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By Elizabeth Sullivan The Senate Small Business Committee had a never-before-seen visitor yesterday: Treasury Secretary Steven Mnuchin. He joined Small Business Administration (SBA) Administrator Jovita Carranza in testifying before the Committee on the small business programs included in the CARES Act. The hearing revealed a few interesting pieces of information about how the programs have been run, as well as what the future may hold. Here were our team’s top takeaways. 1. Small businesses need additional relief. While we have heard this feedback from small business owners countless times over the past month – we weren’t quite sure Congress got the message. Despite the rule changes made in H.R. 7010, many businesses that received Paycheck Protection Program (PPP) dollars are about to reach the end of their forgiveness portion. Meaning, although there was an extension of the forgiveness timeline to 24 weeks, many businesses planned for the 8-weeks and are about to/have reached the end of their funds. Therefore, another round of layoffs is to be expected this month, as many do not have the cashflow to keep their employees on the payroll. This issue was echoed by Senators on both sides of the aisle during the hearing and even the Treasury Secretary said that yes, there was going to need to be some type of additional support. When asked by Senator Kennedy (R-LA) if relief for investors such as capital gains tax changes were on the table, the Treasury Secretary gave a lukewarm response and echoed the need to focus on getting people back to work. When further asked if he were “king for a day” what he would do moving forward, Mnuchin said, “I definitely think we are going to need another bipartisan legislation to put more money into the economy.” He suggested three things could be on the table: another round of direct payments to individuals, fixing unemployment, and more money to encourage businesses to re-hire, with targeted efforts to industries that are most impacted by COVID-19 such as hospitality and tourism. 2. Targeted relief is needed for minority-owned and women-owned businesses. Senator Maria Cantwell (D-WA) and Chair Marco Rubio (R-FL) were among many to call for targeted relief to underserved communities who traditionally struggle to access capital and resources. Senator Cantwell sent a letter to both witnesses, pushing for prioritization of these communities and smaller (10 or fewer employees) businesses in existing relief loans and any future COVID-19-related assistance. Senior Committee Democrats Ranking Member Cardin (MD), Senator Coons (DE) and Senator Shaheen (NH) announced their intention to introduce the Prioritized Paycheck Protection Program (P4) Act. The bill authorizes new lending under the PPP to small businesses with 100 employees or less, including sole proprietorships and the self-employed. In order to be eligible, businesses must have already depleted an initial PPP loan or be on pace to exhaust the funding and must demonstrate a revenue loss of 50% or more due to the COVID-19 pandemic. This is a step in the right direction. 3. SBA’s abrupt changes to the EIDL program were not random. SBA Administrator Carranza revealed the math behind the $1,000 per employee cap for Economic Injury Disaster Loan (EIDL) advances and $150,000 loan cap for EIDL loans. Based on the number of applications, SBA calculated that in order to lend to all applicants, these limits were necessary. Ranking Member Cardin (D-MD) and others pushed her to explain why she didn’t tell Congress more money was needed to be appropriated. She said in the hearing that all 5.4 million applications will be in the EIDL loan portal by next week. For context, a loan officer in the EIDL program typically processed 3-5 loans a day and now handles 50+ loans a day. “Into the portal” doesn’t necessarily mean all the loans will be approved by next week, but they will be out of the EIDL purgatory and processing will begin. Stay tuned. 4. Changing PPP rules to allow small business owners with criminal records to apply for loans could be coming soon. Current rules on the PPP program from the Treasury Department prohibit business owners with felony convictions or who are currently on parole/probation from receiving PPP loans. In his questioning, Senator Booker (D-NJ) asked if the Secretary would be open to changing the program’s rules. The Senator highlighted his legislation, which has bipartisan support and will remove the ban on individuals with non-financial fraud felony convictions. The Treasury Secretary said rules scaling back the criminal conviction from the past five years to the past three years were going to be published shortly. However, Secretary Mnuchin also indicated that if there was bipartisan consensus, he would open to the change proposed by Senator Booker and others. All of the Senators gave accolades to the agency leaders and their staffs for implementing these unprecedented small business loan programs. They pushed for more timely responses from the SBA to the Committee. So, the question that remains – will there be further action: what will it look like and when? Committee Members expressed a sense of urgency for additional small business relief. Our suggestion – make this bill about relief and recovery. Put policy changes in place that will also have a lasting effect on the economy. For example, changes to sole source rules for individually-owned 8(a), WOSBs, SDVOSBs and HUBZone companies that have been passed in the House and were included in the draft Senate SBA reauthorization bill would get help contracts get into the hands of small businesses during recovery and into the future. Additionally, allowing equity investment in 8(a) and WOSB firms could give them a boost of capital to remain sustainable. The clock is ticking, and small businesses need these bipartisan solutions as soon as possible.

