How to Build a Better Application for the State Trade and Export Promotion (STEP) Program

Hello and welcome to a presentation on how to build a better STEP Application for the Small Business administration fiscal year 2015 state trade and export promotion, or STEP program. I'm Gene Stuman, the Director of the STEP Program, and my team and I are thrilled to serve America's small businesses and our state government colleagues. This presentation is intended for the 56 eligible state government applicants for the STEP Program as authorized in the Small Business jobs Act of 2010 and as amended. Please ensure that you follow up your viewing of this presentation with reading the program announcement, which is posted on grants.gov I'd like to start by introducing my team, each of whom will have a speaking role today, and then I will set the stage for today's presentation. We will cover improvements to and important requirements of this year's Program Announcement, which we hope you will use to build a high quality application this year. Next slide please. In the order of speakers following me, I would like to introduce Kelly Wilcox, our Project Officer for for the 2015 STEP Award process Shaditra Robinson and Jewel Lindsey, our STEP Program Managers and Jim Parker, STEP Program Analyst. Today's agenda consists of Lessons Learned and a Way Forward the Basics for Year four the Year four Program Announcement highlights the Year four evaluation process and some pointers for success that touch on several critical topics. Even though all 56 eligible applicants have applied during at least one of the previous three rounds of funding, numerous revisions to this year's Program Announcement means that there's a lot for you to consider as you build a quality application for Year four. Let's get rolling. Next slide please. The Lessons Learned and the Way Forward Last year was my first award year process with step and I had assumed that for the third year applications would be complete, comprehensive and high quality. However, over 80% failed our threshold review, which caused us some anxiety and caused most applicants some high tempo actions to get their applications in sufficient shape to pass the threshold review. We've made improvements and adjustments to this year's process to help overcome this situation. In addition, I didn't anticipate the many different approaches applicants would take to describe their sub granting plan in last year's technical proposals. What we need to see and to evaluate are the policy parameters and the controls around how applicants intend to provide direct financial assistance to STEP eligible small business concerns, that is Specifically for covering the STEP client export expenses. This year we revised the term to Financial Assistance Plan rather than sub granting plan and we have explained more clearly what we are looking to evaluate. Some common state terms that we have seen for this direct financial assistance include imags, stipends, iMacs, AEG scholarships, subgrants, et cetera, et cetera. And the underlying reason we moved away from the term subgranting is that technically if a federal grantee has sub grantees, those sub grantees are also subject to the same reporting requirements as the grantee, such as the 425s, the 270s, the PPRs, et cetera. And I know that none of us want to go there with our small business clients. Early in this year's process we set several improvement objectives, most of which we have already accomplished to support the applicant's ability to deliver high quality applications. We have revamped the program announcement to clarify and improve guidance and by the way, we reduced the main chat by four pages. We built a new technical proposal template for the states to use and that's Attachment B. We developed a new applicant checklist to guide the assembly of the application package and that's now Attachment c. We've provided 50% more time for states to build a quality and competitive application by providing six weeks rather than just four weeks in the previous round. And we will record and are recording this web based presentation on the Year four award process for all eligible applicants to review. In addition, we are enhancing the merit based review process. We will use the threshold review to make go or no go decisions for a panel review of the applications. We have increased the export expertise of the objective Review committee panelists as a result of a stronger recruiting effort this year. We enhanced the scoring rubric to better guide the panelists scoring and we will incorporate best practices to ensure panel scoring objectivity. Next slide please. We are also raising the bar to ensure federal funds directly benefit the eligible small business concerns. The rationale supporting this direction includes the intent of Congress to do so ameliorates some of the concern within the Obama administration about the STEP program and financial exam results which revealed some unallowed use of funds and to prevent repeat of some reports of boondoggles using step funds that occurred in the early years. So we are doing two things. First, we are limiting the use of STEP funds to the statutory purposes per 2 CFR 200.208 and secondly, we've established a threshold requirement that 80% of the federal funds must directly benefit small businesses. So let's expand on these two points. We've been using an arch retarget metaphor to visualize this new emphasis. The entire target represents all the allowable uses of federal funds under the cost principles which are contained in two CFR section 200 and this is the new super or Omni circular that is now effective. QCFR 200.208 specifically allows limiting total project funds to the statutory purposes, which is the list of one through eight export activities in provision 1207 of the Jobs act. And by establishing a requirement that 80% of the federal award must directly benefit clients, provides a clear guide for applicants to develop proposals that will do just that. The bullseye represents the STEP clients and one concentric ring away from the bullseye represents services that awardees pay for that directly support clients becoming either a new exporter or helping them make an export sale. An easy example of an item on the first ring would be a contract for an interpreter to accompany STEP clients on sales visits with non English speaking foreign buyers. The remaining 20% of the federal award plus the state match is available to cover the salaries and fringe to run the STEP program or this can also be used to benefit the STEP client, as some of the state governments already do. Of the current 24 year three awardees, the average amount of the federal award that is directly benefiting the small business clients is above 85%. Over 2/3 of the current awardees are applying more than 85% to directly benefit. More than half are applying more than 95%. And there are seven year three awardees that apply 100% of their federal award to directly benefit clients. Another improvement we intend to accomplish is to deliver awards sooner this year to allow the awardees to move forward sooner with the internal state government coordination as well as the planning, not the incurring of any costs, but the planning for the execution of approved export activities when the performance period begins. Next slide please. So let's touch on the basics for fiscal year 2015. The award funding available is $17.4 million. We will conduct a competitive process, again very similar to last year, comprised of three phases. The first phase is our threshold review, which will result in a go or no go decision on whether the application moves to the Tier one phase. The second phase is the Tier one review where we have panelists who will evaluate their assigned applications, followed by multiple panel events to produce consensus scores for each application. And the third phase is when the STEP team will conduct the Tier 2 review and evaluation and then prepare the selected applicants for award processing. The number of awards for this year is up to 30. The two factors we considered to determine this number are the total award funds available and the team resources allocated to the STEP team to execute an effective program next year. Now let's shift to Kelly, who will touch on some of the highlights of the Year four Program announcement.

