The Contender

During these times of economic duress, there’s actually room for growth–you just have to know where to look.
Even before the recession, the federal government has been considered a fairly untapped entity with which to do business. But small business owners need to reconsider their efforts and for good reason:

Furthermore, federal agencies are required to establish contracting goals, with at least 23% of all government spending targeted to small businesses.

In 2007, small businesses won $83.2 billion in federal prime contracts, an increase of almost $6 billion from 2006, according to the Small Business Administration . The figure is a hefty one; however, the government’s small business spending goal was actually missed by 1%.

“Many small business owners do not consider the viability of the government contract market,” says Karen Bailey, founder and CEO of The Resource King International L.L.C., a Norfolk, Virginia-based company that specializes in preparing and positioning businesses for government contracts and grants as well as individuals for career transitions. “The government represents a ‘paying’ customer with unlimited needs who spends millions everyday, buying in both small and large volumes the very products and services that many small businesses sell.”
And contributing to this push is President Barack Obama’s economic stimulus package which will provide billions of dollars in contracting opportunities over the next several years. The areas projected to have the most significant opportunities include infrastructure, modernization of schools, green initiatives, technology, construction, and health information technology.

Despite the possibilities, Eric Dobyne, Chicago regional director for the Minority Business Development Agency, says a low percentage of minority businesses take advantage of seeking contracts within this sector due to a lack of knowledge or because they find the process too complex, especially when there are no guarantees they will be awarded the contract. But even when a bid is not accepted, the business can request a debriefing from the agency. Dobyne says that when successfully attained, a government contract can create a solid revenue stream. He adds, “It has to be a part of your overall business strategy.”

And Bailey, who works with clients large and small in developing and implementing strategic solutions and best practices to increase the number of contracts awarded to MWVBEs (Minority, Women and/or Veteran Business Enterprises), agrees. She adds, “Government contracts represent a potentially large revenue stream and small business owners can’t afford to leave any money on the table.”

STEPS FOR SUCCESS

Are You Ready? Investigate if the government is currently interested in purchasing your goods or service. Check out the Federal Procurement Data System Website. There, you can see past contracts awarded and find which agency is buying similar products. Also visit USAspending.gov, which provides citizens with easy access to government contracts, grants, and other award data. Next, familiarize yourself with the rules of government contracting. The rules and regulations of government contracting are published in the FAR (Federal Acquisition Regulation)

–a must-read reference guide for the prospective enterprise as well as firms that have secured a contract. The FAR will tell you exactly what your rights are, what you can and cannot do, what things benefit you, and why you need to understand them so that you know the system and benefit from it. “Small business owners should not be overwhelmed by the FAR,” urges Bailey. “They can use the table of contents to locate topics that pertain to them, but should definitely have a working knowledge of FAR Part 19” (a section of the Website that assists small businesses in dealing with the bureaucracy of accessing governmental contracts).

Have your team in place. “If you’re serious about going after government contracts, meet with your professional advisers,” says Sarika Sangwan, manager of advocacy marketing at American Express OPEN. “Your attorney should understand how federal contracts work and your CPA should be able to help you with the financial aspects of these opportunities.” In addition to this, pull together resourceful, strategic thinkers who add synergy and excellence to your team.

Consult your resources. Procurement and Technical Assistance Centers (PTACs) assist minority and women-owned businesses in marketing to the government. For a listing of centers near you, visit Aptac-us.org. The SBA also offers resource guides and a free online training course. Women Impacting Public Policy (WIPP), a not-for-profit public policy organization and

the nation’s largest bipartisan women’s business group, and American Express OPEN have teamed up to increase the number of contracts awarded to women-owned businesses (The Equity in Contracting for Women Act stipulates that federal agencies award 5% of all contracts to women-owned business. But nine years later that target has reached only 3.4%.)  Through seminars, events, and online resources, American Express OPEN and WIPP’s joint venture, Give Me 5, is a national program for women business owners that breaks down the process of applying for federal contracts.

Develop relationships. Going after a government contract is more than just bidding; you have to market your business to your target agency as well as cultivate relationships with procurement officers. Maximize government outreach events such as agency procurement fairs, contractor matchmaking sessions, and conferences.

Get certified. The SBA‘s certification programs will increase your odds of winning a contract. You can self-certify as a service-disabled veteran-owned small business, a veteran-owned small business, or a woman-owned small business. You can also sign up for one of the SBA certification programs, which include the 8(a) Business Development program, the HUBZone program (provides federal contracting opportunities for qualified small businesses located in distressed areas), and the Small Disadvantaged Business certification program.

Get registered. To start the process of becoming a federal contractor, you will first have to register your business in the Central Contractor Registration database. The CCR is an online business portal that helps

small businesses market their goods and services to the government. Federal agencies and prime contractors scan the database to find potential vendors. The CCR is your business’ résumé, so be sure to fill out the mandatory and optional fields to heighten your chances of being sought out by procurement officers and agencies.

Follow the money. To start bidding, check out Fbo.gov, which offers federal government procurement opportunities of more than $25,000. Government buyers publicize their business opportunities by posting the information directly to the site. Set-aside contracts for small business owners are imbedded in the FAR under the small business programs section. And becoming a General Service Administration schedule contractor is also an option. Through the GSA Schedule program, the GSA establishes long-term contracts that allow agencies to order certain commercial suppliers and services directly from GSA contractors. Check out www.gsa.gov/schedules.

Team up. Consider teaming up with a small business in your industry. This will increase your chances of getting a contract you may otherwise not be able to win on your own. Also, consider subcontracting with larger firms. Large businesses with prime contracts exceeding $550,000 (except construction, which is $1 million) must provide a plan with subcontracting opportunities for all categories of small businesses, according to the SBA. Check out the SBA’s SUB-Net, a searchable database prime contractors use to post subcontracting opportunities.

The story originally appeared in the July 2009 issue of Black Enterprise magazine.