By Ann Sullivan WIPP Works in Washington June 2020 The newness of COVID-19 has worn off and, although little attention has been paid to other issues Congress must address, they haven’t gone away. Although congressional staff and Members are working remotely, business is still being conducted. I would be remiss if I did not mention the potential for social justice reform, due to protests over the weekend. However, there has been no federal action as of this writing. Here’s what to expect: Funding the Government for FY21.The government calendar for funding has not changed. The fiscal year still ends on September 30 and Congress must pass appropriations legislation to continue to fund the government. Although the schedule has been pushed back due to the pandemic, House leadership says it plans to pass all of its appropriations bills by August. As usual, the Senate schedule is less ambitious, but the Senate Appropriations Committee plans to start deliberations in late June. Authorizing Defense Department Programs. The National Defense Authorization Act (NDAA) guides every defense program and sets priorities for the following fiscal year. It doesn’t fund the programs—it leaves that to the appropriators but authorizes and recommends the funding levels. Often Included in this bill are changes to small business contracting programs that are deemed important to the defense supplier base. The Senate Armed Services Committee expects to have completed its bill by the end of June/early July. The House Armed Services Committee schedule follows roughly the same timeline. Infrastructure Funding. In addition to roads, trains and ships, water infrastructure is also on the list to fund and authorize. Although it was initially thought to be a massive recovery initiative, it now appears the Congress may tackle this piece by piece. Either way, a number of the programs expire unless Congress takes action by September 30. Tax Extenders. Tax deductions and credits have expiration dates. Unless Congress extends them, they expire. Action is necessary to keep them intact and the list of expiring tax cuts since 2018 is pretty long. The Joint Tax Committee publishes the list here. Although COVID-19 related actions will continue to be front and center for the Congress, it cannot neglect its other duties. Let’s not forget that there is an election coming in November which includes the entire House of Representatives, 1/3 of the Senate and the Presidency. The Congress, adapting to the ban of large group gatherings, will spend a significant amount of time campaigning for the November elections. In the end, the government still needs to be funded, the need for a strong defense and services taxpayers expect from their government do not go away in a pandemic. Despite the public disheartening partisan rhetoric, the Congress will quietly work together to get things done.

By Elizabeth Sullivan While many segments of the economy are experiencing unprecedented loss, one sector of the economy, the federal government, is rapidly increasing its spending to combat the COVID-19 virus. Reported spending obligations for COVID-19 as of May 4 are about $8.5 billion and are expected to increase in the coming weeks (note: every time the numbers are updated, the previous link will reflect those updates). Here are a few of the numbers you should be aware of as a federal contractor. Agencies flowing the most dollars to small businesses are the Departments of Veterans Affairs (VA), Small Business Administration (SBA), Health and Human Services (HHS), Homeland Security (DHS) and Justice (DOJ). Veterans Affairs has awarded over $580 million, while HHS and SBA are tied for second with $417 million. For the Department of Justice – of the total dollars spent so far on coronavirus, 63.5% was awarded to small businesses. That is a little over $39 million of the total $62 million spent as of May 4, 2020. Dollars are also being awarded to women-owned small businesses (WOSBs). Across all agencies, since March, over $490 million has been awarded to WOSBs to assist with COVID-19 relief. Just for some context – this number has exceeded the total dollars awarded for WOSBs in FY2018, which was $473.1 million. So, in a matter of months, the dollars awarded have exceeded an entire fiscal year’s previous spend. This increase has been across small business programs – service-disabled veteran-owned small businesses (SDVOSBs) also have been awarded $493 million and HUBZone companies $90 million. A few examples of how what federal agencies are pursuing COVID-19 assistance include HHS refocusing its research contracts to seek assistance with COVID-19 and the Army is seeking new technology to help prevent, treat and manage the coronavirus.The SBA is on a hiring spree given their new responsibility to process $620 billion in loans to small businesses. So, how can you take advantage of this new spending? In addition to working with your existing federal customers, there are two other ways to showcase your capabilities to assist with COVID-19. The first is to sign up on the Disaster Response Registry in SAM, where you can submit your COVID-19 related capability statements and product offerings. This registry is used agency-wide. The second is to submit inquiries to the DHS Procurement Action Innovative Response (PAIR) Team. DHS created this in response to the surge of incoming industry offers of help and innovative ideas to support the fight against COVID-19. By the time you read this, more dollars will have been spent. Make sure you are taking advantage of these opportunities now.

