Legislation signed to deliver more government contracts to small businesses
January 7, 2013 by cs
Washington’s elected officials are taking new steps to direct more government work to small businesses, just as contractors are bracing for the threat of sequestration.
President Obama on Tuesday signed as part of the military spending budget a series of provisions to help small firms compete for more federal contracts and ensure that agencies take their annual small business contracting goals more seriously. Most notably, the law requires that small business contracting performance be part of employee reviews for senior agency officials, which factor into their consideration for bonuses and promotions.
The change comes after the federal government missed its stated small business contracting goal (23 percent of total procurement across all agencies) for the eleventh straight year in 2012. Though lawmakers stopped short of imposing penalties like reducing budgets or senior level compensation for agencies that fall short of the annual goals, as had been previously proposed in both chambers, this is the first time they have provided formal incentives to encourage agencies to deliver on their annual pledge to small businesses.
Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/obama-signs-law-intended-to-deliver-more-government-contracts-to-small-businesses/2013/01/04/eb452e10-55f7-11e2-bf3e-76c0a789346f_print.html.
Contractors object to parts of Defense authorization bills
June 19, 2012 by cs
Both the House and Senate versions of the fiscal 2013 National Defense Authorization Act contain contracting provisions that are out of synch with competitive market forces, according to leaders of the Professional Services Council, a contractor trade group.
Objectionable provisions include those affecting executive pay reimbursements, efforts to steer more work to small businesses and efforts to reduce contract bundling, the leaders said in a Thursday conference call with reporters.
Keep reading this article at: http://www.govexec.com//contracting/2012/06/contractors-object-parts-defense-authorization-bills/56282/?oref=govexec_today_nl.
Procurement chief tells agencies to focus on small business set-asides
June 12, 2012 by cs
Agencies must report on their progress in steering federal contracting set-asides to specific types of small businesses, according to new direction from Joe Jordan, the recently installed White House chief procurement officer.
Joined by Small Business Administration chief Karen Mills, Jordan told agencies in a Wednesday memo to meet their statutory goal for contracting 23 percent with small businesses by considering the use of multiple award contracts with an eye toward “maximizing opportunities for small businesses when agencies make small dollar awards, and strengthening accountability for small business goal achievement.”
Keep reading this article at: http://www.govexec.com//contracting/2012/06/procurement-chief-tells-agencies-focus-small-business-set-asides/56188/?oref=govexec_today_nl.
See Joe Jordan memo at: http://www.whitehouse.gov/sites/default/files/omb/procurement/memo/follow-up-april_25-2012-meeting-of-the-small-business-procurement.pdf.
House members introduce flood of small-business legislation
February 8, 2012 by cs
Small business advocates in the House continue to introduce bills in support of small federal contractors. The latest bill would bring into the light the process by which agencies insource work and give firms standing to challenge an insourcing decision in court.
Rep. Mick Mulvaney (R-S.C.) introduced the Subcontracting Transparency And Reliability (STAR) Act on Feb. 2.
Under the bill, agency officials would have to allow the public to comment on the agency’s procedures for bringing in-house work that a small business has been doing. The small business advocates within a department, such as Office of Small and Disadvantaged Business Utilization (OSDBU) officials, would have to review the procedures as well.
The bill would also give small businesses the opportunity to challenge insourcing decisions in court.
Mulvaney tackles subcontracting problems as well in the bill. A small business could not subcontract more than 50 percent of what the government pays it for a contract. There would be a penalty for violating the rule, including a possible three-year suspension from contracting, a fine or jail.
The legislation is designed to ensure that small businesses that get the contracts are doing the bulk of the work. It would make it easier to crack down on deceptive large businesses hiding behind small businesses.
“The STAR Act will help provide an even playing field for many small contractors who otherwise would not have the resources to fight deceitful subcontracting and unjustified insourcing within the federal procurement system,” said Mulvaney, chairman of the Small Business Committee’s Contracting and Workforce Subcommittee.
Mulvaney’s legislation was introduced two days after the Small Business Committee chairman, Rep. Sam Graves (R-Mo.), introduced two bills. One bill would pressure agencies to meet their small business contracting goals or take bonuses away from senior federal officials. The Government Efficiency through Small Business Contracting Act (H.R. 3850) also raises the governmentwide contracting goal from 23 percent to 25 percent.
Graves introduced the Small Business Advocate Act (H.R. 3851) the same day. It would make the OSDBU director a senior executive position and “report directly and exclusively” to the agency head. The Small Business Committee wrangled with agency officials in 2011 about the access their OSDBU directors had to the top-ranking official.
