Small Business Archives

Getting Contracts from The Government

Sunday, April 1st, 2012 at 1:00 PM  
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Small Businesses Short-Changed on Contracts for 10 Years

By Danielle Ivory – Mar 29, 2012

The U.S. government has missed its small-business contracting goal every year in the past decade, a sign of the continuing barriers facing companies competing with larger rivals for federal work.

The government has a target of awarding 23 percent of eligible prime, or direct, contracts to small businesses. It awarded 21.8 percent of $423 billion in such awards in the fiscal year that ended Sept. 30. The Pentagon, which represents more than two-thirds of all prime contract revenue, has also missed its goal for 10 years, according to federal procurement data.

The shortfalls have spanned both Republican and Democratic administrations, which have prodded officials to boost small- business awards. President Barack Obama’s Office of Management and Budget told agencies in a February 2011 memo that their underachievement deprives taxpayers and “takes away opportunities for small businesses to create jobs and drive the economy forward.”

The government’s track record is “a real eye-opener,” said Robert Burton, former acting administrator of the Office of Federal Procurement Policy and now a partner at the law firm Venable LLP in Washington. “As goes the Department of Defense, goes the rest of the agencies. If DoD doesn’t make it, probably the rest of the government isn’t going to make it.”

‘Known Quantities’

Agencies may be reluctant to take chances on small businesses, defined by the government as having fewer than 500 employees or less than $7 million in average annual sales. They generally don’t have the performance records of large corporations that are “known quantities,” Burton said.

“I’m convinced that if the government wanted to meet the goal, they could do it, but I don’t know that the government really wants to do it,” he said.

The Small Business Administration is working with agencies to help them meet their goals, John Shoraka, a SBA acting associate administrator, said in an e-mail.

“The goal is to make the goal,” Shoraka said. “Twenty- three percent is within reach, and the SBA thinks it should be the government’s objective to meet that goal.”

The federal government has “lofty goals,” said Steve Westerlund, president of Aquasis Services Inc., a small business in Pensacola, Florida, that collapsed after doing work for the Department of Defense for 27 years. “But nothing ever happens.”

Closed Business

Westerlund said his company did “the non-sexy stuff,” which included delivering mail, maintaining laundry equipment in military dormitories, and providing administrative support for Naval flight training at Whiting Field near Pensacola.

His military contracting officer told him in September 2009 that 30 of his 100 employees were being converted from contractors to federal workers, as part of a government effort to outsource less of the work, he said. Westerlund’s company had about $4.5 million in annual revenue at the time.

“I couldn’t believe it,” he said. “I knew that was the beginning of the end.”

Westerlund lost his remaining employees the following year and had to close his business. He said he’s now living off savings and still looking for federal contracting work.

It’s getting harder to win federal awards, said Annette Wright, president of Toledo, Ohio-based Unity Cable Technologies Inc., which has done work for the Pentagon and the Department of Homeland Security.

Business Winner

Wright started her company in 1994 as a wireless cable and electrical product supplier. She said she once had three employees, and that she now can’t afford to support anyone besides herself.

“I can’t pay anybody if I’m not winning contracts,” Wright said. “I will bid on supplying blankets these days if I can find them and be competitive on it.”

Small business contract winners such as Jeanne Peck, president of Nash Locke LLC, a McLean, Virginia-based technology company, said they’re not surprised by the government’s poor showing.

“I don’t want to sound like sour grapes, but I think people are comfortable doing business with people and companies they know,” Peck said. “Most little companies don’t have three or four years to mess around building brand new relationships. It is very hard to stay alive.”

Peck’s company won its first direct contract in September, when the Army Corps of Engineers awarded Nash Locke a $52,800 order to manage a technology project, according to the government’s federal procurement database.

Persuading the Government

The company had been a subcontractor for the Pentagon and Department of Education for four years, which she said helped keep her business afloat as she tried to persuade the government to give her that first direct contract.

Some members of Congress want to boost the government’s goal and penalize agencies.

Representative Sam Graves, a Missouri Republican, in January introduced a bill, HR 3850, that would lift the target to 25 percent and withhold the bonuses of senior agency executives if their agencies miss goals.

“The fact that the federal government hasn’t met the 23 percent small business contracting goal is very disappointing, not only for me but for thousands of small businesses who are losing out on opportunities,” Graves said in an e-mail. “It is particularly frustrating that the Department of Defense, which accounts for approximately 70 percent of all federal contracting, has steadily decreased its small business share over the past several years.”