By Ann Sullivan, WIPP Chief Advocate WIPP Works in Washington May 2020 COVID-19 relief took the form of four bills passed by Congress in the last two months. All of this is centered around relief for workers and employers hit by COVID-19, including small business loan and forgiveness programs, aid to hospitals and money for test deployment, employer required sick leave, and direct payments to Americans. A staggering $2 trillion was spent in these four bills and the Federal Reserve Bank spent an estimated additional $4 trillion on relief. We learned the demand from small businesses for the Paycheck Protection Program (PPP) and the Economic Injury Disaster loans (EIDL) far exceeded available funding. Everyone is curious about the direction of future aid for obvious reasons. What’s going to be in the next bill or is there going to be a next bill? My best guess is that the next Congressional bill will be a hybrid of relief and recovery. Much is left to do on the relief side and refinement of the programs put in place by previous legislation. When programs are drafted in a hurry, unexpected issues arise that need to be addressed. Evidence is the number of guidance documents issued by the Small Business Administration (SBA) and the Treasury/IRS surrounding small business loan programs. For federal contractors, implementation of Section 3610 relief has generated extensive documentation. The next bill will most certainly contain changes to existing programs. Is Congress going to deliver additional relief by providing additional funding for the PPP or EIDL programs? Senate Majority Leader Mitch McConnell (R-KY) suggested that Congress slow down future relief, saying "until we can begin to open up the economy, we can’t spend enough money to solve the problem." Relief to state and localities has yet to materialize but is widely considered to be a major part of any future bill. As Governors start loosening restrictions on stay-at-home orders and industry starts to slowly reopen, the focus is slowly shifting toward economic recovery. Congressional leaders are looking at successful programs deployed during the Great Recession (2007-2009) that could be helpful during this pandemic. Another much talked about idea is a stimulus, such as a massive infrastructure program. This would not only cover shovel ready construction projects, but broadband, telecommunications and technology infrastructure. Also bubbling up are tax deductions and credits for businesses who will need relief for many months to come. Businesses are asking for special liability restrictions due to COVID-19 in order to feel comfortable bringing employees back to work and opening their doors to consumers. The Senate has signaled this as a priority, but their House counterparts are not so sure. Lastly, the federal marketplace offers a tremendous opportunity for small business recovery, but the rules need to change to allow more dollars to flow to these businesses. The “What’s Next” list is overwhelming because the need is so great. Our advocacy team is dedicated to ensuring women business owners have a voice in all of these deliberations. That’s the mission of WIPP – we intend on keeping it that way.

By Elizabeth Sullivan **UPDATE (4/17/20): OMB has released guidance on Section 3610 implementation that can be found here. The CAAC has issued a class deviation here. Kim Herrington, Acting Principal Director, Defense Pricing and Contracting at the Department of Defense has issued a class deviation for implementation of Section 3610 of the CARES Act. Class deviations can be issued when necessary to allow agencies to deviate from the FAR and DFARS. To read the document, click here. The DoD's FAQ can be found here. This deviation allows contracting officers to use DFARS 231.205-79 (page 5 of the document) as a framework for implementation of Section 3610. As a reminder, Section 3610 of the CARES Act allows agencies to reimburse at the minimum applicable contract billing rates (not to exceed an average of 40 hours per week) any paid/sick leave a contractor provides to keep its employees or subcontractors in a ready state, including to protect the life and safety of Government and contractor personnel during the public health emergency declared for COVID–19 (January 31- September 30, 2020). Acknowledged in the letter, many DoD contractors are struggling to maintain a mission-ready workforce due to work site issues related to COVID-19. Therefore, the class deviation lays out the implementation of 3610 in DFARS 231.205-79. All contractors, especially small businesses, should pay attention to the following from the letter: Some contractors may receive compensation from other provisions of the CARES Act, or other COVID-19 relief scenarios, including tax credits, and contracting officers must avoid duplication of payments. For example, the Paycheck Protection Program (PPP)established in the CARES Act may provide, in some cases, a direct means for a small business to obtain relief. A small business contractor that is sheltering-in-place and unable to telework could use the PPP to pay its employees and then have the PPP loan forgiven, pursuant to the criteria established in the interim rule published by the Small Business Administration. In such a case, the small business should not seek reimbursement for the payment from DoD using the provisions of section 3610. (*Note: Contractors should consult their legal counsel - SBA has said that just because you have applied for PPP does not necessarily mean you can not seek relief from this provision) Contractors are responsible for supporting any claimed costs, including claimed leave costs for their employees, with appropriate documentation and for identifying credits that may reduce reimbursement under section 3610. Contracting officers are encouraged to work with contractors to understand how they are using or plan to use the COVID-19 relief provisions and encourage contractors to use existing contract terms or the relief provisions available to them in response to COVID-19. It is important that contracting officers secure representations from contractors regarding any other relief claimed or received stemming from COVID-19, including an affirmation that the contractor has not or will not pursue reimbursement for the same costs accounted for under their request, to support their requests for reimbursement under section 3610. When implementing section 3610, contracting officers shall consider the immediacy of the specific circumstances of the contractor involved and respond accordingly. ----- Additional information/guidance: FAQ from DoD Memo from the Office of the Director of National Intelligence (ODNI) Letter from U.S. Senator Mark Warner to OMB on implementation Letter from Ohio's congressional delegation to DoD on implementation

