Hey, small businesses: Uncle Sam wants you!
Commerce, SBA want to help small businesses prosper in hard times
As Obama administration officials hope to show small businesses the way into the federal contracting marketplace, more industry days won’t get contracts into those companies’ hands, and no one can pretend they will, acquisition experts say.
In a governmentwide plan for more outreach to small firms, Commerce Department and Small Business Administration officials plan to take part in more than 200 industry events by mid-October. They want to promote contracting opportunities, including those available under the American Recovery and Reinvestment Act. SBA Administrator Karen Mills and Commerce Secretary Gary Locke also want to promote small-business contracting in remarks and discussions with minority, women and veteran business groups.
“Government contracts can play a key role in helping small businesses turn the corner in terms of expansion and job creation,” Mills said in a statement in August.
However, government officials and companies must come to the events with realistic expectations. No one walks out of an industry day with a contract.
Instead, industry days are “an overdose of education,” said John Moliere, an advocate for service-disabled veteran small-business owners and president of Standard Communications.
President Barack Obama said small and minority-owned businesses are important players in restoring the economy because they employ half of the nation’s private-sector workforce and continually create new jobs while introducing groundbreaking ideas into the marketplace.
“It is essential that we provide our nation’s small businesses with maximum practicable opportunity to participate in federal government contracting,” Obama said.
In fiscal 2008, the government as a whole spent $29.3 billion with small and disadvantaged businesses, an increase of nearly $5 billion from 2007, according to figures from SBA.
Yet many small businesses — particularly minority-owned firms — are intimidated by the arduous regulatory process to simply become eligible to get a government contract, said Scott Orbach, president of EZGSA, a consulting firm that helps companies get into federal contracting. Government officials need to demystify the process.
“They have to demonstrate that it’s not rocket science,” he said. At the same time, business owners need to recognize that executives who are no smarter than they are make lots of money in federal contracting.
After registering, companies need to meet with potential customers to figure out what they’re expecting. “If you want to serve the client, it’s best to ask the client,” Orbach said.
As for the government’s plan, the 200 meetings are commendable, he said. But if the same officials conduct the meetings by the same playbook they’ve always used, the government will get the same results. Companies will get the usual flood of information but won’t enter the marketplace.
These meetings likely will amplify the buzz created by the stimulus law and further raise the interest of commercial and retail companies hit by the economic downturn. It might even attract more companies that have never considered pursuing government contracts, said Guy Timberlake, chief visionary officer and CEO of the American Small Business Coalition, a trade group.
“But what next?” Timberlake asked. “What occurs as a result of the outreach is the key?”
Although companies can take Federal Contracting 101, “all of the talk in the world is pointless if no one is truly hearing what is being said and willing to act on it,” he said.
Moliere said officials should cap their talk of the business opportunities to what’s available in federal contracting and not play up its splendor.
“Don’t promise any more than you can deliver,” he said. Veterans “have been over-promised in the past.”
Ways to succeed
Companies that are willing to invest in entering the federal marketplace need to hunt for opportunities because contract awards don't happen at industry days. The companies need to track prospects on the Federal Business Opportunities Web site and build relationships with agencies that might become their business partners.
If a company doesn’t have any past experience contracting with the government, it should find a mentor/protégé program, contracting experts said. The General Services Administration launched a new program last month and even allows experienced small businesses to mentor other small businesses. GSA officials expect that more contracts and subcontracts will go to small businesses as a result of the program. GSA was the only agency to exceed all of its small-business contracting goals in 2008.
Another recommendation is to join groups promoting specific types of socio-economic businesses. Moliere said veteran business owners should find groups such as VetForce, which advocates for veterans in federal contracting. Orbach said business owners in the veteran and minority communities, for instance, are almost always willing to help another business in that community.
For companies with experience, agencies are setting aside for small businesses versions of larger multiple-award contracts. This year, GSA awarded the 10-year, $15 billion Alliant Small Business governmentwide acquisition contract to 72 companies, while the $50 billion Alliant GWAC was awarded to 59 larger firms.
Most recently, the National Institutes of Health’s Information Technology Acquisition and Assessment Center said it plans to award a small-business version of its Chief Information Officer-Solutions and Partners 3 (CIO-SP3) GWAC. The 10-year, $20 billion CIO-SP3, which is expected to be awarded in 2010, is geared to health IT reforms. But Rob Coen, the center’s deputy program manager, said it won’t be pigeonholed into doing just health IT.
The Homeland Security Department is working on similar set-asides through its Enterprise Acquisition Gateway for Leading Edge Solutions program.
Agencies have a good reason to first look at the GWACs set aside based for specific classes of socio-economic small businesses, Coen said. Those contracts can help them toward their small-business contracting goals. Agencies have specific goals to send a percentage of their contracting dollars to certain types of small businesses, such as companies owned by women or service-disabled veterans. The government overall has a 23 percent small-business contracting goal. However, the government and agencies struggle to meet those goals, falling short again in 2008.
Coen, who moved from SBA to NIH in February, said the set-aside GWACs help agencies and companies. CIO-SP3’s set-aside contract “will show that GWACs can be good for small businesses,” he said.
For businesses selling to agencies, “attractiveness is good, but convenience is better,” Orbach said.
To be successful, business owners need to gather insight from the 200 industry day meetings and then become eligible to win contracts. “Nothing is more frustrating for a company than not being able to sell to a willing customer,” Orbach said.