I. Introduction
It is with no doubt the Federal Government is the world’s leading purchaser of goods and services, with an estimated yearly purchases of more than $425 billion. To ensure that everyone benefits, the government has particularly encouraged small businesses to place their bids on contracts for some of these supplies. In effect, Federal agencies are demanded to initiate contracting goals, with a minimum of 23% of the entire government purchases meant for small firms (Knerly, 2).
All small businesses willing to engage in business with the government do so with the aid of Small Business Administration (SBA). SBA is an agency of the United States of America that gives support to the small businesses and other entrepreneurs. It helps the businesses with advice, loans, appropriate support to contract with the federal government among others. SBA has offers services and programs intended for leveling the playing ground to ensure that small businesses access government contracts fairly (SBA, 3).
Small businesses can greatly generate revenue from selling to Federal Government, and as opposed to the beliefs of many, the process is not as complex. It is however important to understand that there are stringent guidelines controlling how it makes its purchases and small businesses must have to meet some requirements as stipulated through the standardized procedures.
Any small business owner with a desire to sell to the government must initially comprehend the process of contracting and establish whether their venture qualifies and determine whether it government contracting is good for the business.
What is a Small Business?
According to the Small Business Administration (SBA), a small business is a concern established for profit and has a location and operates mainly in the United States of America, or considerably contributes to the economy of U. S through using American materials, labor or products or tax payment (Knerly, 1). The ownership and operation of the business should also be independent. Additionally, this kind of business could be partnership, corporation, sole proprietorship or any other form as long as it legal. This definition however varies slightly to suit the nature of the industry.
The Small Businesses Act, Section 8 (a) mandates SBA to engage the federal agencies for goods and services on contract basis. Consequently, SBA the subcontracts the real performance of work to economically and socially disadvantaged small businesses, which has been licensed by SBA as qualified to get these contracts (Knerly, 3). This program is very advantageous majorly because it enables the government to contract with economically and socially disadvantaged small businesses on a noncompetitive basis. Additionally, the participating businesses gain through financial, technical and managerial support.
A. Factors to consider when making the decision to contract as a Small Business
Some small business need to register for formal SBA certification to engage in any form of federal procurement hence before any interest to contract as a small business, it important to consider registration to get benefits of their particular small business program.
Just like in any form of business, it is important to weigh the costs against the benefits because they are chief economic decisions to be made. The costs and benefits weighed should concern the purchases, sales, expenditures and finally the investments that could accrue from contracting as a small business. If the benefits outweigh the costs, then it is a right decision (SBA, 2).
The working budget is very important because the resources available greatly determine the eligibility of a business to make sell to the Federal Government through contracting. Almost all economic decisions are affected by the constraints of the budget because for a healthy business, expenditure should never be more than available capital.
Value maximization is another important factor to consider as all businessmen want minimize their costs as they maximize the benefits.
B. Opportunities to contract in different industries
There are several opportunities for small businesses within federal agencies and before a person starts to find them, it is important to comprehend how the government employs standardized measures to buy the products it desires. The procedures used by contracting officials to control government purchases are stipulated in Federal Acquisition Regulation (FAR).
The opportunities available are in many government agencies and through a government online service referred as Federal Business Opportunities (FBO) which helps in publicizing business opportunities through www.fbo.gov (Knerly, 5).
Other opportunities include simplified purchases when the government wants to buy products ranging from $3, 000 to $ 100,000. Under this arrangement, the regulations demand that the purchases should be left for small businesses except where the contracting officials fail to get offers small firms whose delivery, quality and prices are competitive. Other opportunities include micro-purchases and subcontracts
C. Randy Lebolo and his company Lebolo Construction’s Success Story
Through networking and carrying out thorough research, Randy Lebolo achieved great success in government contracting. As the founder and owner of a construction firm, Lebolo Construction Management Inc., Lebolo lives as a success story to all those interested in the venture. Lebolo formerly worked his home country, Columbia as a project engineer before relocating to the U. S to set up his own firm in 1999. His company boasts of employing a total of 10 professionals to organize and control the entire project aspect such as sustaining the scheduling of the construction in terms of budget and quality (Open Forum, 1).
Lebolo commenced his operations from scratch after getting a construction license in 2000. His breakthrough came in 2003 when he his first contract to put up a residential housing. In 2004, he obtained a job as a subcontractor to construct banks in Puerto Rico, Colombia and many other areas in South America as well as schools in Palm Beach County (Open Forum, 2).
II. Getting Registered as contractor
The initial and most important step get stated as federal contractor is obtaining registration with the Central Contractor Registration (CCR), an online data-base maintained by the government entailing companies interested to carry out business with it (Knerly, 3).