By Elizabeth Sullivan **Update: Check out the guidance/FAQs for both defense and civilian agencies on this provision here. The President has signed the third negotiated COVID-19 relief package into law. It includes an important provision for government contractors: Sec 3610. Federal Contractor Authority. Notwithstanding any other provision of law, and subject to the availability of appropriations, funds made available to an agency by this Act or any other Act may be used by such agency to modify the terms and conditions of a contract, or other agreement, without consideration, to reimburse at the minimum applicable contract billing rates not to exceed an average of 40 hours per week any paid leave, including sick leave, a contractor provides to keep its employees or subcontractors in a ready state, including to protect the life and safety of government and contractor personnel, but in no event beyond September 30, 2020. Such authority shall apply only to a contractor whose employees or subcontractors cannot perform work on a site that has been approved by the Federal government, including a federally-owned or leased facility or site, due to facility closures or other restrictions, and who cannot telework because their job duties cannot be performed remotely during the public health emergency declared on January 31, 2020 for COVID–19: Provided, That the maximum reimbursement authorized by this section shall be reduced by the amount of credit a contractor is allowed pursuant to division G of Public Law 116–127 and any applicable credits a contractor is allowed under this Act. A March 20 memo to the Defense Industrial Base (DIB) stated, “If you work in a critical infrastructure industry, as defined by the Department of Homeland Security, you have a special responsibility to maintain your normal work schedule,” which has caused massive issues for contractors. In order to stay in business, contractors have had no other choice other than to send their employees to work – sick or not. This doesn’t promote social distancing for millions of workers (the DIB employs almost 2.5 million) and puts an even larger population at risk. The above change solves this issue immediately by telling agencies to pay their contractors who cannot come to work until this pandemic is over.

By Elizabeth Sullivan Last Update: April 8, 2020 Multiple documents have been issued – and expect more in the coming days – with guidance for agencies and contractors on how to operate with the disruptions from COVID-19. GSA launched a site consolidating the governmentwide guidance: https://www.acquisition.gov/coronavirus. Additional guidance can also be found here: https://www.gsa.gov/policy-regulations/policy/acquisition-policy/acquisition-policy-library#ClassDeviations. Office of Management and Budget (OMB): Memorandum to the Heads of Executive Departments and Agencies on Managing Federal Contract Performance Issues Associated with the Novel Coronavirus (COVID-19) – Deputy Director for Management, Margaret Weichert Agencies should be flexible in providing extensions to performance dates if telework or other flexible work solutions, such as virtual work environments, are not possible, or if a contractor is unable to perform in a timely manner due to quarantining, social distancing, or other COVID-19 related interruptions Harnessing Technology to Support Mission Continuity – Deputy Director for Management, Margaret Weichert Administration directs that agencies utilize technology to the greatest extent practicable to support mission continuity Federal Agency Operational Alignment – Acting Director, Russell Vought Agencies should communicate with customers regarding delaying transactions that are not time-critical Additional OMB guidance Department of Defense (DoD): Section 3610 guidance and class deviation Managing Defense Contracts Impacts of the Novel Coronavirus Acknowledges Section 3610 of CARES Act, reiterates existing performance delay clauses and states future guidance will be issued "as soon as practicable" Class Deviation – Progress Payment Rates – Kim Herrington, Acting Principal Director for Defense Pricing and Contracting FAQ for implementation Pentagon will temporarily increase the percentages paid to contractors, known as periodic progress payments Increases the rate for contracts from 80% to 90% of incurred costs for large businesses For small businesses the rate will go from 90% to 95% Defense Industrial Base Essential Critical Infrastructure Workforce – Under Secretary for Defense for Acquisition and Sustainment, Ellen Lord If you work in a critical infrastructure industry, as defined by the Department of Homeland Security, you have a special responsibility to maintain your normal work schedule The Essential Critical Infrastructure Workforce for the DIB includes workers who support the essential products and services required to meet national security commitments to the Federal Government and the U.S. Military Contract Place of Performance – Kim Herrington, Acting Principal Director for Defense Pricing and Contracting DoD providing maximum telework flexibility for contractors Determining and Making Commercial Item Procurements to Respond to COVID-19 DoD SmartPay3 – Increases thresholds for micropurchase agreements to $20,000 for inside the U.S. and $30,000 outside the U.S. More DoD guidance can be found here Department of Homeland Security Letter to DHS contractors encouraging them to talk to their contracting officers if contract performance is impacted due to COVID-19 Letter to DHS contractors on contract employees working in DHS facilities Guidance on the essential critical infrastructure workforce Letter to FEMA contractors regarding performance issues or delays due to COVID-19 General Services Administration (GSA): Class Deviation from the FAR – Provide for accelerated payments to small businesses and small business subcontractors Accelerated payments to GSA small business contractors and subcontractors Policy Guidance for GSA Essential Critical Infrastructure with FAQ FAR & GSAR Class Deviation – Debarring Official Notification to Contractors Disaster Response Registry – Contractors can register in SAM with COVID-19 related capability statements and product offerings Small Business Administration (SBA): FAQ for Small Business Contractors – Office of Government Contracting Addresses potential performance interruptions, excusable delays and subcontractors Extension in filing semi-annual Individual Subcontracting Reports (ISR) Additional Agencies: Navy Intent and Direction Withholds and Retentions During COVID-19 – Navy DIB guidance Office of Personnel Management (OPM) – Five memos around agency operations Additional Office of Personnel Management guidance Environmental Protection Agency (EPA) FAQ for small business federal contractors USAID guidance for contractors on allowable costs around COVID-19 NASA letter to contractors – More information can also be found here: https://nasapeople.nasa.gov/coronavirus/ DLA Information for Suppliers – Contractors can report any issues related to COVID-1 Additional Resources: PilieroMazza did a webinar around COVID-19 impact for employers, and specifically federal contractors here. They also did a blog on additional agency guidance here. Guidance for grant recipients from Crowell & Moring