Thank you, Jean. Eligible applicants for STEP Awards are state agencies or other entities that that have been officially designated by a State Governor or equivalent thereof as the sole entity responsible for conducting the state trade and export activities. As you know, STEP Awards have a matching requirement this year. The high export volume states are Texas, California and Washington. For these states, the required match is calculated by multiplying the proposed Federal award amount by the number decimal.5384 as provided in the program announcement. All other states must multiply their proposed Federal award amount by decimal point 333333 as provided in the program announcement. For all Insular Area applicants, Guam, the Commonwealth of the Mariana Islands, American Samoa and the US Virgin Islands. SBA will waive up to 200,000 of the matching requirements, but if the Insular Area applicant is not an agency or instrumentality of the area's government, the full requirement applies. 50% of matching funds must be cash and not more than 50% in kind contribution Matching funds may not be derived from any other federal program and applicants may not use program income for the purpose of meeting their match requirements. Next slide, please Applications include many a cover letter, a technical proposal with related attachments, budget information, certifications, forms and assurances, and other additional attachments. The COVID letter must include several elements of information, including a summary overview of of no more than one paragraph for each of the most important proposed export activities and expected outcomes. We recommend that applicants use the checklist provided as Attachment C to make sure their application is complete before it is submitted. No extraneous material will be considered. Please only send what is required by the program announcement. All applications will be screened for applicant eligibility and adherence to the requirements of Section 4 and the program announcement only. Those applications which pass this screening will move forward in the competitive merit based evaluation process. Next slide, please the technical proposal must include the a description of the applicant's past international trade assistance experience and present capacity to facilitate export activities for eligible small business concerns a detailed description of each proposed milestone goal and supporting export activity. All projected outcomes should also be included in Attachments A and B. Attachment A contains the technical proposals, milestone goals and their data broken out by quarter. Attachment B is a template that we created this year to help you organize your proposal. However, you are still allowed to use your own format if you so choose, as long as you include all the required elements. The proposal also requires the applicant's financial assistance plan and organizational chart, a description of contractor and consultant services funded by the award, and a completed attachment A and now Shaditra will give you more information about Section 4.