A. Preparing your small business for registration
There are important preregistration steps that need to be completed before any business registers for the CCR.
i. Steps to take in preparation
Before any attempts to enter any data online, download the registrations forms and instructions and review them to understand (Knerly, 4).
Ensure you have a Data Universal Numbering System number to start registration
All businesses usually require a federal tax identification number, referred to as TIN or EIN, applied for in many ways such as online, by fax or phone.
Ascertain the business’s North American Industry Classification Codes (NAICS) that categorizes businesses. One must provide at least one code for successful registration but is important list as many as possible that apply (Knerly, 1).
Identification of the Standard Industrial Classification Codes of the business.
Examine Small Business Size Standards as per the SBA and its eligibility program
Ascertain the Product Service Codes (PSC)
Ascertain the Federal Supply Classification Codes
Find out SBA certification Programs
Investigate Self-Certification Programs
ii. What to expect
It is expected that before anyone wants to carry out business with the federal agencies, they familiarize with the CCR. Additionally, one is also expected to create a profile in the Dynamic Small Business Search (DSBS) and the CCR.
The small business owner:
Must also be willing to carryout continuous and comprehensive research to establish procurement prospects and prepare the offers entailing quotes and bids.
Should also be willing to subcontract to other big companies and ensure that the venture can financially manage federal contracts that could need high initial costs (Knerly, 2).
Should expect some stringed but friendly measures concerning federal contracting and acquisitions.
B. The Proposal process for government contracting
i. Submission
The submission of bids and proposals process starts when the federal agency pinpoints a need that requires procurement of products and outlines how the manner in which it will lobby for contractors to execute the work. There are two main kinds of solicitations including the “sealed bid process and the competitive negotiation process” (Knerly, 3).
ii. Navigation
There are five main ways to navigate through the world of federal contracting and ensure that a business wins the contracts (Johns, 1). The most important step for the small business owner is having a counselor to help in attaining the contracting information and learn how the game goes. Getting certified is another way to navigate other than setting the targets through deciding what exactly to sell to the federal government. Marketing the business is equally an important tool and finally ascertaining the contracting opportunities.
iii. Negotiation
Within competitive negotiations, the Request for Proposals (RFPs) has various standard aspects and is normally dispensed on standard form. The RFP not only contains a description of the products and the work to be carried out but also some statements concerning other things such as:
The level of negotiations that are projected
The relative significance of price or cost in relation to other aspects within the solicitation
The manner in which the proposal has to be submitted together the format
The information on aspects of evaluation and other factors required for the firms issuing the proposals (SBA, 2).
C. Teamwork - considering partnering with other businesses
In most cases, small business partner with other organizations that are in a position to offer the needed past performance or team with a bigger prime contractor to make use of the government contracting opportunity.
i. How to team with other businesses
Teaming with others can be through either partnering with organizations that have been in the field long enough to offer the needed past performance so that together, they can easily win the contract or working with a bigger prime contractor with the financial capacity to place some bids (FDIC, 8). While partnering with others, one must:
Demonstrate their past experiences and records together with those of their strategic grouping partners in manner that can be understood by the federal agencies. Each performance records should be classified by the relevant experiences such as the private sector, the state government among others.
Make sure that the entire past performance records show the particular work undertaken within a specific industry.
Outline the roles of the business together with the partner’s in a transparent manner concerning how the previous contracts were dispensed
ii. The implications/benefits of teaming with other businesses as a contractor
There are various benefits of working in group with other organizations as listed below:
organizations that have been in the field long enough can offer the needed past performance hence increasing the chances of winning the contract
Working with a bigger prime contractor with the financial capacity to place some bids can help small businesses without a relatively bigger initial capital.
Bigger and experienced firms can offer advice and guidance to small and inexperienced firms (Johns, 2).
It helps in diversifying what some the business has to offer.
III. Maximizing success when you’ve finally made it as a Government Contractor
In the same way a business markets itself while dealing with the private sector, small businesses must market their products to prospective government buyers. It is very important to determine the kind of government agency that buys the goods and services the business deals with (Johns, 1). Additionally is important understand the contacting procedures with the agencies and finally establishing a well-focused marketing strategy in line with the agencies in question
A. Marketing and promotion tools to expand your small business
. Some tips that help small businesses market themselves to the Federal agencies are listed below:
Being acquainted to the agency through knowing exactly who will be using the products you sell and the procurement officers charged with approving the contracts (FDIC, 4).
Concentrating on the opportunities within its niche and doing the best to pursue them
Attending contracting gatherings and making appointments for such and related activities (SBA, 5).
Frequent and broad networking because the chances of winning a contract are greatly dependent on networking.
Involving the Office of Small and Disadvantaged Business Utilization (OSDBU) within most Federal Agencies because they help as vital marketing contacts
Sustaining professionalism, consistency and persistency in every activity.