By Ann Sullivan (Update 4/26/20: For more information, check out the DOL FAQ on these provisions here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions) Legislation drafted in a hurry, like the Families First Coronavirus Response Act negotiated by Speaker Nancy Pelosi and Secretary of the Treasury Steven Mnuchin, can be confusing. We are concentrating only on the employer/employee provisions in this comprehensive coronavirus response package. The President signed this bill into law on March 18. There are two different employer requirements: emergency sick leave and emergency family leave. Let’s talk about sick leave first. Every employer under 500 employees is required to offer two weeks of paid sick leave to employees who are sick from the coronavirus, taking care of someone who is sick with the virus or are providing childcare due to cancelled school/daycare – without fear of losing their jobs. Full time employees who are sick are allotted 80 hours of sick leave and part time employees/hourly workers are given the typical hours worked in a two-week period. Employers are required to pay employees their normal wages or the minimum wage at the federal/state/local level, whichever is the higher. Employees who are taking care of others are entitled to two-thirds of their regular earnings. As I read the current bill, these two weeks are in addition to an employer’s existing sick leave policy. The bill allows the Secretary of Labor to issue regulations exempting businesses with fewer than 50 employees from the paid leave requirement if it would jeopardize the viability of the business. With respect to emergency family leave, which is an expansion of the Family and Medical Leave Act (FMLA), the bill expands FMLA availability to employers under 50 employees. As context, the current law requires 12 weeks of FMLA for employees of companies above 50 employees. In order to make FMLA applicable to dealing with the coronavirus, the bill expands the definition of who is eligible for FMLA by adding employees who are unable to work because they are providing childcare due to closed schools/daycare centers. This change is effective through December 31, 2020. Requirements for employers include paying employees two-thirds pay for a little more than 10 weeks. The first 10 days of the 12-week period do not need to be paid. Employers with less than 25 employees would be exempt from requirements to restore an employee's original position if it no longer exists due to changes in either economic conditions or a change in operations as a result of this public health emergency. The Labor Secretary is allowed to issue similar regulations as the family leave exemptions regarding businesses with fewer than 50 employees. In fact, DOL is looking for feedback from employers on compliance for these new rules through March 29. So, how will this be paid for? Employers offering this emergency sick leave and family leave will be able to get 100% payroll tax credit for these additional costs on a quarterly basis. Employers may deduct up to $511 per day for sick employees or $200 per day for employees who are taking care of others. The tax credit for family leave is up to $200 per day, not to exceed $10,000. For the self-employed, these credits will be applied against the self-employment tax. ---------------------------------------------------------------------------------- Employer Obligations in H.R. 6201: Families First Coronavirus Response Act Emergency Paid Sick Leave: Requires private employers with fewer than 500 employees and all public employers to provide 80 hours of paid leave for full-time employees and part time employees/hourly workers are given the typical hours worked in a two-week period without fear of losing their job. Reasons for this leave can be: Comply with a federal, state, or local quarantine or isolation order. Self-quarantine per a health-care provider’s advice. Obtain a medical diagnosis for coronavirus. Care for an individual who is in quarantine or for a child whose school or day care has closed due to coronavirus. Bill caps per employee costs are $5,110 for an employee who is taking the leave for their own illness or $2,000 for employees caring for another individual or child. Leave mandate sunsets on December 31, 2020 and commences 15 days after the bill is signed into law. Allows the Secretary of Labor to issue regulations exempting businesses with fewer than 50 employees from the paid leave requirement if it would jeopardize the viability of the business. An employer cannot require a worker to use any other available paid leave before using the sick time or require a worker to find a replacement to cover their hours. Emergency Paid Family Leave: Requires all employers with fewer than 500 employees to provide to up to 12-weeks of job-protected leave under FMLA for employees who are unable to work or telework because they have to care for a child younger than 18 whose school or day care has closed because of the coronavirus. First 10 days of leave could be unpaid, though a worker could choose to use accrued vacation days, personal leave, or other available paid leave for unpaid time off. Following the first 10 days, workers would receive a benefit from their employers that will be at least two-thirds of their normal pay rate. Per employee cap on costs for the leave are set at $200 per day or $10,000 total. Leave mandate sunsets on December 31, 2020 and commences 15 days after the bill is signed into law. Employers with less than 25 employees would be exempt from requirements to restore an employee's original position if it no longer exists due to changes in either economic conditions or a change in operations as a result of this public health emergency. Allows the Secretary of Labor to issue regulations exempting businesses with fewer than 50 employees from the paid leave requirement if it would jeopardize the viability of the business. Employer Tax Credits: Employers offering this emergency sick leave and family leave will be able to get 100% payroll tax credit for these additional costs on a quarterly basis. Emergency sick leave credit: For each employee the credit would be for wages of as much as $511 per day while the employee is receiving paid sick leave because they are quarantined, or $200 if they are caring for someone else who is quarantined or their child’s school is closed. Emergency family leave credit: As much as $200 per day while the employee is receiving paid leave, or a total of $10,000. The credit would be in effect for wages through the end of 2020. For self-employed, there is a similar credit applied against the self-employment tax.

