The Small Business Advocate Act 2012

The Small Business Advocate Act of 2012 (H.R. 3851) is a January 2012 bill that was just ordered to be reported by voice vote. This piece of legislation takes the small business advocate at the Office of Small and Disadvantaged Business Utilization (OSDBU), and instead of it being a secondary duty, it creates a new job title of senior acquisition leader, which elevates their position in the organization and gives them a little more administrative power. This is a good thing in all respects, giving the OSDBU more respect and giving small business owners a single point of contact – someone whose only job is to advocate for small business.

This bill was sponsored by Small Business Committee Chairman Rep. Sam Graves (R-MO) and is definitely one to watch.


Meeting the PTAC

Congress created the Procurement Technical Assistance Program (PTAP) to help businesses secure government contracts. There are more than 300 Procurement Technical Assistance Centers (PTACs) nationwide (find yours at http://www.aptac-us.org/new/Govt_Contracting/find.php).

According to the Association of Procurement Technical Assistance Centers, “PTACs are staffed with counselors experienced in government contracting and provide a wide range of services including classes and seminars, individual counseling and easy access to bid opportunities, contract specifications, procurement histories and other information necessary to successfully compete for government contracts.”

Your PTAC is one of the simplest, easiest, best resources for start-ups who want to work with the federal government. They exist solely to help you succeed. So what are you waiting for? Find your local PTAC and get over there!

The PTAC is similar to other resources we’ve been discussing on this blog, like the OSDBUs. They’re designed to help you, but they’re not actually customers. Their primary benefit is that they can link you up with local agencies, so they are especially useful for getting a small business in the door. But they also know about other, hidden, resources that are available from the Small Business Administration (SBA) that help you with things like acquiring capital, writing a business plan, hiring staff and meeting personnel requirements.

PTACs are excellent guides to the resources in YOUR area. And best of all, they’re familiar with everyone in your geographic locale that is a part of the Federal Government community, and usually know a bunch of the state and local folks as well.

Most PTACs also maintain some kind of bid opportunity list, although these are usually in the construction and facility services area, and not the full gamut of engineering or professional services. However, they DO know who to go to, and are happy to share all that information. If you haven’t visited your local PTAC office, you’re missing out on some really useful data.


Certifying Your Business With a Special Designation

While simply registering your small business with the CCR will help you access the contracts that the federal government reserves for small businesses, did you know that there are also set-aside opportunities for specific socioeconomic groups? These include: woman-owned businesses, HUBZone businesses (located in a traditionally underutilized business area), veteran-owned businesses, service-disabled veteran-owned businesses and 8(a) businesses (owned by the socially and economically disadvantaged).

The government wants to protect those businesses when they’re starting out so they don’t have to compete right away with large, billion-dollar enterprises.

Aside from giving you access to special contracts, set-aside businesses also receive a lot of developmental assistance, programs and people to help you along the way as you build your business. In exchange for that, there is a time limit for how long you can stay in that protected class, currently nine years.

When you claim one of these special designations, you do have to prove that your business belongs in one or more of these categories.

There are different programs that can verify your claim for set-aside small business status, depending on which category you’re in. All of these programs provide for both initial certification and then ongoing verification that your circumstances have not changed.

The HUBZone program is managed by the small business administration (SBA). The SBA also manages the 8(a) program and they do the certification for both of those.

The woman-owned program is managed by the SBA but the certification is established through special organizations that are designated to perform the certification, e.g., the Women’s Business Enterprise National Council (WBENC) and the National Women Business Owners Corporation (NWBOC).

Some of the criteria you must meet in order to access set-aside money for woman-owned businesses are that:

  • A woman owns 51% or more of your business
  • The woman owner is actually actively involved in the business
  • The woman owner makes the final decisions for the business

There are many other specific requirements to be certified as a woman-owned business, such as U.S. citizenship.

Lastly, service-disabled and veteran-owned certification programs are run by the Center for Veterans Enterprise (CVE), a program office within the Office of Small and Disadvantaged Business Utilization (OSDBU) of the Department of Veterans Affairs. The certifications are based on the requirements set out in the Federal Acquisition Regulations (FAR) and the Defense Federal Acquisition Regulations (DFAR).

As an example, TAPE, LLC is owned by a service-disabled veteran – my wife, Louisa Jaffe. So first, Louisa had to verify her service disability. This is a medical process and is protected by medical privacy laws. However the Centre for Veterans Enterprise does look at those records to verify that the owner of the business is, as claimed, a veteran with a disability. The Centre does not publish or share that information.

