Virginia diversity-contract program is faulted
March 31, 2010 by cs
A Virginia program to help small, women and minority firms win state business is largely ineffective at awarding contracts to companies with minority owners.
A key reason: The small-business definition is so broad that 99 percent of businesses in the state qualify.
“When you’re looking at minority business and small business, that’s two different issues on two different fronts,” said Darryl Samuels, executive vice president of the National Association of Minority Contractors. “The minority issue gets diluted.”
In a 2006 executive order, then-Gov. Timothy M. Kaine set a goal that 40 percent of state contracts should go to small, women and minority businesses, known as SWaMs. So far this year, small businesses have gotten 28 percent of the state’s spending, minority businesses 6.25 percent and white women businesses 5 percent.
The intent of the goal was to foster diversity among suppliers. But not everyone thinks it does.
“It is a program from hell,” said A. Hugo Bowers, president of the 48-member Black Business Alliance of Virginia, formed to press for public and private sector diversity. “[State agencies] can meet their SWaM goals and never hire a minority.”
To be considered small in Virginia, under a 2006 law, a business must be independently owned and operated with 250 or fewer employees, or have gross receipts of $10 million or less averaged over three years.
The “or” in the definition is a problem, said Stacy Burrs, former head of minority business enterprise offices for the city of Richmond and Virginia. “You could do $150 million in business as long as you don’t have 250 employees.”
An example: The top vendor awarded contracts under Kaine’s program in 2009 was Maryland-based Scheer Partners Management, which earned $37.02 million from Virginia while a year earlier it formed a $100 million equity investment group with another company. Scheer was classified as a small business and was still able to bid as a SWaM vendor through November.
Also, under reciprocal agreements, firms from other states are eligible to bid for state work, including one that was certified as small despite $9 billion in revenue. The state is barred from releasing the firm’s name because of privacy restrictions.
Of the top 10 SWaM vendors paid in 2009, one was minority — information technology firm KST Data Inc. in Ashburn, which has maintenance and hardware contracts with the Virginia Information Technologies Agency. KST received $15.76 million from the state last year.
The Virginia Department of Minority Business Enterprise certifies SWaM businesses. Of the 18,500 certified vendors, minority businesses make up 31 percent, according to director of operations Angela Chiang.
Despite those numbers, they win far fewer contracts.
“The good old boy network has already taken over the job. Nothing’s left for African-Americans, Asians and Hispanics,” said Tinh D. Phan, chairman of the Virginia Asian Chamber of Commerce and spokesman for the Minority Business Consortium.
Flooding the eligible pool with a large group of small, white businesses results in shallow returns for minority firms that lose out in the numbers game. “We’ve been fighting this thing day in and day out,” Phan said.
“The problem with the commonwealth of Virginia is, small is not really that small,” said Hilloah Reagh Driskill, an American Indian and owner of Brave Electrical Contracting in Norfolk who recently won a contract at Old Dominion University.
“I will never be that big,” she said.
. . .
Why should the state encourage its agencies to do business with small, women and minority firms?
“A lot of times, government work is the first work that [a business can] get,” said attorney Albert W. Thweatt II, who counsels small-business owners and teaches entrepreneurship at Virginia State University.
“If you don’t have access to the government work, you don’t have those things to be more successful in the private sector.”
In his executive order, Kaine wrote: “For Virginia to remain competitive, we must assure that all businesses and owners have an equal opportunity to share in state procurement.”
Diversity programs force governments and corporations to branch out from their normal stable of vendors and can help newer firms get projects, which may lead to better pricing from suppliers. That translates into more money and projects to grow a business, Samuels said.
Once work is flowing, businesses have better chances of getting financing and earning money rather than merely surviving.
It’s one reason supporters say diversity programs are important.
Another factor: the economy.
“Minority-owned businesses are . . . the fastest growing component of all small businesses and are likely to continue to be so into the future,” said Thomas “Danny” Boston, an economics professor at Georgia Tech. “The economic vitality of the nation will become more closely tied to the performance of these businesses.”
Minority businesses are slowly getting a piece of the state action. In 2007, they got 2.6 percent of the state’s total expenditure on contracts. In 2008, they got 5.44 percent and last year, they got 5.41 percent.
“It’s incremental movement,” said Samuel Hayes III, the state’s director of Minority Business Enterprise. “Under the program we have, it’s the best we can do.
“This is a not a gimme program. It is a raceand gender-neutral program.”
It’s not enough, Burrs said. “We have devised solutions that either weren’t going to be effective or were struck down because they were going to be in violation of the Constitution.”