WIPP Works in Washington, March 2020 By Elizabeth Sullivan, WIPP's Advocacy Team If you need a quick refresher on CMMC before reading this, you can find it here and here. The final model for the Department of Defense’s (DoD) Cybersecurity Maturity Model Certification (CMMC) came out earlier this year. So, what’s next for businesses? Let’s talk certification. Now that version 1.0 of CMMC was released – the final version– DoD is moving full steam ahead. The “accreditation body” has been formed, which is an independent, non-profit group that is responsible for developing the training and assessment standards for the certification. The next step in the certification journey for DoD is forming a Memoranda of Understanding (MOU) with the accreditation body, which will outline the roles and responsibilities of each of the parties. Finally, “accreditors” – of which there are none currently – will be responsible for evaluating businesses and assigning them a CMMC certification level. If all of this third-party stuff leaves you scratching your head, just know that DoD is outsourcing the accreditation of over 300,000 contractors with plans for substantial oversight. Substantial questions remain for contractors. One of the biggest is the timing of the certification rollout. The Department has said that they will issue 10 “pathfinder” solicitations that require various CMMC levels, including a few that will require level 4 or 5 certifications. Since these will be substantial contracts, if you are a small business tapped to subcontract on one of these – when will you get certified? Will there be some type of cue, where the biggest companies go first? Or will it be ranked by the amount of anticipated work? This remains to be determined. Let’s talk levels. While the CMMC levels have been refined throughout the DoD’s drafting process, it is important to know that there are five levels. Any contractor, regardless of the type of work they do that wants to do business with DoD will need at least a level one. Level one is the most basic cyber hygiene, which has some noteworthy differences from NIST 800-171. The Defense Department has said that most small businesses only need a level one. But I wouldn’t take that assessment at face value. It is important for small/midsize companies to determine the appropriate level they want to prepare for based on the work they do, or plan to do, for the DoD. For example, if your company handles any Controlled Unclassified Information (CUI) you will need at least a level three. By the way, these levels will also apply to subcontracts. Which brings me into the next section of this article – unknowns. Let's talk unknowns. I was recently on a panel at the Women Leaders in Defense & Aerospace Law & Compliance Conference, where I shared the stage with the other two sides of the CMMC equation – a lawyer and prime. One of the things that I learned is that concerns span all business sizes—small businesses aren’t the only ones with questions. First and foremost is how the DoD will handle CMMC certification levels for subcontracted work. There has been a lot of conflicting information about this component flying around, but the latest and greatest (as of the time this is published) is that the program managers for both the DoD and prime contractor will work together to determine the appropriate CMMC levels for the components of subcontracted work. Another unknown is how a company can dispute an assigned level by an accreditor. While the accreditation body will have some sort of mechanism to address this, DoD’s involvement in this process is unclear. This is an important question because certification levels will be assigned for a three-year period. Finally – and this is a big one – the total cost for contractors remains to be seen. DoD has not yet provided any specific information on the cost of obtaining the certification. Some good news is that something that is known (and has been for a while) is that DoD will not seek levels retroactively – meaning that no current contracts will be modified to require a certain certification level. All of this is to say, stay tuned. Moral of the story is – as a federal contractor, it is time to pay attention if you aren’t already. WIPP recently offered a webinar on this issue, and we intend to continue to provide the most updated education on this certification roll-out. Although CMMC is only for the DoD supply chain, in the future it could impact civilian agencies as well. So, get ready – it’s moving full steam ahead, with or without you.

