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Let's disregard nebraska's story about the statements of the "SBA rep." We don't know anything about them -- background or context.

We know that there are issues in the law about the distinction between employees and independent contractors and we know that they can play out in government contracting. We also know that there is no published policy about the issue with respect to subcontracting plans and subcontracting limitations and that the case law is scant.

As intelligent pros we have to take matters into our own hands, but we have to be rational and rhetorical about it.

Contract compliance in this case is going to be a matter of statutory and regulatory interpretation, and I wouldn't give a nickel for what the average CO would say or determine. Most COs are not knowledgeable in these matters, and if they give bad advice or make a determination inconsistent with what the Government policymakers and lawyers think the Government will repudiate CO statements and decisions in a heartbeat.

In any case, I disagree that SBA is only an advisor, since the outcome of any controversy ultimately depends on the interpretation of SBA's regulations.

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For those that may not want to look up the FAR reference I provided in Post #25...

FAR 19.707 The Small Business Administration’s role in carrying out the program.

(a) Under the program, the SBA may—

(1) Assist both Government agencies and contractors in carrying out their responsibilities with regard to subcontracting plans;

(2) Review (within 5 working days) any solicitation that meets the dollar threshold in 19.702(a)(1) or (2) before the solicitation is issued;

(3) Review (within 5 working days) before execution any negotiated contractual document requiring a subcontracting plan, including the plan itself, and submit recommendations to the contracting officer, which shall be advisory in nature; and

(4) Evaluate compliance with subcontracting plans, either on a contract-by-contract basis, or, in the case of contractors having multiple contracts, on an aggregate basis.

( B) The SBA is not authorized to—

(1) Prescribe the extent to which any contractor or subcontractor shall subcontract,

(2) Specify concerns to which subcontracts will be awarded, or

(3) Exercise any authority regarding the administration of individual prime contracts or subcontracts

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As further indication of the subject matter of this thread, see the definition of "subcontract" in FAR 52.219-9, "Small Business Subcontracting Plan (JUL 2013)":

Subcontract means any agreement (other than one involving an employer-employee relationship) entered into by a Federal Government prime Contractor or subcontractor calling for supplies or services required for performance of the contract or subcontract.

Emphasis added. See also the slightly different definition in FAR 19.701.

Thus, any contractor who would assert that an individual is an "independent contractor" rather than an employee had better be able to state a rational basis for that assertion. I could find no guidance in FAR about what would constitute an employer-employee relationship in the context of the clause.

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The definition of subcontract in 52.219-9 is taken directly from 13 CFR 125.3. Thus, we come back to what the SBA rules mean because the SBA is the agency that is given responsibility for implementing the Small Business Act, which is where the requirement for a small business subcontracting plan is found.

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I am amazed at the amount of debate here considering that the original poster left an ambiguous post asking for clarification then has failed to clarify, despite numerous requests by those attempting to respond to his or her post. Nebraska, WHY DID THE SBA REP SAY THAT YOU CANT USE INDEPENDENT CONTRACTORS TO FULFILL YOUR SUBCONTRACT ING PLAN GOALS???

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Forget nebraska. I assume that the SBA rep did not think that the "individuals" were truly independent contractors. What other reason could he have had? I don't buy ji20874's They weren't businesses.

It was an interesting and fruitful topic.

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I never said they weren't businesses.

But I did raise the possibility of subcontracting not counting towards subcontracting sicio-economic goals because the independent contractor subcontractors were not organized as small business concerns (as that term is formally defined). I reject a notion that every "small" independent contractor must automatically be a small business concern and qualify to be be counted as such for a prime contractir's subcontracting socio-economic goal purposes.

For example, some independent contractors might be providing personal services, such as technical writing/editing, translation, and transcription services. Individuals providing personal services do not always organize themselves as small business concerns, and if not, would not qualify for credit under a prime contractor's subcontracting plan. Here, I am not relying on the FAR definition of personal services contracts, but a more general understanding of personal services -- for example, see thefreedictionary.com--

personal services n. in contract law, the talents of a person which are unusual, special or unique and cannot be performed exactly the same by another. These can include the talents of an artist, an actor, a writer, or professional services. The value of personal services is greater than general labor, so woodcarving is personal service and carpentry is not. Therefore, if an actor contracts to perform in a movie and fails to show, he/she will be liable for damages based on the difficulty to replace him. An artist who contracts to paint a picture cannot send a substitute, since he/she was retained for his/her unique ability and product.

In all of this discussion, none of knows exactly what the SBA person said what he or she said, or why -- the original poster hasn't told us -- others advised the original poster that the SBA person was completely wrong -- I entered the discussion to raise some questions that might be considered -- maybe the SBA person was completely wrong, and Vern asserts I'm completely wrong, but I'm not so sure of that. I hope the original poster, if he or she is still reading, has enough information to go back to the SBA person and have an intelligent conversation.

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I reject a notion that every "small" independent contractor must automatically be a small business concern and qualify to be be counted as such for a prime contractir's subcontracting socio-economic goal purposes. For example, some independent contractors might be providing personal services, such as technical writing/editing, translation, and transcription services. Individuals providing personal services do not always organize themselves as small business concerns, and if not, would not qualify for credit under a prime contractor's subcontracting plan. Here, I am not relying on the FAR definition of personal services contracts, but a more general understanding of personal services....

You don't know what you're talking about with respect to the above, and so you really should stop, but I know that you won't.

Now you are going to be angry with me for being frank, but I'm trying to do you a favor. If my frankness insults you, I apologize.

I won't say another word. You just go on writing, but you might want to first check thefreedictionary.com's definition of business, just to get a "more general understanding."

