While small businesses may have been spooked by the recent government shutdown, you should know that the federal government is the largest buyer in the U.S., spending billions of dollars annually on products and services in construction, R&D, manufacturing, logistics, IT and other industries. Federal agencies also have prime contracting goals for small businesses and set-asides in a variety of categories, such as for women-owned, minority-owned or veteran-owned small businesses.
Last year, the federal government met its small business federal contracting goal for the fifth consecutive year, awarding nearly 24% in federal contract dollars to small businesses totaling $105.7 billion, an annual increase of $5 billion and up more than $20 billion since 2013.
So how do small businesses get a piece of that pie? In a recent GrowBiz post, we gave you some advice on determining whether government contracting is right for you. You can find it here. Ready to pursue federal government contracting opportunities?
It’s a process, but it doesn’t have to be overwhelming, says Brian Van Hook, associate director of Florida SBDC at FIU, a small business development center within FIU’s College of Business. “You have to understand it is the federal government and there is paperwork involved, but the government has made a lot of effort to streamline processes and to make things more responsive. And that’s why programs like SBDC and PTAC are out there — we are here to help people to pursue these opportunities.”
PTACs, or Procurement Technical Assistance Centers, can provide free assistance to small businesses looking to compete for government contracts. PTAC consultants work with a small business on researching opportunities – including through its BidMatch service — as well as provide feedback on the business’ capability statement, proposal and overall strategy. “We can help them work smarter not harder, basically coming up with a more tailored strategy,” said Van Hook.
SBDC consultants can also help small businesses seeking government contracting in a variety of ways. “Some businesses have a great game plan when it comes to contracting but they need working capital until they receive payment. We have other consultants who can help with the operations side or HR as businesses ramp up to service a big contract. That’s where PTAC and SBDC work hand-in-hand to help out the business owner.”
Van Hook, who previously worked for the U.S. Commerce Department and on Capitol Hill, said small businesses need to do their homework and be prepared to follow up. That includes developing your plan for entering the marketplace, completing the required registrations, developing marketing tools and securing relevant certifications.
Althea Harris, the U.S. Small Business Administration’s assistant district director for Marketing and Outreach Area 1 (Miami), agreed.
“Small businesses have to do their research and they have to strategize. It’s very important to be ready and part of that means being financially ready. You have to be able to afford the contract you want, you have to make payroll before the government or a prime contractor pays you. It means you have the right employees in the place or you know how to employ them quickly,” Harris said.
“Being ready also means understanding what value you bring to the proposition, and not everyone is able to articulate that in a way that is compelling. In what way are you distinctly different and better than your competitors? Be very targeted about the contracts you are going after. Understand what it will cost you to pursue the contract. It is a business proposition to pursue the federal money that will cost you time and money, which is money and money.”
TAKING THE FIRST STEPS
To start your search for opportunities, go to USASpending.gov and search for all the federal awards under each and every one of your NAICS codes. These are your potential federal contracting partners, says Van Hook.
Then, do your homework. Once you have your list of potential agency partners, learn what they buy and how much, how they buy it and how much. Are they hitting their small business goals?
Once you have duly registered in SAM.gov, completed an SBA Profile there and created a Capability Statement, you will then want to turn quickly to Capture Management, the function of identifying opportunities, says Luis Batista, a Procurement Technical Assistance Center consultant who specializes in government contracting.
As part of your Capture Management process within the federal system, you will first want to register on the Federal Business Opportunities (FBO) website, which lists all open contracting opportunities over $25,000 across multiple federal government agencies. While on FedBizOpps, you can create an account and have your own custom “My FBO” home page with Quick Links and Quick Search, Batista says.
“What is important to understand here is that you do not need to respond to opportunities by yourself. If you are new to federal contracting, you can use the Interested Vendors section on any given opportunity (where available on FBO.gov) to both list yourself and find others that you may be able to work “with” as a Teaming Partner or “for” as a Subcontractor,” Batista says. “The key to finding Teaming partners is identifying what they have that you need and what you have that they need. This may be a Set-Aside and only one of you may have that certification, or it may be a question of capital, experience, geographical location, or other factors.”
FBO also offers the Vendor Collaboration Central Event Listing, which allows small businesses to find and participate in federal agency collaboration or engagement opportunities. The Small Business Events for Outreach and Training publishes events across the country from many agencies and organizations.
MORE ABOUT SUBCONTRACTING
Many vendors find subcontracting a preferable route to getting experience as a federal contractor. Large business prime contractors with contracts expected to exceed $700,000 (or exceeding $1.5M for construction), are required to subcontract some of the work to eligible small businesses. This is an excellent way to test the waters of federal business without suffering undue risk, Batista says.
Another advantage is that subcontracting doesn’t require a subcontractor to hold a Schedules contract. When a small business receives a subcontract from a larger prime contractor, the vetting process is done by the Prime, not the Agency.
In addition to small business set-aside subcontracting opportunities, qualified small businesses that meet various socioeconomic criteria are eligible to compete for additional set-aside opportunities, after obtaining certification from the Small Business Administration (SBA) where it is required. Set-aside categories include: 8(a) Small Business, Historically Underutilized Business Zones (HUBZone) Small Business; Service-Disabled Veteran-Owned Small Business (SDVOSB); and Woman-Owned Small Business (WOSB). Read more about Set-Asides and Special Interest Groups for additional information here.
You can locate the PTAC closest to you at the Association for Procurement Technical Assistance Centers Website: http://www.aptac-us.org/contracting-assistance/
Once a company is ready for government contracting, SBDC at FIU consultants can help small businesses with a series of next steps. Harris of the SBA also offered this website as a resource.
In the next post, we will explore getting your foot in the door.
Please send GrowBiz topic suggestions and feedback to GrowBiz@FIU.EDU
LEARN MORE: Firms that successfully obtain the 8(a) certification have the opportunity to offer their products or services to the federal government in a sheltered market for nine years. In FY2018, the 8(a) program awarded $548M in contracts to 8(a) firms located in the SBA South Florida District’s 24-county territory south of Orlando. What does it take to successfully use your 8(a) certification? Join Florida SBDC at FIU at “Don’t Sit On Your 8(a)” on May 16 from 9am-11am in Hialeah Gardens This workshop will give you actionable steps to move you forward. Register here: http://go.fiu.edu/8(a)