Trends on the horizon point to a bright future for small business in federal government contracting.
The federal government is meeting small business contracting goals.
In 2014, for the first time, the feds exceeded the legal requirement of 23% with a 24.9% achievement or $91.7B in contracts to small business. The 23% goal mandated by Congress had not been met at the total government level for years.
Times are Good for Small Business Contractors
The feds are also moving to lowest priced, technically acceptable contracting, driven by budgetary pressures
Lowest Price Technically Acceptable (LPTA)
Small business is uniquely qualified for this type of work, particularly in the services sector, due to lower overhead and G&A rates, as well as agility in work force development.
New industries like Robotics, 3D Printing, Energy, Environmental Protection, Security IT and Geo-spatial IT are creating fields for small enterprises to compete against bigger firms or lead teams involving larger businesses on large scale projects.
Government small business set-aside procurement is on the rise and becoming recognized by many agencies as a way to remove stodgy, entrenched companies when long term contracts come up for renewal. These agencies look to smaller firms for cost effective, vibrant management, while inheriting an existing, trained, incumbent work force available to the winner. The process can dramatically grow smaller firms.
Managing Incumbent Work Forces
A small business anticipating participation in the federal contracting market must make pursuing it part of a long term strategy. Success in government contracting does not happen overnight.
Like any other market venue, a niche must be located, market research must confirm the need for products and/or services and the competition; the customer and the potential sales must assessed. Unlike many other fields, success relies on early requirements identification and strong marketing.
7 Tips for Lean Federal Budget Times
Marketing to Achieve a Small Business Set-aside Contract
5 Factors in Forming a Small Business Contracting Company
The government contracting market allows a small business to pass on the costs of operations at a project level as well as write off company-wide expenses if allocated in a defined manner to single government cost objectives (contracts).
Small business can also operate in a lower risk environment with contract types suited to the challenges involved. The trade-offs to these features are requirements for audits and job cost accounting that require verified consistency from cost estimating to billing and contract closeout. This does not occur without preparation.
Small Business Sytems Development
Entering the market requires carefully sculpting commercial past performance into prospective government contract performance and accumulating strong customer satisfaction ratings. The feds talk to each other.
Meeting the Past Performance Challenge
Business Ethics and Past Performance
With the right combination of planning, preparation and opportunity, a small enterprise can seize the moment with:
Identification of specific opportunities that fit company capabilities
Small Business and FEDBIZZOPS
Astute bid/no bid decisions
Making an Astute Bid/No Bid Decision
A solid team of resources both internal and external
Vital Tips for Project Management
Managing Industry Teaming Relationships
A Winning proposal, effective project start-up/execution and quality products and services
Government Contract Proposal Preparation
The small business segment of the huge federal government contacting market is poised to grow exponentially due to advances in technology and the need for flexibility, mobility, agility and economic performance.
Rule changes are being considered to enhance entrance of commercial enterprises into to the government contacting venue. Congress and the federal agencies are looking hard at constructive changes to make the challenges we have discussed here easier to meet for the small enterprise. But the rules change slowly.
The Government and Innovative Technology
Seize the small business contracting moment by being diligent in learning about the market and pursuing it. Make your company well equipped to succeed:
- Define your niche
- Learn the rules