness and efficiency of the program.
The duty of the Department to provide the public and local agencies with web access to a small business statewide directory, maintained by the OSDS for searching and confirming small businesses, will help entities locate eligible businesses more efficiently. This will better connect agencies with available small business contractors and enable small businesses to help maximize their book of business with potential contracts. With the interests of women entrepreneurs in mind, those who have elected to not go through the vetting process or know about it, NAWRB launched a Women’s Global Resource Center (NWGRC) with the goal of growing the women-owned business network and women’s employment on an international scale. As the depository grows in size and connections grow, so does the awareness to help empower business owners across the world with diverse spend.
§ 1896.15. Definition and Determination of Commercially Useful Function (CUF).
The new stringent regulations for the definition and determination of a small business possessing a CUF, such as being responsible for the execution of a distinct element of the work of the contract and not further subcontracting a portion of the work that is greater than that expected to be subcontracted by normal industry standards, will both promote eligible businesses that do provide a CUF and eradicate companies that do not meet these standards, thereby restricting competition on the program only to firms in good eligibility standing.
§1896.16. Certified Status
The new regulation demanding that a small business promptly provide written notification to OSDS of any changes in its operation or ownership during its certification period that may affect its continuing eligibility as a small business, prevents ineligible businesses from utilizing loopholes in the program. The fact that if a small business is sold during its certification period, certification ceases and is not transferable to new owners, helps contribute to transparency and assurance of eligibility for all participating companies.
It is our contention that the validity of certification for a period of 36 months without exceeding 60 months is too lengthy. If a business were to lose their certification eligibility at some point during this 3-5 year period and not report it, it would allow too much time for the misallocation of contracting dollars. Whether a contract is worth a thousand or a million dollars, the need to award it only to an eligible business remains equally important.
Additionally, in order to keep contract competition fair, we suggest owners of businesses that previously participated in the program and now exceed the $15 million threshold not be allowed to submit other businesses they own to the program. This would be unfair competition and contribute to the imbalanced distribution of contracts.
As stated throughout this response, most of the newly proposed rule changes to the SB Certification Program are fitting and timely. Although they are demanding and will require more work, time and manpower, these regulations will contribute to the programs efficiency and will certify that only eligible companies participate in the competition for contracts.
However, some of the regulations, like the threshold increase and 3-5 year eligibility period, contribute to the potential harm of small businesses and the program itself. As an advocate for and supporter of small businesses, NAWRB submits these comments for your consideration.
NAWRB Founder and CEO