The myth of the level playing field
Small businesses need to be disabused of such notions
- By Mark Amtower
- Jun 20, 2011
Mark Amtower is partner at Amtower & Company and can be found at www.FederalDirect.net. This article is adapted from his latest book, Selling to the Government
During the past several years, both sides of the political spectrum have turned up the volume on how important, how great and how necessary small business is to our economy. Fallout from all the talk includes various small business initiatives, changes in government policies, re-shaping the size standards that define small business status and more.
However, most of the talk does little to create traction for small business.
Small business programs have been with us for a long time and are supposed to be designed to help small companies access selected government contracts. Companies that use these programs well can and do benefit. But there are many other companies that assume these programs do much more than they are designed to do.
Further, there has been a persistent myth perpetuated by some seeking to lure any and every company into the government contracting arena: That the playing field is level because of the 23 percent set-aside for small, disadvantaged and minority businesses.
It goes something like this: For a fee, we’ll help you fill out the forms, help you get your GSA Schedule and because you fit one of the set-aside categories and have a GSA number, you’ll get business and contracts will fall from the sky like manna from heaven.
In a recent interview with Scott Denniston, former Office of Small and Disadvantaged Business Utilization (OSDBU) official at the Veterans Affairs Department and now a consultant and executive director of the National Veterans Training Symposium, he spoke about a military retiree who attended a seminar on small business programs where he was told that, because of his veteran status, the “government owes you a contract.” This veteran started a business with his home as collateral predicated on that statement.
Those already in the market, especially small businesses that have had some level of success, know that these claims are simply not true. But too often others less familiar with government contracting fall prey to these come-ons; inevitably they fail, often losing not simply time invested, but frequently much more.
Small business programs are designed to help legitimate small businesses get started and there are some fairly good resources out there: the Small Business Administration, OSDBU offices (at least those that return calls; apparently not all do), Procurement Technical Assistance Centers (PTACs), Small Business Development Centers (SBDCs), and the Service Corps of Retired Executives, or SCORE. There also are many legitimate consultants, seminars and conferences that can help.
But No Level Playing Field
The small companies that leverage available resources, learn about the government market, take their time, focus on their core competency and target agencies and partners that need what they offer are most likely to succeed. Most often the business status component is secondary at best.
Two of the most interesting findings in “Strategies for Success from Federal Small Business Contractors,” a recent American Express study, were: 1) it took an average of 20 months to win a government contract, and 2) during the initial period of trying to enter the market, companies annually spent an average of $86,000 (in cash and resources) pursuing government business.
Bob Davis of HeiTech Services advises small business to focus on no more than two agencies and two prime contractors. They should target agencies based on their need for your company’s product or service and you should target the prime contractors based on their relationship with those agencies. You can also broaden your focus to two small or mid-size businesses that also focus on those two agencies.
A sane approach to government business includes the three R’s required in government contracting: research, resources and relationships. Set-asides can help, but they do not level the field.