Statistics indicate that government agencies are moving towards multiple-order contracts, thus making it harder for small businesses to compete for federal contracts.
The government buys everything from pencils and paper clips to computer software and construction jobs. To get ahead, you need to familiarize yourself with the way the government works with respect to small businesses.
The intention of the SBA’s Business Matchmaking program is to put small businesses together with buyers. In two years, the program has contracted $30 million worth of business awarded to small businesses. Your business can sign up for the program and begin reaping some of the available rewards.
Other SBA assistance programs for small businesses include:
- Assistance in meeting federal regulations
- International trade programs and promotions
- Community initiatives
Each year the federal government awards over $180 billion in IT contracts, and that figure increases every year. Administered by the General Service Administration (GSA), the Alliant Small Business Government-Wide Acquisitions Contract (GWAC) represents one of the largest government IT contracts ever awarded to small businesses. For more information on GWACs, read Working with the U.S. General Service Administration.
The wide range of IT services covered under the Alliant program include:
- Training Programs
- Web Development
In the private sector, Defense Solutions, LLC implemented a program in 2004 called the Program and Capture Management Practice for small and mid-sized businesses. The intention of the program is to provide professional contracting assistance to its client businesses. The program teaches small to mid-sized businesses how to identify federal programs that best suit each company’s area of expertise. Beyond this, it teaches companies how to qualify for a contract, how to make a bid and/or proposal, how to successfully complete contract negotiations, and how to manage government contracts once you secure them.
Government agencies combine contracts into what is known as “multi-order contracts.” This makes their job easier because they can hire one contractor to perform several services. It involves fewer contracts, less paperwork, and reduced staff time per task. In business jargon, this is a “win, win, win” situation for government agencies: Everyone profits.
Small and mid-sized businesses are forced to compete for these multi-order contracts, and as a result are losing ground to large corporations. Once the contracts are lumped together into a large melting pot, it becomes hard for a small to mid-sized business — that usually has a specific area of expertise — to bid for the contract. This gives a decided advantage to larger companies with a multitude of departments, each specializing in a particular area of business.
As a small to mid-sized business, you have two ways to deal with this problem. You can become sub-contractors with a larger firm that is bidding a multi-order contract. In this scenario, your company becomes part of a larger conglomeration and while making a profit, you can learn and gain experience from the government contracting process.
The second way involves your company subcontracting the various tasks involved in the contract. You become the hub that brings several small and mid-sized businesses together in order to fulfill the requirements of a multi-order contract. Small businesses have to work together as a team when subcontracting in order to ensure profits.
As a small to mid-sized business, government contracts offer a multitude of opportunities. By law, the federal government must award at least 23 percent of these contracts to small businesses. When contract totals equal $200 billion, it means at least $46 billion for small businesses. With these figures in mind, it’s time to sign your company up for the federal programs that cater to SMBs.