A 1989 U.S. Supreme Court ruling based on a Richmond case bars localities and states from creating minority and gender set-aside programs unless they are narrowly tailored and discrimination has been proven.
Claire Guthrie Gastañaga, who serves on the Virginia Small Business Advisory Board, said one definition for small business covering all industries is not the way to go. She prefers the federal method, which uses industry-specific definitions.
The board is pushing the state to study the composition of small business in Virginia so it can be better defined.
. . .
Sixteen other states have set minority or women-owned business spending goals in line with the Supreme Court ruling.
The goals range from 4 percent of contract spending in Washington state to Maryland’s 25 percent, the highest in the nation, according to a database from the California-based Insight Center for Community Economic Development.
Maryland also separates small-business spending goals from minorityand women-owned firm spending, said Luwanda Jenkins, special secretary in the Governor’s Office of Minority Affairs.
The Supreme Court ruling does not bar a state or local government from creating minorityor gender-based programs, but it does place a heavy burden on justification for the program.
To justify the spending goals, governments use disparity or utilization studies.
Maryland’s current 25 percent goal is based on a 2006 study; minority spending programs have been in place since 1978.
Kaine, who declined to comment for this story, used a 2004 study as justification for his program.
The first part of another study was conducted in 2009 and released in January. It shows firms owned by African-Americans, Hispanics, Asians, Native Americans and nonminority women were nearly universally underused in favor of white male firms.
Gov. Bob McDonnell’s administration is “dissecting” Kaine’s initiative and the 2009 study, said spokeswoman Stacey Johnson. The governor is considering an advisory committee to “come up with effective and legal ways to increase the number of minority-owned firms that do business with the commonwealth.”
The McDonnell administration has not authorized the second part of the 2009 disparity study — the key component in creating minorityor gender-based affirmative-action programs.
Without that, big gains are unlikely, said Burrs, now a management consultant.
The disparity will not be eliminated unless there is more race-conscious or gender-conscious programming, which needs the legal backing of a full study, he said.
Michel Zajur, president and CEO of the Virginia Hispanic Chamber of Commerce, said it’s important that state spending on contracts reflects Virginia’s racial, ethic and gender diversity.
“No one’s asking for handouts or anything,” he said. “These businesses are very well capable of producing. But the way that it’s set up, they need an opportunity to put in bids for contracts. So many times they’re bundled in such big packages.”
King Salim Khalfani, executive director of the Virginia State Conference of the NAACP, said his organization and the Black Business Alliance are seeking a meeting with McDonnell on the issue.
“Race neutral hasn’t worked, and I don’t think it was ever intended to work,” he said. If the McDonnell administration doesn’t fund the next phase of the study, “it does not send a great signal they’re serious about improving the numbers.”
Oliver R. Singleton, president and CEO of the 400-member Metropolitan Business League that promotes small and minority businesses, said a lawsuit may be the only way to prompt change.
Or, Singleton suggests, forget race and make state goals favor local businesses. No high court rulings bar that, and supporting local businesses is all encompassing.
“I don’t believe the rural legislators will ever get on board with any minority goals — not in my lifetime,” he said. “But I do believe the rural legislators will get on board with a local provision.”
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READ THE ORIGINAL DOCUMENTS
• Supreme Court opinion – City of Richmond v. J.A. Croson Co. 1989
• State procurement disparity studies: 2004 | 2010
• 2006 Executive Order establishing Virginia’s diversity supplier program
• Virginia’s Diversity Expenditure Portal
WHAT’S A SMALL BUSINESS?
In Virginia, “small business” means an independently owned and operated business which, together with affiliates, has: 250 or fewer employees, or $10 million or less in annual gross receipts averaged over the previous three years.
STATE-CONTRACT GOALS
Then: In a 2006 executive order, Gov. Timothy M. Kaine set a goal for 40 percent of state contracts to go to small-, womenand minority-owned businesses.
Now: Gov. Bob McDonnell is now “dissecting” that initiative and considering forming an advisory committee to come up with legal and effective ways to increase minority contracting with Virginia agencies.
- from the Richmond Times-Dispatch – 3/28/2010
GSA chief says agency will ‘up its game’ with technology
March 30, 2010 by cs
by Emily Long - NextGov.com – 03/25/10 - The General Services Administration will leverage technology solutions to better serve federal agencies, Martha Johnson, GSA’s top executive, said on Thursday.