In addition to these three bills, Rep. Bill Owens (D-N.Y.), member of the Small Business Committee, introduced a bill that would cut an agency’s budget by 10 percent in the following fiscal year if that agency missed the set small-business contracting goal.
Each of the bills has been referred to the Small Business Committee for further consideration.
About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared on Feb. 2, 2012 at http://washingtontechnology.com/articles/2012/02/02/small-business-legislation-house.aspx?s=wtdaily_030212.
Lawmaker pushes to boost small business contract work
February 3, 2012 by cs
House Small Business Committee Chairman Sam Graves, R-Mo., on Tuesday (Jan. 31, 2012) introduced legislation to encourage a higher percentage of federal contracts to go to small business, along with a separate bill to elevate agency Offices of Small and Disadvantaged Business Utilization.
Graves’ GET Small Business Contracting Act would raise the small business prime contracting goal from the current 23 percent to 25 percent, while withholding bonuses from agency managers who fail to meet the goal. He estimates the 2 percent increase would bring $11 billion in new federal contracts to small businesses. The government spent about $535 billion in contracting in fiscal 2010, according to the Office of Management and Budget.
“Because the federal government spends half a trillion dollars on contracted goods and services, we owe it to the taxpayers to make sure their money is used wisely and efficiently,” Graves said in a statement. “Government contracting offers a unique opportunity to invest in small businesses while also stimulating our economy, considering small businesses create the majority of jobs — 65 percent over the last 17 years. Small businesses have proved time and time again that they can perform a service or produce goods for the government cheaper and often quicker than their larger counterparts; however, various bureaucratic impediments remain for small contractors.”
The Obama administration missed its small business contracting goal by 3 percent in 2010, according to Graves. His bill also would seek to use more small businesses as subcontractors, raising the goal from the current 35 percent of subcontracted dollars to 40 percent.
Graves is also offering a second bill, the Small Business Advocate Act, that would promote greater use of contractors, prime and sub, at each agency’s Office of Small and Disadvantaged Business Utilization.
OSDBUs were created in 1978 to reserve some federal contracts for for-profit small business concerns in which socially and economically disadvantaged individuals own at least a 51 percent interest and manage and control daily business operations. Their director’s place in the hierarchy has varied by agency.
The Graves bill would elevate those directors to senior acquisition leaders and prohibit them from holding any other position “so they can concentrate on their advocacy responsibilities,” a statement said. “This legislation makes it easier for the OSDBU to advocate for small business contracts, focus on acquisition assistance, and fight insourcing and unjustified contract bundling.”
This bill would require directors to be GS-15s or members of the Senior Executive Service and their performance reviews to be done by agency heads. “Acting as the OSDBU director,” Graves said, “is often simply another assigned duty for a senior official that lacks the authority to challenge decisions made by the chief acquisition officer or senior procurement executive.”
In April 2010, President Obama set up a task force to boost small business contracting opportunities.
The Graves bills come on a day when President Obama is releasing a package of proposed tax breaks for small businesses, including elimination of taxes on capital gains for investments in small businesses.
– by Charles S. Clark, Government Executive, January 31, 2012, at http://www.govexec.com/contracting/2012/01/lawmaker-pushes-boost-contractor-work/41045
Congress could turn heat up on small-biz goals
January 27, 2012 by cs
Under a new bill, a department that misses a set goal to contract with small businesses could lose 10 percent of its budget as a penalty.
Rep. Bill Owens (D-N.Y.) introduced the Small Business Growth and Federal Accountability Act (H.R. 3779) Jan. 18, saying the government’s annual 23-percent small-business contracting goal is regularly ignored by agencies.
He said his bill would “ensure that Washington lives up to its promise to foster an environment of success for small businesses.”
Owens, a member of the Small Business Committee, said federal agencies typically fail to meet their small-business contracting goals and they currently face no penalties for the shortfalls.
Under his bill, if an agency misses the set small-business contracting goal, their budget would decrease by 10 percent in the following fiscal year, with that percentage of funds going to pay down national debt.
“It is critical that federal agencies be held accountable,” Owens said.
The bill also would offer agencies more authority to give “preference” to small companies when awarding contracts. The term “preference” is not defined in the bill.
The bill has been sent to the Small Business Committee for consideration.
It is true that the government struggles to meet its annual 23-percent contracting goal. In the most recent scorecard from the Small Business Administration, the government reached 22.7 percent in fiscal 2010.