During this year's application process. We expect submissions to come in completed with several key items. At this time, I will point out key components that will assist you with submitting an application that will meet the threshold review criteria. This process is conducted by the Step Team before the applications are reviewed by the panelists for consideration of an award. Cover Letter Please address your cover letter to Ms. Eileen Sanchez, Associate Administrator, Office of International Trade. Please keep in mind the COVID letter should not exceed 2 pages. Technical proposal the technical proposal should not exceed 18 pages. Please use double spaced text and 12 point font if required for your submission. Budget Information Please use The standard forms SF424SF424A SF424B Please print this form and sign Submit this form in a PDF version. Please fill out the A9 through A12 that has cumulative Federal and non Federal amounts required on the A11 budget detail worksheet for 12 month period non Construction Program. Please provide us with the Budget narrative and have this narrative providing detailed explanation of the activities that you will plan on conducting this year. Break down the names, dates and amounts associated with the event. Next slide please. The SF424A in this slide I would like to point out key elements to this form and how we expect the form to be presented. Section A Budget Summary Please place your amounts in the new or revised Budget section. Column E is the Federal section and column F is the Non Federal section. The total will appear once the two amounts are entered on the form. Section B Budget Categories you will see at the top of the columns Number one Tax Federal Number two has Non Federal and number three has in kind. If you have to use this section, please be sure to break out the Federal and non Federal amounts so we know how much is going to each Object Class category of the Budget section. As you can see here within the Federal column I have 175,000 for travel and 142 for the other section. The same will apply to the Non Federal column of the Object Class category as you can see here. Next slide please. Section C Column B Non Federal Resources Please place the non Federal amount here. Section D Forecasted Cash Needs when you use this Cost categories start in the first quarter and the total amounts will appear in the total for the first Year section. This section will assist you with the amount of funds that will be used throughout the quarters of the Step Year four program. Section E can be left blank. Next slide.

The A9 budget detail worksheet.

For 12 month budget period. Please use this form to list out your key personnel that will be paid with STEP funds and for those that will be used for matching funds.

Please follow the columns such as how.

Much the person will be paid, months that have been budgeted, and the most important is the percentage of time towards the program. All STEP Directors are required to be at 50% or more. Next slide please. In the past we would request for you to add the names of staff members that will assist with the STEP program, but if their name is not being used as match, still provide us with their names, titles and how much time they will dedicate to the program. This can be done as an attachment in Word, Excel or another a 10 form just distinguishing that this is for additional staff working with the STEP program.

Next slide.

As you can see here, this is just an example to show you how those additional key staff members that will contribute time to the STEP program can be placed.

Next slide.

This form that we will discuss here is cumulative. Please make sure you are using the correct form for this section. The far right column should have at the top Cumulative Federal and Non Federal Amounts required. If this is not used, the A9 through A12 is not correct here. I used the same amounts that were placed on the SF424A example, so whatever you put in the Object class category.

Please use those same numbers.

As you can see here, I broke them out and distinguished what each amount represented as such personnel services 75,000 and under the amount I have that it is non Federal. Please use the titles throughout this form for the amounts within the section. For example, if you have Federal and non Federal in the same class category, please identify them by pointing out the Federal amount and putting Federal underneath and the non Federal amount and putting non Federal beneath. This section is used for the indirect cost. If you have an Indirect cost rate agreement that you would like to use, please make sure you have submitted the most recent Federal Indirect Cost Rate Agreement. The Indirect Cost rate agreement cannot come from a state agency. We only accept current Federal indirect cost rate agreements.

Please keep in mind the budget narrative.

Providing a detailed explanation of the components of each cost element listed in the SF424 as well as on the A11 indicating for each cost component and how they will directly benefit ESV fees as applicable. This can be found on page 13 of the program announcement. And now I will turn program over to Dual employees.