GSA, which currently accounts for 13 percent of federal spending, could increase its sales if it were allowed to open its schedules to state and local jurisdictions or expand into new markets such as health information technology, Johnson said in a speech at FOSE, a government technology conference and security expo in Washington.
But if the agency is going to expand, it must change its internal business practices such as improving the flow of data and information to boost performance, she added. “What is in our hands is the whole notion of upping our performance and performing better for our clients — being more responsive, helping people find what they need more quickly and understanding where they can get the best value for the right price,” she told reporters after her speech.
“If GSA ups its game, its business will grow,” she said.
Johnson stressed that technology enables collaboration through collective intelligence or social media tools to harness expertise and solve problems. The technologies exist, but government still needs to work out how best to use them to communicate ideas, she said.
GSA on Thursday launched two pilots for its Better Buy Project, a collaborative forum that collects ideas for improving the federal acquisition process. The first uses a wiki and other social media tools to collect comments and questions on how to improve data storage and hosting on Data.gov. The second solicits feedback on the infrastructure of a new hosting environment called Clearpath.
The agency is involved in several IT areas, according to Johnson. Its Office of Citizen Services is exploring social media and helping agencies purchase the right applications. Such a focus has led to agencies having posted 85 YouTube channels and 80 Facebook pages, she said. GSA officials also believe cloud computing could boost the value of IT and hope to quickly improve the government’s legacy IT infrastructure.
Each technology solution involves green IT, Johnson added, and GSA will continue to pursue data center consolidation and more efficient technology solutions.
Johnson also highlighted the importance of collaborating with industry and other agencies such as GSA’s partnership with the Office of Personnel Management to give federal employees the tools and guidance they need to telework. Technology has been an enabler for telework, she said.
GSA no longer serves as the sole supplier of goods and services to government, so it will be a challenge to meet its goal of growth, she said. The agency must compete with other procurement vehicles and explain how it provides the best service to its customers. “GSA’s mission is to support its client agencies so that they can focus squarely on their core missions,” Johnson said. “We must deliver innovative solutions, not the solutions and tools that may have worked in the past.”
Construction contractors can expect affirmative action enforcement effort
March 29, 2010 by cs
The Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”), the Federal agency responsible for enforcing affirmative action mandates against Federal contractors and subcontractors, recently reported on its enforcement efforts for fiscal year 2009. OFCCP collected $9.31 million in back pay from 94 federal contractors through settlements of discrimination claims last year. It completed close to 4,000 compliance evaluations, resulting in conciliation agreements with nearly 700 employers. OFCCP issued this data in connection with its budget request for 2011, which anticipates continued growth and aggressive enforcement efforts. Federal contractors can anticipate that OFCCP’s enforcements efforts will likely increase this year. The Agency’s budget for fiscal year 2010 was increased significantly by the Obama administration in order to increase the number of compliance officers and to meet the agency’s goal of conducting more on-site compliance reviews.
As reported by BNA’s Daily Labor Report, in 2010, the agency also intends to change its focus by increasing its affirmative action compliance efforts and more closely scrutinizing Federal contractors’ affirmative action plans. Construction industry employers are among those who are likely to be targeted in the coming year.
OFCCP has also announced a renewed emphasis on affirmative action efforts for veterans and disabled workers, which includes plans to amend and strengthen regulations under the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act. In light of OFCCP’s expressed intent to make affirmative action its enforcement priority, federal contractors should ensure that their Affirmative Action Plans, and related data on employment actions, are in place, up to date, and in full compliance with regulatory requirements.
Officials mark rules for major contractor database
March 26, 2010 by cs
The broad database contains specific information on contractors’ and grantees’ reliability and history of work with the government
by Matthew Weigelt – Mar 23, 2010 – The Obama administration has settled on the details of a contractor database, as it intends to gather more information to keep a closer eye on government contractors.
Officials have finalized its regulation of the Federal Awardee Performance and Integrity Information System (FAPIIS), according to today’s Federal Register.
“We’ll be able to see, before any new contract is awarded, whether a company plays by the rules, how well they’ve performed in the past: Did they finish the job on time? Did the company provide good value? Did the company blow their budget? It’s your money, so you deserve to know how it’s spent and who these contracts are going to,” President Barack Obama said March 10.
Obama and other administration officials have started tougher oversight of the private sector because, they believe, it works too closely with the federal government.
The FAPIIS database contains specific information on the federal contractors and grantees’ reliability and history of work with the government. The database is available for use in award decisions at www.ppirs.gov.
