Small Business Gains Easier Access to Federal Government Contracts
The federal government recently revised its rules for doing business with independent contractors, making it easier for small companies to compete with corporate giants and win bids. While it still isn't a walk in the park to nab one of these contracts, it should now be a little easier.
According to the Small Business Administration, the U.S. government buys nearly $100 billion worth of goods and services from small businesses. Thanks to the new regulations, federal agencies are now asked to award a greater percentage of their contracts to smaller operations in 2013 than in recent years.
If you’d like to sell to the feds, here are a few things you should know.
Small vs. Large
The new National Information Technology Commodity Program, initiated by the General Services Administration, is expected to steer between $650 million and $1 billion in federal IT purchases away from the usual coterie of industry giants and toward smaller, more innovative and aggressive vendors over the next five years.
One of President Obama’s very first acts of 2013 was to sign a series of new rules that help smaller firms compete on a more even footing with industry giants for a share of the hefty federal contracting budget. The new guidelines put federal agencies under increased pressure to set — and meet — ambitious contracting goals for businesses that fall under the government’s definition of “small.”
To help hold agency leaders’ feet to the fire, Obama’s new provisions specifically require an agency’s performance in contracting with small businesses to play an essential of role in senior officials’ performance evaluations, bonuses, and promotions.
If the new laws work as anticipated, the federal government may at last begin to meet its stated small-business contracting goal, which are currently set at 23 percent of all procurement spending, government wide. (The government hasn't hit this target since at least 2006.)
Other goals of the new contracting provisions include:
- empower small-business advocates;
- crack down on fraud;
- help small businesses compete;
- improve efficiencies and cost-savings; and
- create jobs.
But the real impact of the new federal contracting environment is likely to be a shift in the flow of dollars away from lobbyist-powered industry giants and toward mom-and-pop operations that can navigate the paperwork blizzards that inevitably accompany federal contracts, if the rules work as intended.
Among other changes, the new federal rules:
- ease the restrictions on small firms that want to collaborate on bids for larger contracts;
- discourage agencies from “contract bundling,” the common practice of grouping together smaller projects into massive programs that only large corporations can handle;
- force the SBA to draft new, more flexible definitions of “small businesses” in separate industries, which should increase the number of companies that qualify for small-business contracting set-asides;
- help small technology firms win federal contracts; and
- streamline the purchasing process for all federal agencies.
A first step for small-business owners looking to win federal contracts is to study the opportunities. Matching your strengths to procurement requests will put you in the right ballpark to win government business.
Next, qualify and set up your business for government contracting. You can’t win a contract unless you’re recognized as a player.
Finally, take the time and effort to bid on likely business.
Under the new laws in 2013, while winning a contract may not be a slam dunk, the odds of succeeding are more in your favor than ever before.
Robert Moskowitz is a business writer for Intuit and is passionate about solving small business problems.