The 8(a) Dating Game
Primes and small businesses find each other through hard work and happenstance
With no formal program in place to introduce large contractors to potential 8(a) partners, both are on their own to seek each other out at trade shows, get recommended by word of mouth or knock on some doors.
Sometimes those methods work, sometimes they don't.
"It doesn't work nearly as well as it ought to," said Hank Wilfong, president of the National Association of Small Disadvantaged Businesses, Los Angeles. "Primes don't do a good enough job of outreach and looking in the right places." Wilfong, who ran the 8(a) program during the Reagan administration, advises primes, including TRW and SAIC, on how to improve the partnering process.
To be fair, primes have become much better at seeking partners, he said, but there's still a long way to go, especially because the smaller companies can't spend a lot of money marketing to the primes. To improve the process, Wilfong holds "can-do" seminars to teach 8(a)s how to win over the larger companies.
Sometimes perseverance pays off. Bill Cleveland, president of Hi-Tech International, Washington, D.C., a systems integrator that had $6 million in revenues last year, targeted Bell Atlantic as its prime partner. "We made ourselves known," said Cleveland. "It took a year before something happened."
The two companies have been working together since 1990, Cleveland said.
"It's a two-way street," said Tony D'Agata, vice president of marketing at Bell Atlantic Federal Systems. "Often companies are shopping us at the time we're shopping them."
D'Agata said Hi-Tech complements what Bell Atlantic does. When considering an 8(a) partner, the Baby Bell looks for a company that adds to what it can already do for the customer without overlapping.
"When companies are courting us, we look at what we can bring to the table to help them," D'Agata said. "We assess their ability to win a program."
Attracting more business is the hope of both companies. "Sometimes a team makes more sense," said Cleveland. More doors have been opened for Hi-Tech as a result of the partnership, he said. The company targeted Bell Atlantic specifically because of its strong Washington base.
Additionally, Bell Atlantic might decide to mentor a company that shows potential but needs training in telecommunications areas.
Often those companies develop a relationship that transcends the government program. Hi-Tech is scheduled to graduate from the 8(a) program in November 1997 but expects to keep working with Bell Atlantic. Part of that confidence is because the telecommunications industry is growing so fast and such companies are in great demand. "We can continue to be a cost-effective vendor to Bell Atlantic," said Cleveland. "They'll go the extra mile to work with us."
While this partnership is working well, many others don't. One of the biggest problems, Wilfong said, is that primes and 8(a)s aren't introduced on the same level. For example, he said, at a recent trade show, primes sent representatives at levels lower than vice president and the small companies sent their presidents. "You're not talking on the same level," said Wilfong.
However, large and small companies have drastically different structures. Bell Atlantic, for example, has five people who work full time on 8(a) partnering, said D'Agata.
A way to improve the whole process could be to set up a day with primes when 8(a)s could come in and do presentations, Wilfong suggested.
A high-level person at the prime should be included. Wilfong also called for the government to monitor progress more closely.
Also important, most involved in the process agree, is a good attitude toward such partnerships. Says D'Agata: "In addition to the social obligation, it does make good financial sense."
And in the end, the teams that do the best work for the customer will get called back again, strengthening the partnership. "You want the job to turn out right," said Cleveland.