FAPIIS is intended to significantly enhance the scope of information available to contracting officers as they evaluate prospective contractors competing for their contracts. Officials also hope to protect taxpayers by not having work done by contractors who are not responsible, according to the Federal Register notice.
Contracting officers now must consider all the information in FAPIIS and Past Performance Information Retrieval System (PPIRS) when making a “responsibility determination” about a company. The officers also must notify the agency official responsible for debarments or suspensions if the information appears appropriate for the official’s consideration, the rule states.
On the other side, contractors are required to confirm the information related to criminal, civil and administrative proceedings in which they were found at fault. They then must report the information to FAPIIS. They also have to update their profile every six months throughout the life of a contract. Contractors update the information in the Central Contractor Registration database.
In the fiscal 2009 National Defense Authorization Act, Congress required the administration to establish FAPIIS as a one-stop shop for contractor data. Lawmakers say information on companies was spread too widely in too many separate databases.
In the past, contracting officers historically had access to readily available government information only on suspensions and debarments as they determined a bidding company’s past work. That information was included in the Excluded Parties List Systems.
Since the summer of 2009, agencies have been required to submit electronic records of contractor performance into the PPIRS. The goal is to have a large amount of information from the agencies available to contracting officers across the government. To expand the amount of data in the FAPIIS, officials intend to collect state-level information on contractors in connection with the award or performance of a contract or grant with a state, according to the notice.
“This rulemaking and the associated launch of FAPIIS are part of an ongoing initiative by the administration to increase consideration of contractor integrity and the quality of a contractor’s performance in awarding federal contracts,” the notice states.
About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week.
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SBA overstating number of its small business contracts
March 26, 2010 by cs
by Jim Wyss – The Miami Herald – Mar. 25, 2010 – The Small Business Administration — the agency charged with looking out for the interests of small companies — is overstating the number of contracts it doles out to such firms, a new government report has found.
In a survey of 36 SBA contracts awarded in fiscal year 2008, the agency’s Office of Inspector General found 92 percent of the deals contained errors or were incomplete.
In particular, 11 of those contracts, or 34 percent, incorrectly reported the size of the business to which they were awarded.
In most cases, the study found, large companies were recorded as small companies.
Of the 850 contracts the SBA issued in 2008, anywhere from 681 to 830 likely have errors, the study estimated.
The report is a black eye for the SBA, which has been pushing other government agencies to be more accurate in reporting small business contracts.
While the federal government is obliged to put 23 percent of all direct, or prime, contracts in the hands of small firms, it has failed to meet that mark for the past three years.
In 2008 — the latest year for which data is available — the government reported that small firms received $93.2 billion, or about 21.5 percent of all deals.
But a number of reports have found that faulty reporting is causing the government to overstate small businesses’ take.
A 2009 article by The Miami Herald found corporate titans such as General Electric, Dell Computer and Boeing had been counted as small firms performing contracts in Florida.
The issue is important in the state, where 90 percent of all companies have fewer than 20 employees and government contracts represent a valuable lifeline amid a struggling economy.
In the study, the SBA said its workload demand and lack of resources “hindered its ability to fully implement the Data Quality Plan” that should have caught the errors.
Even so, the agency signed off on the Fiscal Year 2008 contracts and certified them as accurate.
As a result, “inaccurate information is being made available to Congress and the public on SBA contracting activities, including potential Recovery Act actions,” the study found.
The report also found that contracts for fiscal year 2010, which ends Sept 30, were flawed. Of the 35 contracts it sampled, 97 percent had errors.
Contractor advocates criticize administration’s ‘carry-over workforce’ plan
March 25, 2010 by cs
By Elizabeth Newell – govexec.com – March 22, 2010 – Some industry groups strongly oppose a March 19 proposed rule that implements a January executive order requiring vendors that win follow-on service contracts to offer jobs to employees who worked on the original contract.
The executive order states no jobs can be advertised until former employees under the contract have been granted the right of first refusal. But Stan Soloway, president of the Professional Services Council, a contractor association, said it is the Labor Department’s proposed rule that will be excessively burdensome for contractors.
“While the 2009 executive order implied some reasonable hiring flexibility, [Labor's] proposed rule eviscerates those flexibilities and effectively places the government in charge of selecting and managing a contractor’s workforce,” Soloway said. “There are far more effective ways to ensure the fair treatment of workers, including fairly simple, worker-friendly, changes to the [Service Contract Act].”
The executive order stated a “carry-over workforce” reduces disruption to the delivery of services and provides the government with an experienced, trained workforce familiar with its personnel, facilities and requirements. Most contractors already retain incumbent employees because it is more efficient and effective, Soloway said, adding contractors must have the ability to make their own decisions on which employees best meet the contract needs.