That year, agencies awarded a total of nearly $100 billion in contracts to small businesses. However, it was an increase in prime contract dollars going to small businesses for the second year following four years of decline.
SBA gave the government a B on the scorecard for its efforts in contracting with specific types of small businesses, such as those owned by a service-disabled veteran or located in an economically depressed area.
Owens’ bill could have several repercussions though.
In a post on the Government Contracts Legal Forum blog, Tiffany Wynn, an associate at the Crowell and Moring law firm, said agencies may decide to reduce their contracting goals to avoid the 10-percent penalty.
As a result of the bill, officials would have to weigh the penalties for missing the small-business goal against awarding a contract to a large company if the agency could save money.
Wynn also questioned whether this legislation would lead to penalties on companies that don’t meet their own annual small business subcontracting goals.
About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Federal Computer Week. This article appeared Jan. 25, 2012 at http://washingtontechnology.com/articles/2012/01/25/small-business-goal-reduced-budget-penalty.aspx?s=wtdaily_260112.
Subcontracting could be your starting point into the government market
January 9, 2012 by cs
When considering how to enter the government marketplace, most business people first think about doing business directly with federal, state or local government agencies.
Contracting directly with a government entity involves many steps, and likely involves the requirement that you have years of established experience. In fact, there are many major considerations for doing government business as a prime contractor, including:
- Thorough knowledge of all applicable procurement regulations and laws.
- Registration in numerous vendor databases and keeping them up-to-date.
- Comprehensive market research to identify upcoming work.
- Skills necessary to analyze government solicitations, and then prepare detailed and responsive offers.
- Ability to secure bid, performance and payment bonds, if required.
- Ability to finance what may be a multi-million dollar job for at least 60-90 days until the first payment arrives.
- Established relationships with agency, including buyers and end-users.
- Track record of relevant experience.
If your business lacks the wherewithal to support all this, you may want to consider an alternative.
The Alternative to Doing Business Directly with the Government
For less experienced and smaller businesses, there may be a simpler, faster, and less burdensome way to break into the government market — subcontracting. The subcontracting route allows a company to do business with the government indirectly — through a prime contractor — on smaller pieces of work and involving fewer requirements. A subcontractor is answerable to a prime contractor, not the government, and the prime contractor is held responsible by the government for overall work performance.
Prime contractors are responsible for meeting all government contracting requirements. Primes must be able to finance the job, bond the job, and complete the job on schedule.
Primes also are held accountable for meeting any socio-economic small business goals associated with the contract. Because of this requirement, prime contractors working on government contracts are always looking for talented small businesses to meet their needs. For federal contracting, this involves small businesses that are owned and controlled by women, minorities and other disadvantaged groups, and veterans, including service disabled veterans. Small businesses located in historically underutilized business zones (HUBZones) also are preferred by prime contractors. Individual state and local governments also may have preference programs involving particular small business categories.
Relationships always matter, and relationships with prime contractors are no exception. Small firms seeking to do business with a large prime must develop a strategy to introduce themselves and inspire the large firm to award them a small job in order to establish a reputation. Most small firms who have satisfactorily performed work for a government prime contractor report that they have received repeat business.
Preparing To Be a Subcontractor
So, what are the starting points for pursuing the subcontracting path? Here are a few suggestions:
- Gain at least a general knowledge of the government marketplace.
- Identify any areas of the government market where you have particular insights.
- Look for work areas where you may fulfill a specialty requirement or a niche.
- Familiarize yourself with the government’s various small business preference programs and how you can qualify.
- Create and polish a presentation about your firm’s capabilities and strengths.
- Pitch your credentials to prime contractors.
The Georgia Tech Procurement Assistance Center (GTPAC) can help you with most of these steps. By attending GTPAC classes regularly, you’ll learn lots of details about the government market, how it works, and who the players are. We can identify all the small business preference programs and how you might qualify. GTPAC also can provide you with templates for presenting your experience and expertise. We also can identify successful government prime contractors and trade shows where you can meet them.
Help That’s Available
If subcontracting is the route for you, and you want to receive GTPAC’s assistance, we suggest you take the following steps:
- Attend our “Introduction to Government Contracting” class or our “Fundamentals to Working with the Government” briefing. By attending either one, you’ll learn the essentials of the government marketplace. Sign up for these at http://gtpac.ecenterdirect.com/Conferences.action.