This segment will provide you with an overview of the certifications, forms, assurances and additional attachments that you're required to submit as part of your STEP Grant Application package. I will highlight only the required forms and encapsulate key pointers to assist you with building a better application. All forms must be signed and dated by the authorized certifying official. Please be advised that you should read the entire program announcement carefully for more detailed instruction. I'd like to reiterate that it would also be helpful for you to use the STEP Program Application Checklist that can be found in Attachment C as a guide to assist you with making sure that you have included all the required elements in the application package. If an application is incomplete, it will be rejected and will not be evaluated or considered for funding. As noted in section IV.1.4 certifications, forms and assurances on page 13 of the program Announcement, each applicant must complete and submit the following standard forms. The SBA Form 1623 certification regarding debarment, Suspension and other responsibility matters are required. The SSL Disclosure of Lobbying Activities form must be completed in order to disclose lobbying activities. Please note that federal funds under this award may not be used for lobbying activities. If you do not have anything to Disclose In Blocks 10A through B, you only need to complete Blocks 1 through 9. The SF3882 ACH Vendor Miscellaneous Payment Enrollment form are used by the US Treasury Department to transmit payment data by electronic means to your financial institution. Failure to provide the requested information may delay or prevent the receipt of payment through the Automated Clearinghouse Payment System. Should you receive an award, you only need to complete the Payee Information and Financial Institution section on this form. It is imperative that you include the correct EIN number on this form that pertains to the applicable lead agency's accounting of STEP Fund. Because of problems that we have encountered in the past by some awardees, I implore you to ensure this form is kept up to date and current if there are any changes to your financial institution. If so, you must notify the STEP program office immediately. SF424B assurances for non Construction Program form must also be completed to certify that you adhere to all the applicable assurances outlined in this form. In section 4.1.5. On page 13 of the program Announcement, you'll find a list of additional attachments. Each applicant must attach copies of the following to its proposal as the Governor's letter designating the applicant as the State's sole entity responsible for conducting the State's trade and export activities. The letter must be addressed to Ms. Eileen Sanchez, the Associate Administrator in SBA's Office of International Trade. Resumes or position descriptions for unfilled positions for all key personnel providing services funded by the award. Resumes must include experience relevant to the proposed project and may not be more than two pages in length. Please note Resumes and position descriptions for board members, contractors and consultants do not need to be submitted unless they are also key personnel and paid with funds under the award. A list of Board of Director members also needs to be submitted if it's applicable. Submit a list of existing or anticipated contractual and consulting agreements directly supporting your proposed export activities. The list must include the following Number one the contract provider name Number two the manner in which the provider was or will be selected, either competitively or non competitively Number three A summary of support provided actual or estimated contract cost to support the proposed activity, as well as Number four identify the employee or official of the applicant's organization who will be responsible for overseeing those agreements and how they will be administered. If A contract is 25,000 and above, please include a copy of agreement as an attachment for approval by the SBA Step Program Office in advance. The contract should outline hourly charges, session costs, material cost, et cetera. If you, as the applicant are not proposing contract support for this award, include an attachment marked not applicable. Provide a list of contracts that you the applicant is proposing to charge against the project as a direct cost or to meet matching funds requirements that will be outside of the indirect cost rate agreement that is for example Facilities lease agreement. The list must include contract provider lease or name Summary of support provided actual or estimated contract cost. If there are no charges, include an attachment marked not applicable. Additional Attachments continued. The tax identification documentation must be issued by the Internal Revenue Service. Pledges of additional support for funding or third party in kind Resources. This includes providing detailed descriptions of any additional funding or third party in kind resources the applicant will devote to the project and copies of donation letters or checks from outside entities. A copy of your conflict of interest policy is required. Please see the program announcement for specific requirements. A cost policy statement must describe accounting policies and cost allocation methodology. Submit your most recent A133 audit report. However, if you are not subject to the requirements of the Single Audit act, then submit a copy of your most recently audited financial statement instead and the CPA opinion of this audit, such as unqualified, qualified, or adverse. Please note if the document is too large, please provide a website link and instruction on where to locate the audit. Additional Attachments Continued for proposals including indirect costs. Your current executed indirect cost rate agreement from the Cognizant Agency must be submitted a Chief Financial Officer certification or equivalent thereof is required. This certification must verify that the applicant has an established organizational infrastructure with an internal financial management system that meets OMB cost principles. The letter must be on letterhead, signed and dated. A drug free workplace agreement is required that certifies you'll provide a drug free workplace environment. A copy of Applicant's Data Collection Instrument, also known as dci, is required that is used to collect data from STEP clients on results of STEPPED activities that clearly indicate, at a minimum, the following Step Client's level of export experience, new to market or market expansion, actual export sales amount and projected sales amount within 12 to 18 months. In addition, indicate how often these data will be collected from STEP clients either in the DCI or the technical proposal. And last, a copy of the Applicant STEP Client Self Representation form must be submitted that demonstrates how clients are certified as an eligible Small Business Consenter and that concludes this segment of the presentation. I will now turn the presentation over to Kelly. Thanks Jewel. The applications will be evaluated based on their scores on six factors Organizational Experience and Capacity, Project Design, Collaboration and leveraging of resources, Project Management, Risk Assessment and past Performance, and measurement of outcomes, data Integrity and Application quality. You are familiar with most of these criteria, but we have made some changes because risk is a new element this year. Jim Parker is going to address it in a few minutes. Please note that the Risk Assessment and Past Performance section of the application is.

