Contracting your Small Businesses with the SBA and U.S. General Services Administration
Introduction Federal acquisition and procurement involve making sound business decisions to provide Federal customers with best goods and services. The U.S. General Service Administration (GSA) has a Small Business Utilization Center (SBU) where small businesses receive information on how to work with the government and obtain a contract. The Federal Government gives GSA contracts in a full and open competition process where every business has an opportunity of winning the supply tender (U.S. Department of Veteran Affairs, 2015). The following paper analyzes the suitability of Hobby-Models Company to win a supply tender from GSA to help with logistics. The company produces small remote controlled aircraft (drones) that can sustain a long flight and deliver goods to the expected destination efficiently and safely. The Hobby-Model company stands a better chance of winning the Federal Government contract despite the presence of big businesses such as Boeing and others.
The application process for GSA federal contract occurs through electronic tendering. The first process involves visiting the GSA website to obtain the GSA number. The company obtains the GSA number by downloading a solicitation that acts as an invitation from the federal government to submit an interest in the supply of specific goods and services. After acquiring the GSA number, the offer is sent to the GSA Contracting Officer whose name appears in the solicitation package. The officer checks to determine its suitability. Offers that meet the GSA requirements secure the GSA Schedule Contract, which is the official approval by the federal government to supply products or services to GSA customers. The electronic submission process takes an average of ninety days, but the period varies with the volume of applications.
The electronic submission process is more efficient and secure compared to the manuscript submission process used in the past. In the past, people used to submit handwritten proposals to the government offices for approval. Numerous shortcomings characterized the process. Big companies enjoyed the priority because their managers could afford to navigate through different offices and offer tips to contracting officers for approval. The electronic submission method is safe and cost effective and does not give an opportunity for corrupt deals. A person applies for a tender at the comfort of their house and gets the GSA number immediately. Additionally, the process eliminates instances of submissions getting lost while in the contracting officer’s office. Electronic applications are sent directly to the GSA’s website and the company proofs that the offer reached the Federal Contract officers upon receiving a confirmation from the GSA Contract Officer.
An analysis of the company chances of having its bid accepted
The United States Federal supply gives contracts to all types of businesses irrespective of the size provided the information given by the business meets the GSA’s contract requirements. The company has higher chances of having the bid accepted because it utilizes the modern state of technology that is safe, cheap and efficient to supply products. According to Knerly (2007), companies falling under the small disadvantaged businesses’ category have superior access to government contracting. One of the requirements for winning the government supply bid is that the firm must have its majority ownership coming from disadvantaged individuals. The owner of the company is a service-disabled veteran.
The Veterans Entrepreneurship and Small Business Development Act (The Veterans Act of 1999) aims at expanding existing government programs and make room for veteran programs. Veterans with service-related disabilities have higher chances of having their bids accepted. Large corporations such as Boeing have higher chances of winning the government bid because they have global recognition and have successfully managed other tenders from the government in the past. Likewise, the company stands a higher chance of having its bid accepted because service-disabled-veteran-owned business receives financial, technical, and procurement assistance from the government. The contracting officer must set aside tenders meant for service-disabled-veteran-owned businesses. Additionally, small businesses do not compete with large businesses because they give offers at fair market prices (Knerly, 2007).
The negotiation process
The Federal Government is a neutral body that gives a chance to every business entrepreneur to market their businesses and gives the tender to the best. The tendering process is open to any individual or enterprise as long as they meet the supply requirements. The Hobby-Model company has what it takes to win the award once the GSA Contracting Officer accepts its solicitation. Winning bid with the government requires the binding company to have adequate information about the government’s requirement, target customers, the connection between the company’s goals and government goals, and excellent product’s appeal (U.S. General Services Administration, 2013). The company’s website helps market the company to the government without having to see the offer document. The GSA Contracting Officer looks at the company’s website to determine the vision, mission, goals, products, and services offered, and its history. The Hobby-Model Company has done its best to maximize its web presence to ensure all visitors know what it does at the first glance. The marketing officer will take less time describing the company and its capabilities to the contracting officer because the website tells it all. A successful tender bid must show that the company meets all requirements regarding supply ability, insurance, and financial strength.
Second, the company will focus on the price. I will outline a price that meets the customer’s expectations when providing the price of the most favored customer. The government will receive many applications from different firms and the firm that offers the most acceptable price wins the bid. Third, the company’s value position is highly recommended given that it operates under modern technology advancements. The government keeps encouraging businesses to utilize technology in their operations. Fourth, the federal government looks for the contracting business that solves its problems. The Hobby-Model uses drone technology to deliver products to government destinations forming a suitable base for negotiating on the implementation and use of technology. The process is efficient, cheap, and safe compared to the use of manned aircraft. It would be easier to negotiate for the bid because the government company customers will receive their products more conveniently because the drone delivers the product at the doorstep.