“The proposed rule does precisely the opposite,” he said.
Larry Allen, president of the Coalition for Government Procurement, said the draft rule could be “extremely disruptive” for contractors and would discourage companies from competing for work, particularly work previously performed by federal employees.
“The larger issue in play is discouraging the government from contracting things out and discouraging competition. That’s really what this type of thing is aimed at — curtailing any contracting-out operations that the government might decide it wants to undertake,” Allen said. “At the heart, it’s another impediment that makes contracting out that much more difficult.”
Allen said there are elements of the rule that did not make logistical sense or could discourage efficiency.
“If there are 25 people doing the work today, and I think I can get it done with 18, how do you offer right of first refusal to all 25 when you know you won’t have that many slots?” Allen asked.
According to PSC, the proposed rule also might encourage the violation of employee privacy and improper access to proprietary corporate personnel information. The rule states the winning contractor could use personnel performance evaluations of incumbent employees to determine their suitability for employment with the winning firm, but also acknowledges that such information might not be provided by the outgoing contractor.
“Indeed, making those employee evaluations available is highly unusual and raises substantial privacy and liability issues,” Soloway said.
Stakeholders can submit comments on the proposed rule until May 18 at Regulations.gov.
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(C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
Feds stand behind energy savings performance contracts
March 24, 2010 by cs
By Katherine McIntire Peters – govexec.com – March 19, 2010 – Federal leaders on Friday emphasized their support for using energy savings performance contracts to meet efficiency requirements, but told industry leaders they must work together to improve management and oversight of such contracts.
Energy savings performance contracts, or ESPCs, allow agencies to invest in green building upgrades with little upfront cost: companies finance the improvements in exchange for a share of the savings from reduced energy consumption.
“The issue of energy efficiency has never been more relevant for the federal government,” said Richard Kidd, program manager for the Federal Energy Management Program at the Energy Department, in an address to members of the National Association of Energy Service Companies in Washington.
Recent laws have put tremendous pressure on agencies to reduce petroleum, water and electricity consumption, and in October 2009 President Obama signed Executive Order 13514, which required agencies to measure and reduce greenhouse gas emissions as well.
But an inspector general analysis of Energy Department ESPC contracts in September found that much of the savings stipulated in the contracts could not be verified, and in some cases equipment installed under the pacts was not being maintained. Some contracts were in such disarray that the department continued to pay for energy savings in four buildings that had been demolished.
“We went back and visited all the DOE sites and found that people involved in development [of the ESPC contracts] were no longer there, and new people were not [knowledgeable] about the contracts,” said Ab Ream, a technology program specialist at Energy who spoke to the industry executives.
“It was a huge effort,” Ream said, adding that both government and industry officials must perform better. Improving the way energy savings are measured and verified will be central to restoring confidence in the contracts, he said.
Federal officials want future ESPC deals to take a more comprehensive approach to improving efficiency, Kidd said. For example, while it may be worthwhile to upgrade to a more efficient heating system, if heat is escaping through a leaky roof, then those benefits will be minimal.
In addition, Energy wants ESPC contracts to embrace more new technologies being financed through agency laboratories, Kidd said.
Industry officials expressed some concern about whether federal contracting officials were ready to embrace more comprehensive ESPC contracts in the way Kidd described, and wondered how receptive they would be to adopting new technologies. Kidd acknowledged Energy and Obama administration officials must do a better job of training agency contract professionals in making the best use of the tool.
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(C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
Acquisition councils create database to track contractor misdeeds
March 24, 2010 by cs
by Elizabeth Newell – govexec.com – March 23, 2010 – Civilian and defense acquisition councils on Tuesday published a final rule launching a comprehensive database for information on contractor integrity, conduct and past performance.
The Federal Awardee Performance and Integrity Information System, required under the 2009 Defense Authorization Act, will be “designed to improve the government’s ability to evaluate the business ethics and expected performance quality of prospective contractors and protect the government from awarding contracts to contractors that are not responsible sources,” the Federal Register rule stated. The General Services Administration will manage the database, effective April 22.
It will provide one-stop access to the Excluded Parties List System and Past Performance Information Retrieval System, nonresponsibility determinations, contract terminations for cause or default, defective pricing determinations, and self-reporting of criminal convictions and civil liabilities. Under the new rule, FAPIIS will cull this information from existing databases, contracting officers, suspension and debarment officials and the contractors themselves.