Worth 25 points, one quarter of all.

Available points for measurement of outcomes, Data Integrity and application quality. We will be evaluating your data collection process, including your method of data collection, the frequency of data collection, and the quality of the data itself, based on the Data Collection Instrument or dci, which.

Is the tool you use to record.

And report to sba, the number of.

Businesses participating in export activities and small business export sales.

We are assessing this process and the data integrity to determine if the data being reported is verifiable, which is to say that it can be confirmed if audited. Also, the entire application package will be evaluated on its comprehensiveness, completeness and overall quality. Now Jim will provide more information about the Risk and past performance factor.

Thank you, Kelly. I will talk about risk assessment and past performance as required by 2 CFR Part 200.205 for cooperative agreements, the SBA must have in place a framework for evaluating the risks posed by applicants before they receive an award. Based on information contained in the technical proposal, required attachments, and the accumulated performance data of previous STEP awards. Applicants will be evaluated on four factors. Those factors are Financial Management, implementation of recommendations from financial examinations, history of performance and Suspension and Debarment. I will review each of those four factors.

1.

Financial management and Structure we will want to see a discussion of your financial management structure, systems and internal controls. You need to include the staff members who will be responsible for for financial record keeping and reporting. This should include the staff members who will be responsible for the receipt and expenditure of award funds as well as those staff who will be addressing audit findings 2 Responses to Financial Examination Recommendations we will evaluate your implementation of recommendations received from an SBA financial examination of your STEP program. For those who have not had a previous STEP financial Examination, we will use an alternate method to assess this element.

3.

History of performance we will evaluate your prior performance with STEP awards. This will include the extent to which you your most recently completed award was utilized. We call this the Utilization Rate. Next, we will look at your return on investment achieved on the most recently completed STEP award. We call this the ROI and four Suspension and Debarment we will comply with Federal guidelines on suspension and debarment provided in 2 CFR part 180. As part of your application you must complete SBA Form 1623 certification regarding debarment, suspension and other responsibility matters. Next up is Jean Suman who will conclude our presentation.

So how do you build a better STEP application? Let's look at some pointers for success. You know much perspiration and I'd like to think a little inspiration went into crafting the program announcement for the fourth round of funding. It's still not perfect however. Please read the Program announcement and adhere to Section 4 requirements with the Section 5 evaluation criteria in mind. Look twice at the underlined statements in the program announcement. They are really important. Round to the nearest whole dollar each object class category in your proposed budget and help us ensure that we give you credit for directly benefiting STEP clients by providing detailed explanations in your budget narrative. We expect to see collaborative partnerships with SBA and SBA Resource partners such as the SBA District Offices. The USEACS to include OIT Trade Finance Specialists, the Small Business Development Centers as well as other trade related entities. The way we envision the project design portion of your technical proposal to flow is as follows. Describe in text a milestone and all supporting export activities followed by the matrices reflecting the required data. You should then repeat this flow for each milestone that you propose this year and Attachment B is pre formatted for your use. In accordance with this expected flow, use the following Step Client terms which were clarified based on input from Year three awardees new to export. These are STEP clients with no export experience or who are merely accidental or novice exporters. Market expansion are clients with export experience who can expand into a new country market and or expand into a new region or a new population target segment or a new product line within an existing market. Note that the overall application package will receive a quality score based upon how complete and comprehensive it is. Please don't send us additional items beyond what is required. There is plenty for us to review and base our scores on the requirements. Arrange your contents of the submission files in the order given in section 4. For example, when you PDF the forms, the certifications and assurances, and the additional attachments, they should follow the section 4 order because we require more attachments than grants.gov makes room for Please group the forms and the attachments in the section 4 groups to comprise your separate PDFs, and certainly speak with your Program Manager when you have questions, which will be the one who sent you the announcement email on the day that the program announcement was released to the public through grants.gov this is our first presentation for the entire applicant community on building a Better Step application this year. We hope you found it useful and we look forward to an exciting award process this year. Thank you all.