For the twelfth year in a row, the federal government has failed to meet its goal when it comes to contracting with America’s small businesses, including those owned by women. Although there has been some progress, the feds revealed earlier this month that it fell short of its 2012 small-business contracting goal. According to the Small Business Administration, government agencies in the United States awarded 22.25 percent of federal contracts to small firms, just under its established goal of 23 percent. In 2011, 21.65 percent went to small businesses.
But there is some good news. Although the feds fell short of the established goal for awarding contracts to small businesses owned by women, the government exceeded its contracting goals for firms owned by disabled veterans and people of color.
“The federal government is taking steps to help small businesses and increase contract awards for small businesses of all types, including those owned by women,” said James Brooks, who handles public affairs for the SBA’s Miami office.
In May, the federal government removed the statutory $4 million cap on set-aside contracts for women. As a result, federal agencies can now set aside contracts at any dollar value provided it is in an industry designated by the SBA as being substantially underrepresented.
“There are opportunities in government contracting for all kinds of small businesses,” said Brooks. “But you must do the legwork necessary to get your business ready to compete.”
First, Brooks recommends getting your business certified. “Business owners can certify themselves as a woman-owned, veteran-owned, service-disabled veteran owned and minority-owned,” said Brooks. “This is a great way to differentiate your business from the competition because government agencies often have established programs that encourage the use of certified minority-owned firms on contracts.”
Getting certified helped Melissa Ross of Ross Engineering land contract work with the school board in Palm Beach. Ross was part of a team that helped build two new public schools.
“I knew that in Palm Beach County, the school board encourages prime contractors to use women-owned businesses that the board certifies themselves,” said Ross. “So I went down to the school board, got certified and began marketing myself as a women-owned business to architecture firms working on that project. My hard work paid off and I got the work to help build those schools.”
In addition to getting certified, Brooks suggests applying for the SBA’s 8 (a) program. “Qualified businesses, that are socially and economically disadvantaged, can apply for the 8(a) program and, if accepted receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing,” said Brooks. “The SBA helps 8(a) firms build their competitive and institutional know-how, and 8 (a) firms are able to form joint ventures and teams to bid on contracts.”
In South Florida, there were 136 sole source contracts awarded in 2012 worth an estimated $1.3 billion, through the 8(a) program and other set asides including women, service disabled and veteran-owned businesses, according to Brooks.
Brooks also suggests registering your business with the System of Award Management or SAM, the primary database of vendors doing business with the federal government. It’s also a marketing tool for small businesses because it allows government agencies and contractors to search for a company based on ability, size, location, experience, ownership and more. Learn more and register at www.sam.gov.
Acquire as many certifications as possible. “Just because you have one certification, it doesn’t preclude you for obtaining additional ones that may apply,” said Beatrice Louissaint, president of the Southern Florida Minority Supplier Development Council.
But getting certified is only half the battle, according to Yvonne Garth, chairperson of the Broward County Small Business Development Advisory Board. “A lot of firms think that when they get certified, they just have to sit and wait and the work will come to them,” said Garth. “But in reality, you’ve got to market your company, including your certifications, to not just public sectors agencies, but prime contractors that may need your services on their team for large pursuits.”
Plan your pursuits
One of the keys to government contracting success for small businesses is to understand what kind of contracts are coming out related to what you do, according to Kurt Dyer, business development manager for Munilla Construction Management (MCM), a Miami-based building and civil construction firm. “Most government entities will publish a listing of the projects they are going to undertake over the next several years,” said Dyer.
Planning ahead helped Orlando-based Solodev, a computer software company, land a successful contract to design a mobile app for the city of Miami Beach and a website for the Florida Fish and Wildlife Commission.
“We’ve been in business for six years and one the most important lessons we’ve learned is that you have to know what types of work is coming out in order to be successful because that’s exactly what your competition is doing,” said Ray Gilley, CEO of Solodev.
There are even services that will track upcoming and current government solicitations for you for a fee such as DemandStar, BidNet and BidSync.
Market, market and market some more
Small business looking to win government contracts also need to become experts at marketing themselves.
“Most government agencies don’t want to do business with companies they don’t know,” said Bonnie Rimel, owner of Bonn-J Contracting, a firm that specializes in the installation of retaining walls on government roadway projects. “You need to take the time to meet with the key people who work at the agencies where you want to do business.”