The value of most favored customer to GSA
A company that wins the tender must meet values of most favored customers to U.S. GSA. Any company seeking the government contract to supply goods or services must meet the requirements of the Most Favored Customer (MFC) clause. Under the federal government contracts, the company responsible for the supply of goods or services must offer them with most favored customer’s price (. The company must establish the class of customers to offer the best pricing discount. The FGA schedule requires the supplying agency to outline the offer to the most favored customer. On the other hand, the MFC clause guides the company in determining the value of the most favored customer. The value of the most favored customer will follow the Price Reduction Clause (PRC). The company's most favored customers have a high value to GSA. The company will supply products to government institutions, government offices, places of war, and many other areas.
The value given by GSA to the company's most favored customer has an impact on the operation of the company. The company is small while the demand is high creating a major challenge in meeting the Federal Government's supply requirements. Secondly, the technology used must be very efficient and provide no room for failure. The company uses unmanned aircraft to supply small amounts of goods to customers. More drones will be required to meet the government's demand; hence, requiring more capital and workforce. On the other hand, the company must offer a discount to the GSA's most favored customers that may lower profit margins expected by the company.
Comparison and contrast of advantages of small companies over big large firm regarding contract administration and management
Big firms have better opportunities of securing government contracts because they have the resources and experiences required to supply goods or services to government customers. However, recent changes have made it possible for small business to get a chance of getting Federal Government tenders under the new contract administration and management rules.
Comparison of benefits
First, the government's main objective of obtaining goods and services through the tendering process it to acquire them at competitive prices by the government's value. Small businesses are at an advantage because they can offer contracts at lower prices and meet the government's requirements. Similarly, large corporations like Boeing Co. could decide to lower their values to meet the government's demand creating more competition for small companies.
Second, small companies enjoy some incentives from the government such as participation evaluation factors, price evaluations, participation evolutions, and monetary subcontracting incentives that encourage them to participate in government tendering processes under the new contract administration and management rules. Small companies do not incur many costs in securing a contract with large firms. However, large firms have enough resources to hire private evaluators to value their bids and compete fairly with small companies for the same tender. Additionally, large firms like Boeing Co. have many years of experience in government contracting and can easily submit a strong proposal that follows the agency's guidelines and timetable (Advameg, 2016).
Contrast
Small companies fall into different categories. The Service-disabled Veteran-owned small business category enjoys numerous benefits from the government that large firms cannot achieve irrespective of the size of revenues of recognition in the world market. The contract administration and management team set aside special bids meant for these businesses. Large firms cannot compete with these small firms because they do not fall under the same category.
Methods used to market to the federal government
Acquiring a contract to transact business with the United States Federal government does not need an individual to have a big and globally recognized business. Small businesses have acquired many business contracts with the U.S. federal government based on their unique strategies and ability to meet supply demands. The following three methods are the most effective for marketing the company’s services to the Federal Government.
Developing the company’s value position
Small businesses willing to market their services to the government must place their value position to fit the government’s requirements. The following strategy helps in understanding what the business can do to solve an agency’s problem. An effective value position must contain the functions of the organization, the analysis of people in the government in need of these functions, how the company will help the government meet its goals, and an example of customers that the organization has helped in the past and the results. Fulfilling these elements gives the company higher chances of securing a Federal Government supply contract.
Partnering with GSA to become a better provider to the Federal’s most valuable customers
A good relationship with GSA makes it possible for the company to offer Federal customers what they value at all times. Small companies like Hobby-Model are disadvantaged because customers do not widely recognize them. A good partnership with GSA ensures the success of companies by making them known to customers and increasing sales. Examples of vendors that can assist the company in securing a partnership with GSA are GSA Advantage and GSA Marketing Partnership. Vendors’ help in making customers access the company link and reduce the cost of catalog and mailing (GSA, 2005).
Conducting market research to determine to procure Federal Agencies
A marketing research helps the company identify Federal Agencies that are procuring and place their bids earlier enough before competitors. The marketing research also assists in gathering information about the target market and conducting an outside survey to find out the best price to offer such customers. The Federal Government has some websites where companies can get information about federal customers (GSA, 2005). Once the company acquires the information about the available procuring Federal agency and the requirements of the target customer, it can easily develop a tender application that fits the requirements of the Federal Government and easily wins the bid.
Conclusion
The present methods of procuring under new terms of contract administration and management give a chance to all types of businesses to try their luck in acquiring the government contract. Small businesses that follow the requirements of the Federal Government negotiate the contract effectively and understand the needs and demands of Federal customers get government contracts very easily.
References
Advameg. (2016). Government procurement forum. Reference for Business. Retrieved February
25, 2016 from http://www.referenceforbusiness.com/small/Eq-Inc/Government-Procurement.html
Ettinger, M. S., and Altman. J. C. (2014). Compliance with most favored customer clauses:
Giving meaning to ambiguous terms while avoiding false claims act allegations. Notre Dame Law Review Online, 90(1), 1-16.
GSA. (2005, Sep). Your guide for how to market to the Federal Government. GSA Federal
Supply Service.
Knerly, V. W. (2007). Contracting with the U.S. Government: A small business perspective.
U.S. Department of Veteran Affairs. (2015). VA Federal Supply Schedule Service. Retrieved
U.S. General Services Administration. (2013). Doing business with GSA: A quick guide. GSA.
Retrieved from http://www.gsa.gov/portal/mediaId/169031/fileName/2013_DB_AQuickGuideEngishFINAL%22