- Sign-up and become a GTPAC client. You’ll learn how to do this by attending either of the seminars listed in step #1.
- Attend our class entitled “Subcontracting with Large Prime Contractors.” You’ll gain insights into the various types of partnering arrangements possible in government contracting and how to best position yourself.
- Make a commitment to continuous learning. Even subcontracting requires keeping yourself up-to-date with developments in the government marketplace. Attend GTPAC classes regularly, and consider professional education such as the courses available through The Contracting Education Academy at Georgia Tech.
- Request a template from a GTPAC Counselor for putting together a “capabilities statement” on your company. Use this as a way for putting together an impressive presentation of your credentials. While you’re at it, ask for an “elevator speech” template so you can practice how to make an impressive introductory statement about yourself.
- Learn about small business preferences that may apply to you, by either attending periodic briefings GTPAC puts on about this subject or by attending instructional workshops conducted by the Small Business Administration and by state and local governments. Once you identify your potential qualifications, apply for appropriate certifications. GTPAC will not prepare certification applications, but our Counselors will be glad to offer you advice and counsel along the way.
- Stay alert to upcoming government-sponsored expos, trade shows, and other forums where you can meet and impress prime contractors. An ideal way to learn about such events is by regularly visiting the GTPAC website; our home page lists many upcoming government vendor events.
- Familiarize yourself with government small business specialists. These officials are housed inside each federal agency’s major offices, and there are many small business advocates with state and local government units, too. If a small business specialist is impressed with your capabilities, chances are they can arrange for a presentation of your credentials to prime contractors. You can learn more about small business specialists, their role, and how to identify them by clicking here.
- Research who’s winning government contracts. You can find tips for doing this at: http://gtpac.org/2010/06/three-tips-for-researching-contract-awardees-and-probable-bidders. Also, you’ll want to obtain lists of government prime contractors to contact. Each month, GTPAC compiles a list of all Georgia businesses that have been awarded federal contracts, and we publish various other government contract lists on our web site. (For example, details on the largest 2011 federal awardees appears here.) These are the the businesses you want to target for subcontracting possibilities.
GTPAC can help you become a successful government subcontractor. You may find that subcontracting is just the spot you want in the overall government marketplace. Or, you may find that subcontracting represents the “foot in the door” to moving on to prime contracting with the government.
© 2012, Georgia Tech Procurement Assistance Center, All Rights Reserved.
Surviving and thriving as a small government contractor
December 27, 2011 by cs
During a recent Fairfax County (Virginia) Chamber of Commerce event small, woman-owned and veteran-owned businesses converged to learn about the federal government contracting outlook for 2012 and hear from those who have been in small business shoes.
Freedom Bank’s Vice President and Relationship Manager of Government Contracting Lending, Michael Marsden, led a panel discussion that included an analyst from Bloomberg Government; Phil Panzarella, the president and CEO of CPS Professionals Services, a veteran-owned contractor; and Dawn Halfaker, the CEO of Halfaker & Associates, a woman-owned, 8a, service-disabled veteran-owned contractor.
The panelists’ companies represent a wide array of socioeconomic statuses that act as differentiators and could allow them to fulfill the specific teaming needs of other contactors. However, both Panzarella and Halfaker stated that leading with socioeconomic statuses is not a key to surviving or thriving as a government contractor.
So if your company’s unique qualities won’t make you stand out, what is the best way to get started and win your first government contract?
Relationships and Networking
Data from Paul Murphy, Bloomberg Government Senior Data Analyst, and advice from Panzarella and Halfaker had a common theme: would-be
contractors should network and create valuable relationships.
Murphy’s data showed that while some socioeconomic goals have not been met by certain agencies, they have been increasing. By focusing on the agencies that are striving to meet their small business contract goals and creating relationships with contacts within them, a company will be making a better investment of its time than trying to focus on every agency at once.
The Departments of Veteran Affairs, Homeland Security, Energy and General Services Administration are among the agencies increasing their spending with small businesses. However, not all agencies are making these increases. The Small Business Administration is one such agency: Murphy stated that the SBA will be making cuts, which means less monitoring and enforcement of rules.
Furthermore, heavy cuts will affect the SBA business development centers. This will affect relationships in a couple of ways: Small businesses will have to rely more on each other, and valuable relationships may be better invested in other potential teaming and subcontracting partners.
“We had a lot of success partnering with other large companies. It is easier to connect with their points of contacts compared to agency contacts. Leverage
those relationships. You need to focus on agencies, but limit it,” said Halfaker.
