by Terry Neese Fact:
Small businesses in the United States employ more than 50 percent of all workers and provide nearly 75 percent of all new jobs. Fact:
These same businesses are being left out of lucrative market of federal procurement by their very own government. Fact:
Women-owned businesses contribute $3.6 trillion to the nation’s economy yet receive just 2.2 percent of all federal contracting dollars. Each fiscal year, the U.S. government spends $200 billion with private industry on services and supplies. In other words, federal contracting, or procurement, is a very big and very profitable business in America. That is why small businesses, especially those owned by women and minorities, see the federal government as a great market. Unfortunately, the feeling isn’t mutual as proved in fiscal year 1999 when seven of the government’s largest contractors received more federal prime contract dollars than the entire small business universe received in the same period. If that doesn’t get your attention then try this statistic: Large firms, who represent less than 5 percent of businesses in the United States, receive more than 60 percent of all federal procurement dollars! The uninformed may ask what does it matter if a large company sells products and/or services to the federal government as long as the business is going to American companies. My response would be: Do you remember the Pentagon fiasco of the 1980s when it was exposed that our armed services were paying upwards of $200 for a single hammer? Open competition in the procurement arena must be preserved and all sectors of the economy, including women and minority-owned businesses, must be included to ensure a market-based competition that lets good public policy dictate and not the monopolies that breed outrageous prices and poor quality. Although there has been legislation passed by Congress and enacted into law that sets mandates and statutory goals for federal agencies as it relates to procurement opportunities for small businesses, the government still sadly lags behind even the barest minimum of requirements. The Federal Acquisition Streamlining Act of 1994 established a 5-percent government-wide procurement goal for women-owned businesses. In other words, each federal agency is required to establish a goal for participation of small businesses owned and controlled by women at not less than 5 percent of the total value of all prime contracts and subcontract awards for each fiscal year. Since 1994, federal agencies have fallen well short of the mandatory goal of 5 percent and most often only allot anywhere from 2 to 4 percent. The lack of access to procurement opportunities for women-owned businesses remains an issue Congress continues to debate. There are several pieces of legislation before the current Congress that seek to level the playing field for women-owned businesses. Unfortunately, good intentions don’t always lead to good results. Without enforcement of even current mandates and statutory requirements or accountability steps in place that provide incentives for agencies to do business with small businesses, the federal government will continue to leave small businesses on the sidelines.
Although small businesses offer unequaled advantages to the economy through generating competition, lowering overall costs, creating innovations and providing more jobs than large firms, many federal contracting officers still don’t see the advantage in taking the extra step to include small businesses among their contractors. While small businesses rarely have the buying leverage or the advantage of economics of scale to always compete with the large firms, they are typically more agile, less bureaucratic, more creative and are often in a better position to mold their products and services to exceed the expectations of the customer. Not all of the responsibility lies at the feet of the federal government. Small businesses that desire to be a part of the procurement process must put forth the efforts to market their companies to these federal agencies as well as prime contractors. They must keep up-to-date on changing regulations, come to understand their potential customer, identify their competition and provide quality products and outstanding customer service. In other words, they must utilize the talents and skills that motivated them to be an entrepreneur in the first place! What are the possible solutions that will result in small businesses receiving a larger portion of the procurement pie? Congress has made the efforts to put in place statutory requirements as it relates to small businesses and federal procurement. The problem has been in implementation and accountability. Small businesses have an advocate in the Administration and it’s President Bush. In mid March, during a speech to the U.S. Department of Labor’s Women Entrepreneurship in the 21st Century conference, President Bush unveiled his small business initiatives. Among the President’s initiatives was his personal pledge to hold all federal agencies accountable to mandatory set-asides and procurement goals in relation to small businesses, particularly women and minority owned businesses. Accountability sounds easy enough but so far it has proven difficult to accomplish. If all the federal agencies were held accountable many of the procurement frustrations experienced by small businesses would dissolve. A draft piece of legislation authored by Sen. John Kerry (D-MA), chair of the Senate Committee on Small Business and Entrepreneurship, may be a step in the right direction. The legislation calls for the creation of a procurement ombudsman in the U.S. Small Business Administration. The ombudsman would serve as a facilitator between federal agency procurement officers, small businesses and prime contractors. If enacted, the idea of a procurement ombudsman should go a long way toward ensuring procurement goals for women and minority-owned businesses. This sounds like a positive step in the right direction.
Credit:
Women Impacting Public Policy (WIPP),
A national bi-partisan public policy organization that advocates for and on behalf of women in business, strengthening their sphere of influence in the legislative process of our nation, creating economic opportunities and building bridges and alliances to other small business organizations.
WIPP will continue to monitor the activities as it relates to federal procurement opportunities for small businesses, especially those owned by women and minorities. We’ll keep you posted.
"Smart Business for Small Business"
"Smart Business" is a nationally-syndicated column that is a must-read for start-up entrepreneurs and entrepreneurs taking their business to the next growth level. The column features how to's, legislative information, and 21st-century strategies. The column is written by Terry Neese, National Business Association Public Policy Advisor, entrepreneur, past national president of the National Association of Women Business Owners (NAWBO), and co-founder of WIPP. Terry founded Terry Neese Personnel Services, located in Oklahoma City, 25 years ago.. Article found at:
http://www.wipp.org
Visit the Press section - Subgroup "Smart Business for Small Business"
Related Information: NBA Strategic Partner - New SBA Web Site Aims to Help Women Business Owners Get Federal Contracts NBA Resource Article - The Proof is in the Numbers
NBA Public Policy Advisor - Terry Neese
Reprint of this article does not constitute an endorsement by the National Business Association; the article is for informational purposes for our members and viewers of our Web site. | 