Defense Department

The Pentagon’s direct awards to small businesses have been decreasing since 2009. The Defense Department had a goal of awarding 22.3 percent of eligible prime awards to small businesses in fiscal 2011. It awarded 19.9 percent of $290 billion in such contracts that year.

Total military contracts, including subcontracts, to small businesses have increased from fiscal years 2010 to 2011, Andre Gudger, director of the Pentagon’s office of small business programs, said in an e-mailed statement. The total figures for subcontracts aren’t publicly available.

“DoD has several ongoing initiatives that will continue to increase opportunities for small business participation in DoD acquisitions,” Gudger said.

The Department of Energy, the second-largest buyer across the government, missed its goal of 6 percent last year, awarding $1.3 billion, or 5.3 percent, to small businesses. The Department of Health and Human Services, the third-largest buyer, exceeded its goal of 19.5 percent, awarding $4.5 billion, or 24 percent, to small firms.

Small Business Week in San Francisco (May)

Sunday, April 1st, 2012 at 12:49 PM  
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Examiner.com

Small Business Week May 14-20 2012-Top 10 things to do now to prepare for it

  • By Tony Wilkins, SF Business Tips Examiner
It’s nearly that time of year again. A time when small business owners prepare to network with one another, while placing their businesses in the best possible light.  That’s right it’s almost Small Business Week here in San Francisco. This year’s festivities will be held from May 14th-20th 2012 and will begin with Mayor Ed Lee’s annual kick-off celebration (Flavors of San Francisco) http://www.sfsmallbusinessweek.com/ at the renowned Metreon Center.
This is always one of the more “not to miss” small business events as it’s attended every year by approximately 5000 small business owners from around the Bay. As such I thought it might be a good time to give you my thoughts and tips on the week of celebration before the event to give you a head-start on how to get the most out of the celebration.
1.       Order Business Cards. This sounds like a no-brainer but you’d be amazed at the number of small business owners who attend these events who never have their business cards with them. Check out www.vistaprint.com  to order yours now for the event. They offer great quality business cards for the cost of shipping and handling.
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2.       Better yet-order postcards. Postcards are a great way to promote your business, product or service in a short, concise way. I carry postcards to promote my books, movies and most recently my radio show on small business Small Business Forum Radio www.blogtalkradio.com/tonywilkins . They’re a great way of getting your point across without inundating the prospect with a lot of needless chatter and clutter.
3.       Send out an e-mail blast to prospects you want to do business with inviting them to join you during the kick-off celebration. It’s a great way to promote the event and get in front of prospects at the same time.
4.       Try to attend at least 1 workshop or networking event during that week. This is the week for small business so make the most of it by getting in front of as many groups as possible.
5.       Promote yourself on radio, tv, newspaper and internet radio. My show Small Business Forum Radio www.blogtalkradio.com/tonywilkins will be conducting a series of interviews with entrepreneurs to promote small businesses around the world. Want your 15 minutes of fame? Register at www.reporterconnection.com and www.haro.com  both of which send out e-mail blasts requesting interviews with business owners. It’s a great way to get your name out there.
6.       Make sure your website is up to date with events, new products anything that will attract new customers.
7.       Offer “Small Business Week” specials  on products and services
8.       When networking with a prospect ask, “What can I do for you?” Or “How can I help you?” Prospects respond better when you’re of service to others rather than self-serving. Trust me they will very often reciprocate.
9.       Have a networking pitch ready to go. Practice a bit so that when someone asks ”what you do; you’ll have an answer for them that’s concise and professional.
10.    Look and act like a professional. A new suit wouldn’t kill you. Trust me people notice.
11.   Smile and have fun. People are drawn to others that look like they want to be at the event.
Good luck

Small Business Owners – - Get Ready To Launch To Your Next Level of Success!

Sunday, March 11th, 2012 at 12:42 PM  
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FOR IMMEDIATE RELEASE – March 10th, 2012

OPAL, Quality Systems Management has big ideas about changing the way small business owners think.

Small business owners lack the resources to grow and develop their organizations and OPAL, Quality Systems Management has the solution…The Business Systems Development Program.

The ultimate goal of the Business Systems Development Program (BSDP) is to provide services that will help small businessmen and businesswomen to grow and develop their operation.  This program will produce a more effective, efficient business partner for prime contractors and government agencies. The BSDP will achieve this by raising the level of quality awareness within the small business arena and highlighting the value of continuous improvement and customer satisfaction.  The partnership between all of the BSDP members will build a strong foundation for preparing small business owners for success through quality concepts and management systems that will grow and develop their organizations with proper implementation of established quality plans.