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From the SBA-hosted website discussion at http://www.sba.gov/community/discussion-boards/independent-contractor:

QUESTION: I just starting doing a little freelance writing online. They require a w-9 . I am uncomfortable giving my ss# over the internet even if it is a legitimate company. I thought I should get an EIN # to use as a layer of protection but it does appear that I qualify based on the irs website list. I am a independent contractor, but do not have a business. Any suggestions? (emphasis mine)

ANSWER: Make sure they are a legitimate company. They need your SSN so they report your earning to the IRS. If giving it over the internet is the issue, which should not be if done through https, then give them this information over the phone. If you are worried about your SSN being stored in their database, then start a sole proprietor business and get an EIN. (emphasis mine)

From wikipedia at http://en.wikipedia.org/wiki/Independent_contractor:

An independent contractor is a natural person, business, or corporation that provides goods or services to another entity under terms specified in a contract or within a verbal agreement.

Neither of the above are dispositive, but they support my argument that a person can be an independent contractor without organizing him- or herself as a small business concern as that term is formally defined.

I think I'm done, too.

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I really apologize for losing track of this thread guys...I truly appreciate your help and opinions on this matter. When I emailed my local SBA PCR I told him we had several independent contractors already in place (assuming they are properly classified...we have had some issues with classifications before, but that is not at issue here), and asked if my assumption that they could be counted in our goals was correct based on the definition of "business concerns" at 13 CFR 121.105. His response is below; and yes, he is always this short-winded:

"Actually, the answer is “no”. There is a difference between an independent contractor and small business. The small business would need to be registered as an “S” corporation or something. But they would need to figure that out. It is more than a SAM registration. Thanks."

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"Actually, the answer is “no”. There is a difference between an independent contractor and small business. The small business would need to be registered as an “S” corporation or something.

I know of no support for that statement in any regulation or decision of the SBA. When someone in the government tells you something like that, ask for a regulatory citation or reference to another authoritative source. For years I was an individual working as an "independent contractor", not registered as an "'S' corporation or something," and I was considered a small business concern.

Government people like to answer questions, but they can't always tell you where they got their answers. A perusal of Wifcon responses will prove the truth of that.

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In terms of a Sole Proprietorship being somehow fundamentally different than an individual, the IRS has stated that an EIN is not necessary for a sole proprietorship. An SP can exist without an EIN. My thoughts are that by the very definition of an SP, an individual need not take any steps to create this type of business (unless some states out there require some type of name or business registration I am unaware of.

Source: http://www.irs.gov/Help-&-Resources/Tools-&-FAQs/FAQs-for-Individuals/Frequently-Asked-Tax-Questions-&-Answers/Small-Business,-Self-Employed,-Other-Business/Form-SS-4-&-Employer-Identification-Number-(EIN)/Form-SS-4-&-Employer-Identification-Number-(EIN)-1

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In some states (or counties, or cities) you have to have a "license" in order to operate as a business in their jurisdiction. The license fee is nothing more than a tax and a way to ensure that you pay other taxes. It's not like they check you out or anything.

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Nebraska: Welcome back. I have to say that your SBA PCR is grossly misguided (that's the nicest way i could think of to say it). He/she obviously doesn't understand basic business types, rules, etc.

I go back to my original post #2. Whether these independent contractors are sole proprietors, LLCs, S-Corps, or C-Corps, they can get a D&B number, register in SAM, Complete Reps & Certs. In your case, they wouldn't even need to upload their documents into the WOSB repository since they are not proposing as a prime. Get them to provide you a copy of their reps & certs for the file. Now, assuming your independent contractor vs employee issues are taken care of, I don't see where the SBA would have a leg to stand on.

As a side note, I would suggest that they get a TIN/EIN, but "technically" a sole proprietor or single-member LLC does not HAVE to. Also, Vern's suggestion for your independent contractors to obtain an "occupational license" ("business license", "business tax receipt", different states/jurisdictions call them different things) is a good one. They are usually not very expensive. Make sure they don't list YOUR business address as their business address (this goes for D&B and SAM too).

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Does FAR 19.7 not place the burden of written self-certification on the small? It makes the written determination. It seems like it would be difficult for such a firm to compete but that would be a decision of the prime and it's needs.

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Getting back to the original question:

Does a WOSB have to submit docs to the repository or register in CCR for a prime to count her firm against its subcontract goals? I am not sure what the language below, from the SBA's website (https://www.sba.gov/sites/default/files/files/WOSB%20Compliance%20Guide_April2011.pdf), means:

I have already checked the box in CCR stating that I am women-owned. Do I have to check any other boxes?

Yes. There are actually three different types of WOSBs that can be represented in CCR. The first representation in CCR is a for a women-owned business, which is a business concern owned and controlled by women if at least 51 percent of the business concern is owned by one or more women or, in the case of any publicly owned business at least 51 percent of the stock of which is owned by one or more women, and the management and daily business operations of the business are controlled by one or more women. This does not mean that a business checking this box is eligible for a set-aside under SBA’s program as a WOSB or EDWOSB.

The next two are directly related to SBA’s WOSB Program; a WOSB or EDWOSB eligible for a set-aside under this program, which is 51% owned and controlled by women U.S. citizens. A WOSB or EDWOSB eligible for a set-aside under this program must make a certain representation in ORCA and submit documents to the WOSB Program Repository, but a women-owned business does not have to.

So, a WOSB or EDWOSB eligible for a set-aside under this program must also check the box in CCR showing that they are such.

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No. You just have to meet the definition of "woman-owned small business concern" at FAR 2.101. See FAR 19.703(a)(1). If you want to pursue WOSB or EDWOSB set-asides, then you have to submit documents to the WOSB Program Repository.

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