Federal contracting officials are currently challenged with meeting their required small business procurement goals. Although the Obama Administration is creating more outreach and contract awareness programs, not every federal contracting official has the ability to locate, educate and guide small businesses on how to successfully secure and continue to grow their business with government contracts.
The federal government has yet to meet its statutory small business procurement goal of 23%. However, in 2010, the federal government managed to reach 22.7%, which translated to nearly $98 billion in federal contracting opportunities for small businesses.
Small business contracting should remain a high priority in the federal procurement process not just because agencies have a statutory obligation to reach out to and consider small businesses but because small businesses are critical to America’s economic and job growth. According to a 2010 American Express OPEN survey of small business contractors, nearly two-thirds (65%) of small businesses that are active federal contractors generate more than $1 million in annual sales.
The good news is that the environment is much more amenable for federal contracting officials to contract with small businesses. The new women-owned small business program and the recent improved rules towards widening the 8(a) Business Development program are excellent developments towards arming federal agencies with the tools needed to reach their procurement small business goals, while leveraging small business contract participation.
Another upside is that federal agencies now have a venue to share best practices and success stories on increasing small business participation in federal contracting.
The Federal government’s ability to meet small business goals is weakened by insufficient understanding of small business programs coupled with the lack of agency accountability.” – President Obama
Earlier this year, the small business procurement group met for the first time to review agency progress in meeting federal small business contracting goals. This new small business procurement group is comprised of senior agency officials established by the President’s Interagency Task Force on Small Business Contracting to give White House Officials, the Small Business Administration, the Department of Commerce, and the Office of Management and Budget an opportunity to meet regularly with senior agency leadership and discuss ways agencies can increase small business contracting and meet their 2011 procurement goals.
“The Federal government’s ability to meet small business goals is weakened by insufficient understanding of small business programs coupled with the lack of agency accountability,” President Obama wrote in a recent memorandum to the heads of federal agencies.
According to the Task Force, a number of agencies are already realizing the huge savings from contracting with small businesses–demonstrating that bigger is not always better when it comes to doing business with the federal government. Here are three examples.
Military OneSource Program saves $300 million and improves quality of service through use of competition and small business subcontracting:
The Military OneSource Program contracts with vendors to provide a variety of support services to military personnel and their families. These contracts had not been competed since the program was established shortly after 9/11. Department of Interior (DOI), which provided acquisition assistance to Department of Defense (DOD), conducted a full and open competition to replace the non-competitive contract. This action is expected to produce over $300 million in savings over the life of the contract and will be heavily supported by small business subcontracts –including women owned small businesses, service-disabled veteran owned small businesses, small disadvantaged businesses, and HUBZone small businesses.
NASA saves $43 million using a competitive set-aside:
NASA repackaged its requirements for comprehensive information technology support to increase competition, encourage innovation, and enhance opportunities for small business participation. Strong small business interest enabled NASA to set aside the procurement and resulted in award to a small business at an estimated savings of $43 million from the previous budgeted value.
The Environmental Protection Agency saves 65% on Superfund Clean-up by shifting from cost-reimbursement to fixed-price contract through a Service-disabled veteran-owned small business:
For many years, EPA’s Superfund program has relied on cost-reimbursement contracts to provide remediation cleanup services. By using its knowledge of historical costs paid under prior cost-reimbursement contracts, EPA successfully acquired these services on a fixed price basis for remediation work at the Tower Chemical Superfund site. The conversion to a fixed-price contract and use of competition, both of which were achieved through extensive collaboration between senior agency program and acquisition managers, resulted in savings of $5.2 million, or a reduction of 65% from the original baseline estimate of what it would have cost to acquire these services on a cost-reimbursement basis. It also allowed EPA to successfully switch from a large business contractor to a service-disabled veteran-owned small business contractor.
Knowledge is power when it comes to successful government contracting, and having the know-how is extremely important for federal agency officials and small businesses to ensure small businesses are getting their fair share of the federal procurement pie.
Among the avenues to obtain that know-how is to learn about and take advantage of existing small business programs. The plus side is that there are already a number of new and improved programs to help the federal government not only meet but exceed its small business procurement goal.
Lourdes Martin-Rosa is the American Express OPEN Advisor on Government Contracting and President of Government Business Solutions, a woman-owned small business firm based in Miami, FL that specializes in helping small businesses navigate the federal procurement landscape.