Opal, based in Oakland California, built business systems, enhanced control processes and implemented ISO 9001 compliant quality systems in small, medium and large organizations across the country.   In recent years, OPAL has worked feverishly to engage small businesses, specifically construction contractors, with the explicit intent of introducing quality concepts that have been largely ignored in this niche.  Opal’s main concern is to help these business owners understand how they can turn their “underdog” companies into recognizable, respected organizations that look and feel like “The Big Boys”.   The problem is that business owners impacted by our sluggish economy can’t afford these quality management services.  In 2009 Opal, QSM executives decided to turn the idea of growth and development for small business into a national program that would be beneficial to small business, big business, government and the communities that they serve in. Thus, the Business Systems Development Program was born.

The Business Systems Development Program is designed to help small businesses grow, develop and maintain the ability to continuously improve.

Small business owners are tired of being passed over for large projects.  They know that they have the experience.  They believe that they have the capabilities, but they are constantly asking the same question over and over again… “Why can’t I get a contract?”  “I’ve registered…I’ve taken all of the classes…I’ve attended every outreach event advertised…I’ve put my business on every list that I can think of…so what’s holding me back?”

The answer…most outreach programs teach concepts  – not implementation.  There is little hands-on support provided for building the infrastructure that small businesses need to meet requirements.  The Business Systems Development Program will use the support from the federal government, local agencies and “big” business to close this gap.

The Business Systems Development Program (BSDP) provides more than speeches.  Business owners receive hands-on technical assistance along with counseling and coaching.  BSDP works directly with the organization to accomplish the following:

  • Identify process deficiencies and implement corrective action
  • Improve customer satisfaction
  • Manage and control documents & data
  • Internal quality auditing and systems monitoring
  • Computer technology & social media
  • Process control methods
  • Project Management
  • Quality Planning
  • Supplier Management

The BSDP program is membership based.  There are four types of membership:

  1. Sponsors – Provides financial support to the administration of the BSDP program
  2. Prime Providers - Provides support directly to designated small business
  3. Small Business Participants – Organizations that benefit from the support from the Prime Providers
  4. Program Supporters – Individuals and organizations that contribute to the training, marketing, networking and other efforts that add to the foundation of the BSDP

Stimulus packages are intended to rebuild the American economy and keep funds circulating effectively within and between local communities. It takes money to administer money. By the time  stimulus funds actually reach the small business owners it’s in the form of redundant seminars or outreach events.  The result is a business that is registered to receive information about large contracts.  They are still not qualified to sustain the projects even with a winning bid.   Agencies and prime contractors have only one solution.  They hire larger subcontractors that are located outside of the community.  This unfortunate set of circumstances leaves small businesses fighting for crumbs by grossly underbidding contracts, just to get a piece of the action.

OPAL, QSM set out to shift the paradigms that keep small businesses from excelling.  This is especially in this economy.   Business owners have to prepare for the market’s up-swing.   Deirdre Mercedes, the founder of OPAL, stated, “You don’t want to find yourself sitting on the sidelines when this economic beast turns towards recovery.  When it starts rising to the next level it will jump so high and so fast – - and for small, unrecognized businesses, if you don’t grab hold of it now, it will be too late.”

As stimulus packages roll out across the country, OPAL is looking for ways to energize the economy.  Opal makes positive changes in the business community by taking small businesses and potential business owners to their next level of success.

OPAL, Quality Systems Management – The small business, with big business ideas.

OPAL, Quality Systems Management website: www.opalqsm.com

Business Systems Development Program website: www.opalbsdp.com

Top Small Business Stories

Saturday, December 31st, 2011 at 9:28 PM  
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The biggest small business stories of 2011

Bill O’Leary/WASHINGTON POST – Businesses owners faced a littany of challenges in 2011, but they also scored several victories in the nation’s capital.

, Published: December 30

Sadly, headlines coming out of the nation’s capital this year were inundated with words like gridlock, bickering and failure. Partisan rancor and economic uncertainty spawned a super flop by the supercommittee, a prolonged payroll tax debacle, and on more than one occasion, the near collapse of the federal government.

Still, there were moments to celebrate for entrepreneurs, as policy makers overturned burdensome healthcare reform measures, rescued a pair of small business research programs, and repealed burdensome regulations on federal contractors. The Small Business Administration even managed to set new lending records, and several arms of the government launched new programs to support and encourage entre­pre­neur­ship.

So before setting our sights squarely on 2012, we took a final look back at the year’s biggest small business stories coming out of Washington. Here are the top 11 for 2011.