By Elizabeth Sullivan It’s not new that parts of the Small Business Administration (SBA) regulations and the Federal Acquisition Regulation (FAR) have contradicted one another. Or, that the acquisition workforce does not follow new SBA regulations because they are not in the FAR. Today the FAR Council published a final rule implementing regulations such as governmentwide policy for partial set-asides and set-asides for small businesses under multiple-award contracts (MACs), among other things. Just to give a quick timeline –the SBA published a final rule with these changes in October 2, 2013 (78 FR 61114), and the FAR Council (DoD, GSA and NASA) published a proposed rule to implement the SBA changes on December 5, 2016 (81 FR 88072). So, it takes an average of three years for each step of the process. This needlessly long process further highlights the need for the SBA to have a seat on the FAR Council, as proposed in the Senate Small Business Committee SBA Reauthorization draft. Here are some of the key changes made by the rule, which is effective March 30, 2020: NAICS code(s) must be assigned to all solicitations, contracts, and task and delivery orders, and that the NAICS code assigned to a task or delivery order must be a NAICS code assigned to the multiple-award contract. FAR 19.301-2 is revised to clarify that, for multiple-award contracts with more than one NAICS code assigned, a contractor must rerepresent its size status for each of those NAICS codes. FAR 19.301-1 is revised to clarify that, for orders under basic ordering agreements and blanket purchase agreements (BPAs), offerors must be a small business at the time of award of the order and that a HUBZone small business is not required to represent twice for an award under the HUBZone Program. A HUBZone small business is required to represent at the time of its initial offer and be a HUBZone small business at time of award. Clarifies that the limitations on subcontracting and the nonmanufacturer rule apply to orders issued directly to one small business under a multiple-award contract with reserves. Clarifies the limitations on subcontracting compliance period for orders issued directly, under multiple-award contracts with reserves, to small businesses who qualify for any of the socioeconomic programs. FAR 19.507 is revised to apply to any multiple-award contract under which orders will be set aside, regardless of whether the multiple-award contract contains a reserve. FAR subpart 19.7 is revised to provide guidance to contracting officers on how to apply the requirement for small business subcontracting plans to multiple-award contracts assigned multiple NAICS codes. With the requirement to assign multiple NAICS codes, it will be possible for a contractor to be both a small business and an other than small business for a single contract. FAR subpart 19.13 is revised to clarify that the HUBZone price evaluation preference shall not be used for the reserved portion of a solicitation for a multiple-award contract. The price evaluation preference shall be used in the portion of a solicitation for a multiple-award contract that is not reserved. In addition, the clause at 52.219-4 is revised to remove the proposed text that stated the HUBZone price evaluation preference did not apply to solicitations that have a reserve for HUBZone small businesses.

By Ann Sullivan You never know what you will learn if you just ask. I recently moderated a panel of successful women business owners/federal contractors at a WIPP ChallengeHER event in Washington, D.C. The panelists were: Rebecca Askew (CEO and General Counsel of Circuit Media), Anjali Ramakumaran (CEO of Ampcus Inc.), LaShonda Bracey (CEO & President of Health-Works and ASAP Training and Course Development) and Denita Conway (CEO & President of PROVEN Management, LLC) – all experienced federal contractors. Below are five points they raised that bear repeating. Hearing “no” is a challenge – not a deterrent. We discussed this in the context of finding capital to start/grow the federal business. These women heard “no” from banks, investors, friends and family. But they kept trying and pieced together the necessary capital to succeed. To succeed requires a single focus. The panel agreed that their laser beam focus played a big part in their success. They told stories of disappointments and complications with federal contracts, but their focus kept them on the road to success. It only takes one person to open a door so keep knocking. These panelists established relationships with buyers in a number of ways. Doors were opened by colleague referrals, connections though organizations, industry days and friends not necessarily by requesting meetings. These women did not prejudge whether a person may be able to help – they assumed everyone could help. Pay attention to the smallest details – paperwork can trip you up. They learned the hard way – dot every “i” and cross every “t” in RFP responses. Respond to everything the government requests. Anything less will result in disqualification. Expanding within an agency is an essential part of a growth strategy. This group is not content to rest with one agency contract. They see a contract as an opening to expand their presence in sub-agencies or a pathway to a Blanket Purchase Agreement (BPA).