A. Mentor-Protégé program
This is a program for promoting the capacity of 8 (a) applicants to be successful competitors in the government contracts. It enhances private-sector affiliations and increases the attempts of SBA to find out and act towards the 8 (a) applicants’ development needs (SBA.GOV, 2).
i. How it works
This mentoring program works through assisting the economically and socially disadvantaged organizations under 8 (a) to get access to the contracting opportunities offered by the central government. Any small business owner is at liberty to enter this program as a protégé or as a mentor (SBA.GOV, 1). This program is planned to embolden eligible mentors offer different kinds of help to approved 8 (a) participants as protégés (SBA.GOV, 2).
The development stage of the business should be 8 (a)
The business should never have obtained a contract under 8 (a)
Its size should be smaller than half of a small business as defined by its basic SIC code
Its position in the 8 (a) program should be respectable
The mentor could be a small or big organization, an organization that has progressed from 8 (a) or still in the alteration phase of the program. As a mentor, the organization should be in a position to help the protégé and be committed for a minimum of one year (SBA.GOV).
ii. Quote from Theresa Daytner, Daytner Construction Group “You need to trust your mentor, and they need to be comfortable with your company. There needs to be transparency in the relationship so that each respects what the other brings to it”
C. Raising your small business profile
i. attending conferences and workshops
Attending conferences and workshops helps the business owner learn a lot on the contracting process and how to win the contracts. They also help in networking that assists small business owners to identify potential agencies for contracting.
ii. Industry expertise - speak at conferences, write articles
The expertise in the industry can greatly help in analysis of the firms in a particular industry and use the information gained to enhance the profile of the business. It will give one an opportunity to learn about their competitors since some of the experts are contractors.
iii. Joining local business groups for support and advice
As already looked at, joining other businesses to work together is a good idea as it helps and businesses gain a lot of knowledge on the experiences of other businesses. It also helps businesses obtain the needed past experiences from for increasing the chances of winning a contract other than raising the financial limit that could be needed to bid for some contracts.
iv. Volunteering has its rewards
1. choosing a charitable organization
Deciding to share part of the profits obtained from the contracts with a charitable organization is a good idea because it improves the image and reputation of the company hence increasing its chances.
2. Building and strengthening professional relationships
Professional relationships are very important in federal contracting because it through the professionals that the contracts are awarded hence a good relationship can easily enhance the company’s reputation (FDIC, 3).
3. Ties to the community
Community relations are a vital tool in ensuring the success of any business. Strong ties to the community are a good indication of the good relations between the business and how it carries out its affairs within the community.
V. Conclusion
Contrary to the belief that small businesses cannot do any business with the government, SBA contracting is ensuring that not only small businesses but also the economically and socially marginalized ones get access to federal contracts through SBA contracting (SBA, 9). It is important however to note that it is not a good idea for these businesses to consider contracting to the federal government if they intent to be financially saved by the government because sometimes the undertaking calls for relatively high initial costs. However, this kind of business is very lucrative as long as the business owner is willing to go an extra mile and gather information about how federal contracting works.
There are many measures and procedures that have to be in place such as getting certified and partnering with other businesses to win contracts. The business should also look for ways of identifying opportunities and marketing its products.
Contracting has great rewards provided it is done in the right way and the business owner engages in continuous research and networking to gain access to more opportunities. A living proof that it a reality to earn big from federal contracting is Randy Lebolo, a project engineer who decided to diversify his sources of revenue through federal government certification. He consequently acquired his 8 (a) certification in 2008 to help him access federal contracts. He got his initial sole-source contract four months after obtaining his certification. Since then, he has won many contracts and currently, is among the only 2 out 100 construction management organizations that boast of being among GSA Schedule and 8a certified. This made Lebolo to be a subcontracting opportunities’ prime candidate.
Works Cited
SBA. Opening Doors to Government Contracting: Small Business opportunities. 2012. Web. April 23, 2012
Knerly, Vicky. Contracting with the U.S. Government: A Small Business Perspective. 2011. Web. April 23, 2012.
Open Forum. Cardmember Profile: Randy Lebolo, President, Lebolo Construction Management. June 30, 2010. Web. April 23, 2010 < http://www.openforum.com/idea-hub/topics/innovation/article/cardmember-profile-randy-lebolo-president-lebolo-construction-management-1 >
SBA. GOV. Mentor-Protégé Program. 2012. Web. April 24, 2012.
Johns, Marie. Federal Contracting Basics & Resources: 5 Ways to Get That Federal Contract. 2012. Web. April 25, 2012.
Federal Deposit Insurance Corporation (FDIC). Preparing Technical Proposals for Government Contracting: Understand the factors that influence the technical quality of proposals for government contracts. 2012. Web. April 25, 2012
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