News | Dec. 9, 2020

Small business support remains strong in 2020

By Jake Joy DLA Disposition Services Public Affairs

Engagement with small businesses remained a bright spot for the contracting arm of the Defense Logistics Agency Disposition Services throughout 2020.

The command aimed to award at least 54% of its service and hazardous waste removal contracts to small businesses in 2020. It easily met that mark, with over 78% of overall contracts going to small firms.

“As a whole, the directorate has done great work this year,” said Contract Oversight and Support Division Chief Roger Lonoza. He said recent regulatory changes placed new limits on contractors’ ability to subcontract portions of their work and still be considered for special categories. The change made it a bit more of a challenge for an agency like DLA to set contracts aside for categories like Service-Disabled Veteran-Owned, Women-Owned, and Small Disadvantaged Businesses. 

“It took a lot of time and effort to find new firms,” Lonoza said. “Our contracting professionals showed dedication that went above and beyond to still end up where we ended up.”

Lonoza said that any time the organization produces a new requirement, its contracting division undertakes extensive market research efforts to determine the breadth of participation in the targeted industry. Leaders will decide to restrict competition among targeted categories only when “market research guides us and gives us a firm justification” for setting aside those contracts.

Because of those intense and ongoing efforts, and despite the challenge of new regulations, this year’s special category metrics for small business engagement are just as impressive as the command’s overall mark.

The 2020 award goal for Small Disadvantaged Businesses was 5%. More than 27% of the contracts DLA Disposition Services awarded actually went to SDBs. The overall goal for Service-Disabled Veteran-Owned contract awards was 3%; the command achieved 5.5%. DLA wanted its sub-commands to award at least 5% of their contracts to Women-Owned Small Businesses. The DLA Disposition Services contracting staff blew past that goalpost by awarding more than a third of the command’s contracts – 35.5% overall – to women-owned entities.

The strong showing punctuates a historic four-year run where the contract goals have either all been met, as in the past two years, or come tantalizingly close. This year, the goal for awarding contracts to Historically Underutilized Business Zone (HUBZone) businesses was missed by .84%.

Barrels of fluids sit in a parking lot.
Army motorpool oils and fluids await disposal by DLA Disposition Services-contracted personnel.
Barrels of fluids sit in a parking lot.
Army motorpool oils and fluids await disposal by DLA Disposition Services-contracted personnel.
Photo By: DLA photo
VIRIN: 200801-D-D0441-2345

The HUBZone program is regularly the most difficult special category for federal agencies to meet in their small business contracting goals. The Small Business Administration encourages federal agencies to contract with firms located in specific geographic areas – either rural or urban – that are economically challenged and draw at least 40% of their employees from the same region. Some typical HUBZone areas include Qualified Indian Reservations, base closure areas or disaster areas. 

Lonoza said there is a silver lining to the just-missed HUBZone goal this year. The mark would have been met for a record third straight year were it not for a temporary labor contract that reached its conclusion. He said structural changes DLA Disposition Services made among its own staffing levels made the contract obsolete.

“It was absolutely for the best thing for our organization,” Lonoza said.

Another highlight was the command’s competition level for contracts. Against a goal of 86%, DLA Disposition Services reached a 95.6% level for promoting competition for its contracts, an effort that Contracting Director Tracy Hart called “a homerun.”

Lonoza explained that the competition metric represents circumstances where the organization puts out contract solicitations to the public, as opposed to awarding sole-source business to a single entity. He said that competition generally reduces cost and increases the quality of services received.

An additional success, according to Hart, was the $8.8 million in contract obligations that went through the U.S. Ability One Commission in 2020. Those contracts represented 8.3% of the command’s overall contract obligations of about $106 million.

Ability One is a federal agency that primarily employs the blind and those with significant disabilities. As the required source for a variety of manufactured items, other federal agencies must first look to them to fill internal requirements against the Ability One inventory list before they can look elsewhere.

“It’s a hugely positive thing,” Lonoza said.

According to the U.S. Small Business Administration, federal government contracts with small businesses are worth more than $100 billion annually. They are classified based on their average number of employees or their average annual receipts. Allowable business size is based on industry type.