11. Chamber opens entrepreneurship center: While commonly known as big businesses’ biggest advocate, the U.S. Chamber of Commerce announced plans to start a Center for Entrepreneurship back in February. The center later drafted an advisory council made up of entrepreneurs and plans to sponsor lobbying efforts on behalf of new and young companies. In the years ahead, the group also hopes to spur immigration reform that will make it easier for students from foreign countries to launch firms in the United States.

10. Payroll tax squabble prolonged: Lawmakers, lobbyists and the president spent the last month of the year battling over the extension of a payroll tax cut, which was set to expire at the end of 2011, potentially raising taxes for 160 million American workers. Democrats and Republicans eventually agreed on a two-month extension with plans to hash out a yearlong deal in January. However, the absence of a long-term extension and lingering disagreements over how to pay for the tax cut have left small business owners heading into the new year with a newfound level of uncertainty about potential tax rates.

9. Fed extends low interest rates: In response to unexpectedly slow economic growth, the Federal Reserve in August promised to maintain near-zero federal interest rates through at least the middle of 2013, ensuring that cheap borrowing rates would be available to those seeking loans in the coming years. The declaration of a specific time frame was an unusual move for the Fed, which tends to stick to more ambiguous terms like “extended period” in order to allow for flexibility as the economy ebbs and flows.

8. SBA breaks loan record: The Small Business Administration approved a record-high $30.5 billion in loans in fiscal 2011, evidence that employers are seeking capital to expand their businesses and increase hiring. The tally broke the previous record of $28.5 billion set in 2007 (before lending froze during the recession) and easily eclipses last year’s mark of $22.6 billion. However, the total number of loans increased only marginally from 60,771 in 2010 to 61,689 in 2011.

7. White House launches Startup America: On the heels of his State of the Union address, President Obama announced the formation of Startup America, a broad public-private program designed to encourage entrepreneurship and promote the interests of high-growth start-ups in the United States. The initiative is backed by companies like IBM and Intel Capital and headed by Steve Case, co-founder of AOL and chief executive of Revolution LLC. The group later added the likes of Michael Dell, Reed Hastings, Tory Burch and Magic Johnson to its board of directors.

6. House passes crowdfunding proposals: The House of Representatives in early November easily passed the Entrepreneurs Access to Capital Act, which would alter SEC rules to allow young companies to seek funding through online portals. The Senate is also considering two separate yet similar crowdfunding bills, and the president has expressed support for the proposals. The House also passed the Access to Capital for Job Creators Act in November, which would eliminate some of the SEC rules prohibiting the general solicitation of funding, setting the stage for further debate on the Hill in early 2012.

5. Fed settles on swipe fee limits: The Federal Reserve in June approved a roughly 24-cent limit on the fee debit-card providers can charge vendors for each card transaction. While the cap landed at about half of the current average of 44 cents per swipe, retailers large and small had expected a much lower limit after the board originally proposed a 12-cent cap back in December 2010. Moreover, the structure of the cap (a number of pennies rather than a percentage) left some small-ticket vendors paying even higher swipe fees after the rule was implemented in October.

4. Small business research programs reauthorized: After three years of short-term extensions, lawmakers in December agreed to reauthorize and expand the Small Business Innovation Research program and the Small Business Technology Transfer program, which require government agencies to set aside some of their annual research budgets for contracts and grants to small businesses. The compromise extended the programs for six more years, increased the small business allocation requirements and allowed venture-backed firms to compete for grants through the programs.

3. Withholding tax thrown out: In November, the president signed legislation overturning an earlier measure that would have required federal, state and local governments to withhold 3 percent of payments to contractors until they paid their federal taxes. President George W. Bush approved the original measure five years ago, but officials delayed implementation following heavy criticism from contractors and business groups across the country. The repeal also marked the first piece of Obama’s jobs plan to pass into law.

2 . Patent system overhauled: The president this fall signed the America Invents Act, radically altering the United States patent system for the first time in more than half century. The law moved the country from a first-to-invent to a first-to-file patent system, limiting expensive legal battles over patent rights and aligning the nation’s system with that of most other nations, helping American innovators protect their intellectual property in foreign courts.

1. Healthcare paperwork requirement abolished: Business owners around the country breathed a collective sigh of relief in April when lawmakers repealed a provision of the health care reform law that would have drastically expanded the 1099 information filing requirements. Under the proposed rule, companies would have been required to submit forms to the Internal Revenue Service any time they spent more than $600 a year with another business, meaning potentially hundreds of burdensome forms for firms that currently file only a handful of 1099’s each year.