Rimel also recommends finding creative ways to stand out. “That’s why I painted all my bulldozers pink. I sure got noticed and it was a smart marketing move that people still talk about to this day.”
“Have a prepared elevator pitch ready that includes your firm’s overview, core competencies, past performance, differentiators and company data,” said Brooks of the SBA. “Then get to know your local contracting officers. Attend trade shows. Talk to other small business owners who have successfully bid and completed on contracts.”
Team up for success
“While it’s essential for government agencies that award contracts to be familiar with your firm, it’s equally important to make sure that larger firms in your industry know about what you do,” said Dyer.
Your firm may not be qualified to go after a particular government contract as a prime contractor, but you can still get a piece of the contract by teaming up with a larger company.
“Teaming allows a small business to leverage the expertise of a group of firms to win the work,” Dyer said.
James Kanter, who heads business development for the Miami office of Lockwood, Andrews and Newman, a national architecture and planning firm with locations throughout the U.S., looks for certain criteria when making a decision on which small business to team with.
“First and foremost, I look for small businesses with established client relationships,” said Kanter. “For example, if I’m chasing work with a county agency, I want to have small businesses on the team that have relationships with that agency.”
Next, Kanter looks for a niche. “If a small firm specializes in a niche service that I need on the team, it is a firm that I would strongly consider joining forces with to win a government contract.”
For Dyer, choosing which small businesses to team with also involves passion, a strong portfolio and excellent references “because when our vendor and subcontractor partners are successful we are successful.”
To be successful in teaming with large prime contracts, small businesses are often asked to be exclusive to one team or another.
“It’s a business decision that you have to make,” said Garth, who is also president of Garth Solutions, a small business that has focused on diversity consulting for the past 10 years. “In my business, we almost always go exclusive to a prime. One, because it helps us to establish a deeper, more meaningful relationship with prime firms and two, because going exclusive also gives a chance to negotiate a better piece of the overall pie for your business.”
Garth acknowledges that small businesses that go exclusive to one team are taking a chance. “I’ve been on teams where we’ve gone exclusive and won and it’s been the other way around, where we’ve lost and were completely shut out of the work. So it is a calculated risk and you’ve got to weigh your options carefully.”
Other tips for success
Winning government contracts isn’t easy, but seasoned small business owners like Ross of Ross Engineering sometimes learn the hard way.
“When you’re going after a job and you team with a larger company, you may run into a situation where they use your firm because you’re a certified women-owned business,” said Ross. “But then when that company wins the work, you don’t hear from them again and you never get a piece of the pie.”
Ross recommends establishing your firm’s role on a team in advance and getting a teaming agreement if you can. “Teaming agreements are good because it clearly defines what you will be doing on the team,” said Ross. “You can negotiate to get a percentage of the overall contract or a set number of hours that you can bill for or even a portion of the scope of work that is designated specifically for your company.”
If you find yourself in that situation, Ross recommends following up often with the prime contractor or the government agency. “It’s up to you to make sure that you contact the prime contractor on a regular basis to get a status on the project and try to get work that was designated for your company.”
Louissaint adds two additional potential pitfalls often overlooked by small businesses that pursue government contracts. “Government agencies pay a bit slower than the private sector, so I advise firms to know the payment cycle and invoicing processes for a particular government agency before pursuing the contract,” she said
Small businesses should also understand that ideas, concepts and work product they pitch or produce for government agencies is public. “If you have a concept, idea or technology that you consider proprietary, there are sometimes steps you can take when pitching government, depending on the agency, to ensure that your concept is protected,” said Louissaint. “Those steps are usually outlined in the RFP or request for proposal that you submit. Read it carefully prior to submitting anything that you don’t want to be made public.”
Use the SBA’s free resources
If you’re a small business considering going after government contracts, “we have the counselors that can help your small business and there is no charge for this service,” said Brooks of the SBA. “We also have resource guides, free classes and workshops that small business owners can tap into.”
The SBA also works closely with SCORE to provide assistance to small businesses. SCORE is a national network of over 14,000 entrepreneurs, business leaders and former company executives who volunteer to mentor small businesses through local chapters.