The Civilian Agency Acquisition and Defense Acquisition Regulations councils said eventually the database will include performance information for state contracts, but that won’t be added until a later phase of FAPIIS.
“The councils had concerns that the challenges of collecting state government information, such as establishing a reporting format that is consistent across state governments, could not be resolved without delaying this rule-making,” the announcement said. “In addition to working out an appropriate plan for collecting state information, the councils will explore the feasibility of collecting local government information.”
The councils and the Office of Management and Budget also are considering issuing a proposed rule to expand the database’s reach by lowering the threshold of contracts that trigger FAPIIS reporting and expanding the scope of reporting to include illegal activities that aren’t directly related to contracts and grants.
Companies will be notified when the government adds to their FAPIIS records and will have the opportunity to post comments that will remain with the entry unless the company revises them.
The FAPIIS launch is part of a larger Obama administration push to increase the extent to which contractor integrity and past performance weigh into the award process, according to the rule.
“Improved interagency access to these assessments will motivate better performance and reduce the likelihood that taxpayer resources will go to contractors with poor track records in meeting the government’s requirements in an efficient and effective manner,” the announcement stated. “FAPIIS is intended to significantly enhance the scope of information available to contracting officers as they evaluate the integrity and performance of prospective contractors.”
The rule requires contracting officers to review the information in FAPIIS before making awards over a certain size, document how they used the information and notify relevant officials if database entries seem to warrant suspension or debarment.
The Project on Government Oversight, a nonprofit watchdog group, called the database an improvement, but said it should be open to the public.
“The database was improved, but the administration really missed a golden opportunity to promote its good government and openness agendas,” said Scott Amey, POGO’s general counsel. “POGO wanted to see a system with real teeth to protect taxpayers from risky contractors, but instead contractors received a shield to protect them from public scrutiny. If the government is serious about improving federal spending accountability, it just missed its chance to prove it.”
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(C) 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED.
Military vet scores with government contract
March 23, 2010 by cs
by Henry Unger, AJC-March 23, 2010 – Rumor has it that small business is going to be the engine that will deliver us from this economic mess. Rumor also has it that lots of military vets live here.
This column brings together both rumors with a story about Arthur Salus, a small businessman and disabled vet (cracked his leg during parachute training) who scored big with a government contract.
His company, Duluth Travel, is the prime contractor for the Department of Veterans Affairs. [Editor's note: Duluth Travel is a GTPAC client.] That means Salus handles the travel needs of 100,000 V.A. employees, patients and family members. It also means his company’s annual revenue skyrocketed to $80 million, from $8 million. That’s a pretty steep climb from when he started the business in 1993 by borrowing $5,000 on his credit card.
While the road to government contracts had plenty of bumps for Salus, now 60, he thinks others will find a smoother path. And he thinks more small business owners should try to tap into this pipeline, especially during these tough times.
“The government pays. It won’t be going out of business,” he said.
Small businesses are supposed to get a 23 percent share of federal contracts. Disabled vets are supposed to get a 3 percent share.
For the V.A. only, which gives out about $12 billion in contracts, vets are supposed to get 8 percent, with service-disabled vets getting another 3 percent.
Before getting involved with the government, Salus was worried about the future of his business, as he watched thousands of other travel agencies close shop during the past decade. The growth of online reservation systems and the loss of commissions from airlines contributed to their demise.
To survive, Salus started climbing into the world of government contracts in 2003, only to discover that some of the government’s stated goals for small businesses and disabled vets were not being met.
“I sent 35 letters to all sorts of government agencies and only got four responses,” he said, adding they were all negative.
A smooth-talking salesman by trade (he sold cars at one point in his career), Salus decided to get to work. He even testified before Congress about how government agencies were not following federal rules.
Over the past few years, Salus said, the situation has improved, although slowly.
Since he did not have previous experience with the government, he could not win a prime contract. He had to hook up with a big travel company and become its subcontractor about six years ago. After doing that for a few years and gaining experience, Salus then bid on a prime contract in 2007.
While waiting for the verdict on which company would become the V.A.’s main travel agency for five years, Salus didn’t twiddle his thumbs in Gwinnett. He traveled to Washington several times, walking the halls of Congress and the V.A. to schmooze with any politician or bureaucrat he could corner.
He won the contract, attributing his success to networking and persistence.
“Face to face is very important. I was pleading my case. If I can do it, you can do it,” Salus said. “The only person that tells me ‘no’ is my wife. … ‘No’ to me means ‘maybe’.”