She went on to say that at times, it can be difficult to identify the right point of contact in both agencies and large companies. Relationships with existing connections can help point you in the right direction.
When it comes to partnering and opening a line of communication to other contractors, there must be a give/take relationship, and you must work at it. Unless you continue to communicate with agencies and partners, your relationship could become strained. “Out of sight, and out of mind,” said Panzarella.
Panzarella also stated that prior to building a partnership, CPS Professionals Services requires that small businesses already have a scope and plan in place.
Planning and Preparing for Growth
Though Halfaker & Associates and CPS Professionals Services may have started in the proverbial basement and were initially funded by equity loans, they knew that as they began to win more contracts, growth and complications would be inevitable. Contractors must plan not only how to grow by adding new
employees and infrastructure, but what to do in case of delays in federal payments. Panzarella and Halfaker suggested that spending time wisely (not wasting it on events that won’t result in new connections or beneficial information) and creating a focused plan led to their companies’ growth.
“Hard work. We put in a lot of hours because I believe in where we are going as an organization. We don’t have to go in and win multi-million-dollar awards, we can take the million-dollar contracts,” said Panzarella. His company remained very focused on what it wanted, picked a few agencies, and pursued them.
Tips from Dawn Halfaker
- Know what drives revenue – Focus on the events that will provided the best return.
- Leverage social media – Appear as big as you can. Brand yourself internally and externally more effectively.
- Know your next hire – Make sure you can afford and pay for the new employee.
Related Link
Five Keys to Small Business Government Contracting in 2012
About the Author: Elliot Volkman holds a Masters in digital communications and is the Community Manager of GovWin from Deltek. Published Dec. 19, 2011 at http://govwin.com/elliotsv_blog/surviving-and-thriving-as-small/340486.
SBA proposals could make small-biz credit easier to get
October 18, 2011 by cs
The Small Business Administration is considering changes to its rules that would allow an agency spending its money through a task or delivery order to chalk up the awards to its own subcontracting plans, according to a Oct. 5 Federal Register notice.
Agencies could start to get credit toward their annual small-business subcontracting goals for their orders placed against multiple-agency contracts, a perk for agencies as procurement policy officials push strategic sourcing.
Each agency has to set its own annual goal to make sure that various types of small businesses have an opportunity to participate in its contracts.
Currently though, when purchases come through an inter-agency contract, the agency that holds the contract gets the credit. That applies to the General Services Administration Schedules contracts too.
For example, consider an agency that places an order against a governmentwide acquisition contract. Say a large company gets the award and subcontracts some of the work to a small business subcontractor. The agency that hosts the GWAC gets the credit for hiring a small business, not the agency placing the order.
Prime contracts work differently. If an agency awards an order placed on a GWAC directly to a small business, the purchasing agency gets the points.
Agency officials have told SBA they would like to get the small-business subcontracting credit when they’re spending the money. SBA is also considering giving discretion to the contracting officer from the agency that’s placing the order to establish the subcontracting goals related to the individual orders.
Officials also want real-time insight into subcontracting on interagency contracts. Contractor may have to report their subcontracts with small businesses to the host agency’s contracting officer for each order.
Currently, contractors are reporting to the agency twice a year at the most.
“Reporting on an order-by-order basis will allow the funding agency to receive credit towards its small-business subcontracting goals,” SBA writes in its proposal.
SBA is taking input on the proposal through Dec. 5.
In light of SBA’s changes, Dan Gordon, administrator of the Office of Federal Procurement Policy, has pushed agencies to think beyond their own purchasing and, instead, buy with the government in mind.
Strategic sourcing gives the government leverage over the contractor in setting prices. A greater quantity of potential orders encourages contractors to lower prices.
Office of Management and Budget officials believe agencies want to use more interagency contracts in order to squeeze the most out of their funds and lessen their employees’ workload.
“Particularly in this tight budgetary environment, agencies have told us they are eager for tools that can help them stretch a dollar further and do more with less,” an OMB spokeswoman said Oct. 5.
SBA’s proposed change may make subcontracting goals slightly easier to meet, especially if agencies are turning more toward the interagency contracts, said Ken Dodds, senior attorney at SBA.
He said agencies would find it more difficult to meet subcontracting goals if they didn’t credit.
About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement for Washington Technology. This article appeared Oct. 12, 2011 at http://washingtontechnology.com/articles/2011/10/12/sba-subcontracting-credit-multiple-agency-contracts.aspx?s=wtdaily_141011.