Letter to the editor | Yes to the 30 percent small biz goal
- By Rafael Collado, Sascha Mornell
- Sep 15, 2008
Vince Lombardi likens football to business opining, "the objective is to win ? fairly, squarely, decently, by the rules ? but to win."
But in the government contracting industry, the fair and square rules seem to have disappeared; the playing field is "tilted," to be kind, in favor of large businesses.
Despite small businesses' primacy and role in shaping the American workforce, still more than 30 percent of all government contract dollars, or more than $130 billion, go to only 10 large businesses.
What's more, between 2001 and 2006, the government contracting industry saw a 57 percent increase in contracting dollars and consistent decline in those same years for small business spending, with estimates ranging from 22 percent to 17 percent in terms of actual contracting dollars being spent with small business.
We have all seen the statistics of small businesses' contribution to the U.S. economy. The National Employment Report, now at a nearly 5 year high, shows small business created 58,000 jobs in 2008 while large businesses lost 18,000 jobs. The SBA estimates that more than 50 percent of the American public is employed by small businesses.
Indeed, small businesses represent 99.7 percent of all employers and pay more that 45 percent of the total U.S. private payroll. With the U.S. facing rampant unemployment ? this year alone we have amassed a loss of 84,000 jobs with an unemployment rate of 6.1 percent ? small business' contribution is continually ignored by the one industry that should enthusiastically support it, namely the federal government.
In a time when small businesses innovation is recognized the world over, why do they then continue to struggle for contracting dollars? More importantly, what can be done to level the playing field?
Currently, the statutory small business contracting goal established by Congress is 23 percent, and is reportedly set to increase to 30 percent.
Remarkably, this has rendered some folks a bit frantic. Denouncements of small businesses' capabilities and capacity have surfaced using what could only be generously called specious arguments.
Contrary to Mr. Jerry Grossman's argument, "Don't Rock the Boat on Small Businesses,"
(Washington Technology's Market Watch, 8/11/08), raising small business targets to 30 percent will not require 5,500 qualified new small businesses. To the contrary, small businesses already exist.
In addition to this increase in goals, what needs to change is the government acquisition officer's familiarity with the tools available to assist in reaching this goal, mainly Federal Acquisition Regulation 15.201 and FAR 15.202. Both promote what Mr. Grossman calls for ? a "productive and healthy" contracting environment.
What's interesting is that the FAR is actually designed to protect what Vince Lombardi asserted, specifically FAR 15.201 Exchanges with industry before receipt of proposals and FAR 15.202 Advisory Multi-Step Process. And yet throughout the last decade, government contractors ? wielding threats of protest and calls for contracting reform ? have, in fact, caused contracting officers to assume an overly conservative implementation strategy to the FAR, especially FAR 15.201.
Unfortunately, small businesses face the most challenges when contracting officers restrict interaction with program and technical representatives. This is a very effective barrier for small firms and favors large businesses. Large businesses, because of their dominance in the field, have many long-standing relationships with government agencies and thus have intimate familiarity with agencies' organizational milieu and their current and future requirements. Agencies have often worked with many large government contractors and the businesses' capabilities are well-documented; some organizations are "locked up" by one or two large businesses. Small businesses, on the other hand, are all but strangers to agencies, with only their Web site as evidence of their capabilities and past performance.
Denying such small businesses this critical interface renders moot the government's square and decent environment for contracting. While their words talk up small business, their actions strike down many of the businesses they purport to help.
Further, denying the full breath of small business participation limits government's ability to discover, and thus foster, the benefits of small business innovation and the significant value this innovation brings to the taxpayer.
Institutionally, stifling the growth of small business does not get us any closer to addressing government's many challenges, mission-critical business needs and the economic development of many communities across our nation.Rafael Collado and Sascha Mornell are chief executive officer and president, respectively, of Phacil Inc., a small business government contractor based in Camden, N.J.
. For more information, visit www.phacil.com