The State of Small Business Contracting


There has been a lot of rhetoric in the press lately regarding the state of small business contracting in the Federal Government contracting space. According to the White House, “It is essential that we provide our Nation’s small businesses with maximum practicable opportunity to participate in Federal Government contracting.” As part of this effort the SBA is going to hold 200 outreach events in the next 90 days:

http://www.sba.gov/idc/groups/public/documents/sba_homepage/news_release_09-58.pdf

I’ll need to dust off my good suit since I’m going to be busy attending all of these events! Well actually, I doubt I’ll spend much time doing that. Why? Because as the recent article in Washington Technology points out, I’ve never seen anyone walk out of an outreach event with anything more than a business card. I think this article by Matthew Weigelt makes a number of good points:

http://washingtontechnology.com/Articles/2009/08/31/Small-Biz-Trends.aspx


Some of these points are excellent – network, find mentor companies, develop your value proposition, register in required databases, such as CCR. With a limited amount of resources, small businesses need to focus their business development efforts. The Washington Post carried a related story on how small businesses are disappointed with the Federal Governments efforts in this area:

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/06/AR2009040604049.html?hpid%3Dtopnews&sub=AR

This is a variant of a theme I’ve always heard in this industry – “the Government doesn’t do enough for small businesses, fails to meet goals, etc.”. Having worked for, and with, small government contractors, I can empathize with their frustrations. Companies like Altron can’t afford to pay $25,000 or $50,000 in business development costs – we simply don’t have the resources. Large businesses become frustrated as well – often they view their small business subcontracting plans as just another compliance “tax” so they can continue to work with the Government.

How about a new approach?

My old boss used to say – “everybody pays attention to their own rice bowl”. His point – most people make decisions based on their own personal economic situation. How about a recent example from our friends on Capitol Hill? The Government wants people to drive more fuel efficient cars – energy independence, less green house gases – all admirable goals. They’ve been arguing with the auto manufacturers for years about mileage (CAFÉ) standards. This hasn’t really changed anything. Now they introduce the cash for clunkers program - if you trade in your gas guzzler we’ll give you a $4500 credit – this is so popular, the program quickly runs out of money. What’s my point? People (and companies) act in their own self interest.

Currently the Government sets small business goals for themselves and for their large contractors. They have a hard time meeting them and so do their large vendors. My experience over a decade at a large company – never saw a contract terminated, fined or an option not renewed because the company didn’t meet it’s small business goals. Many large companies do a great job with their small business partners, some don’t, but in the final analysis there really hasn’t been a penalty or reward either way.

I suggest the Government take their “cash for clunkers” approach to their contractor community. What about paying a 1 or 2% fee premium to large firms for exceeding SBA goals on their contracts? I think our large publicly traded contractors would jump at the chance to increase their margins. You would quickly have an aggressive small business program at most of the large business contractors!

Maybe then the SBA could cut back on their 200 outreach events.