By Elizabeth Sullivan It has been two weeks since New Year's Day and you’re not alone if you have you broken most or all of your New Year's resolutions. While we put our personal resolutions aside, when it comes to advocacy, our team has made some we are committed to keeping. 1. Untangle the web of new federal cybersecurity requirements for WOSBs. 2020 is shaping up to be the year of securing the federal supply chain. This may sound dry or mundane, but recent changes truly impact every federal contractor of every size. While we did a deeper dive last year, let me provide some context. Our work does not stop when a bill becomes a law. In fact, the devil is in the details, so providing input during the regulatory process is just as important as the passage of the law (a refresher on the regulatory process can be found here). In addition, remember that a proposed or new regulation is called a “rule.” Major agency actions – all regulatory – require our attention. · Cybersecurity Maturity Model Certification (CMMC) – The final version of this requirement should be published later this month. The CMMC is expected to designate maturity levels ranging from “Basic Cybersecurity Hygiene” to “Advanced.” While contractors will be required to be certified by an accrediting body, it has not yet been determined. This body is expected to enter into an MOU with the DoD sometime this month. The government has indicated that contractors will be reimbursed for the certification fee through their pricing on contracts to the federal government. However, the current cost is remains unclear. CMMC will eventually be required for anyone doing business with DoD – the certification levels will begin to be included in RFIs starting in June and RFPs sometime in the fall. One important point made by Katie Arrington, DoD’s Chief Information Security Officer for Acquisition and Sustainment, was to never post your CMMC level certification on your website, as hackers will then know the types of security you are employing and target accordingly. Although there are still some factors to be determined, this certification is moving full steam ahead – and compliance strategies will be an important exercise for every federal contractor in 2020. · Section 889: Prohibition on Certain Telecommunications and Video Surveillance Services or Equipment– Commonly referred to as “Section 889,” this rule seems like it would have nothing to do with small businesses or most contractors, however, it does. It broadly prohibits federal agencies from using telecommunications or surveillance equipment or services from six Chinese companies or their subsidiaries. Ann took a closer look at the rule here. In step two of implementation, a rule is expected to go into effect sometime this year that prohibits any government contractor from using any components or services from these companies. If you are renewing your SAM profile, you will notice a new question asking if you provide covered telecommunications equipment or services in the performance of any contract or subcontract. This action impacts the entire supply chain, covering all contracts. Additionally, WIPP members have aired their frustrations for years on the government’s security clearance processes, both in civilian agencies and at DoD. This “chicken and egg” issue continues to hamper WOSBs and other small contractors from reaching their full potential. We hear you and are working to create policy solutions on these issues. 2. Urge the Senate to pass the SBA Reauthorization bill. WIPP has been working closely with the Senate Committee on Small Business and Entrepreneurship to make necessary changes to programs benefitting entrepreneurs through the Small Business Administration (SBA). The Chairman’s draft contains fifteen changes that, if passed, will be game-changers for women business owners. This includes positive sole source changes for federal contractors and increasing the ability for WOSBs to access capital. Unfortunately, the Committee postponed action on a comprehensive reauthorization bill after failing to agree on proposed regulatory changes contained in the draft legislation. Despite this setback, you should still contact your Senators, urging action. We even have a letter you can easily download and send here. This bill has enormous implications for small and midsize businesses around the country – we’ll be keeping up the drumbeat. One detail to know about this effort is that while it is a new year, it is not a new Congress. The 116th Congress is in its second session, which means that bills introduced in 2019 are still active in 2020. 3. Celebrate and build upon our FY2020 NDAA wins. The National Defense Authorization Act (NDAA) is a must-pass bill by Congress – authorizing all of the DoD programs on an annual basis. The 2020 NDAA, passed in December 2019, contained three WIPP supported provisions that positively impact WOSBs. The first is the prompt payment for small business prime contractors and subsequently their subcontractors. WIPP has supported permanently establishing an accelerated payment date since the Office of Management and Budget (OMB) directive expired in 2017, and this provision establishes a goal of 15 days after proper invoice. The second is uncovering small business participation on multiple award contracts that are designated as best-in-class vehicles. As the spend through these vehicles increases, it is critical to have data on WOSB participation. Therefore, the provision requires the SBA to report the dollar amount of contracts awarded to small businesses. WIPP’s third win was to strengthen accountability for subcontractors. The provision implements a new dispute process allowing small subcontractors to bring nonpayment issues to the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU), as well as strengthen the agency’s ability to collect and review data regarding prime contractors' achievement of their subcontracting plans. 4. Support Congressional women. As we all know, it is a Presidential election year. However, the entire House of Representatives and a third of the seats in the Senate are also up for grabs. Electing women to Congress is important, no matter your party affiliation. Currently, 127 women serve in the U.S. Congress – 26 in the Senate and 101 in the House. The women in the Senate have long been a model for avoiding legislative gridlock. They are often the negotiators who are willing to reach across the aisle to find common ground on major pieces of legislation. Women Members are also the cosponsors on legislation important to women entrepreneurs. For example, our bill to increase investment in women-owned federal contractors, The Women and Minority Equity Investment Act of 2019, is championed in the Senate by Senator Maria Cantwell (D-WA) with Chair Marco Rubio (R-FL) and in the House by Representative Robin Kelly (D-IL). It is also important to note that the Senate just confirmed a new Administrator to the Small Business Administration, current U.S. Treasurer Jovita Carranza. We are thrilled to work with her again, as she was formerly an SBA Deputy Administrator and championed issues important to women-owned businesses during her tenure. No doubt, other policy priorities will arise as the year moves forward. Although there are many political pressures that threaten to derail our efforts, we remain committed to the bipartisan mission of empowering women entrepreneurs. From the policy team for Women Impacting Public Policy, Happy New Year. Let’s get to work.