Assuming that you’ve registered your business properly and filed all of your paperwork, you can certify your status as a veteran online. Remember that your business will be reviewed on a regular basis to ensure that it is still owned and managed by the veteran – the protective class that the government is trying to protect by establishing these set-asides.

Certification can get you more customers and more contracts

By certifying your status as a special designation helps to get your business in front of the people who are looking specifically for, let’s say, a service-disabled veteran-owned business. Those are your customers. Because all agencies have to set aside a certain amount of business for these set-aside classes, there’s an incentive for them to want to find you. They are looking for you.

Under these programs, a certain amount of business (e.g., up to a limit of $4 million – that’s a LOT of money to a small business) can be awarded without any competition. In some cases they may publish a contract with set-aside competition, meaning that the contract is only for a specific type of set-aside business, e.g., HubZone companies, but any HUBZone can bid on it. Or a contracting officer could give you a sole-source directed award without any competition, on the sole basis of your status as a set-aside business.

That’s why you definitely want to go through the certification process if you quality. Just remember that making false claims about your status is a criminal offense. So don’t get greedy. Small businesses are still a protective class and there are set asides for you, too.


Large Businesses Want Appliances, Not Sub-Contractors

Securing business with the federal government takes time and persistence, even when you know exactly who your customer is. So it’s very important to use that time wisely. One of the mistakes that is easy to make is to put your time into places where there isn’t, in fact, any money or revenue to be had.

We’ve talked about OSDBUs (Office of Small and Disadvantaged Business Utilization) and how even though it’s a good idea to access their information, support, they’re not the ones who will actually hire you.

Today we’ll talk about who one of your customers actually is. Hint: It’s not the government agency that you’ll be doing work for (but don’t worry, we’ll talk more about them in future blog posts).

When your business is in its early stages, working as a sub-contractor for a larger company can be the easiest way to start. The large company already has relationships with customers, so you don’t have to find them yourself.

However, you can never forget that the large company wants revenue just as much as you do. And they know that to win a contract with the federal government, to comply with federal acquisition regulations they need to show in their proposal that they’ll be setting aside 23% (or more, depending on the job) of the contract to small businesses like yours.

You are extremely valuable to the large business in the proposal phase – as an appliance; you provide the details they can plug into the appropriate sections of the document to ensure they’ve shown their intention to allot a percentage of the contract to a small business.

The fundamental problem is that regardless of how much time you put into putting that proposal together, when it comes to actually awarding the work, that large business may or may not choose you. They may choose another small business, or they may even do the work themselves. Unfortunately, the set aside regulation is not always enforced.

Given all of this, the question becomes how do you ensure that you’re going to get work as a sub-contractor?

1) Have a clear teaming agreement in place (for more information about teaming agreements, see these articles on About.com and eHow.com). Attached to each teaming agreement is an Exhibit A, which details the obligations. If the work share isn’t guaranteed in your agreement, then there’s no guarantee you will get the work. In fact, it’s probably guaranteed that you won’t.

2) Build and maintain positive relationships with the large business’s program manager. THIS is your customer when you want to be a sub-contractor, since this is the person who runs the contracts. You should also get to know the small business/diversity people at the company. Lastly, keep the relationship triangle going between you, the large company and the customer.

3) Know your value proposition to the large company. Maybe you’re already on a program with their customer so you know the customer really well. Maybe you have special skills in using the application/tools that will be used on the project. Or maybe you’ve done a great job with my previous suggestion and you’ve built a really solid relationship with the large company.

If you haven’t built up credibility with the customer or with the large business’s program manager (PM), you’re at risk of losing the relationship once grow too large for the NAICS code size standard in that job. That’s because the large business can no longer claim you as their small business when they are obligated to recertify their contract option (mandatory once a year).

This “graduate-by-jumping-off-the-cliff effect” is one of the issues that organizations like Mid-Tier Advocacy are trying to alleviate.

In your case, be sure to build relationships with your customers, program managers and small business/diversity advocates as soon as possible, so that you’ll be able to keep your business after you grow.


Advocating for Mid-Tier Government Support Services Companies

We’ve been talking a lot about companies in the first stage of growth, but we also want to talk about others. Companies start to build momentum as they grow, yet that puts you in danger of growing bigger than the size standard of your industry area – according to the NAICS code(s) you selected when you registered your business.

For example, management consultants can have up $7 million in revenue and still be considered a small business, while for accountants the number is $8.5 million. Professional engineering companies can make $4.5 million and information technology companies can earn $25 million. There are a whole variety of standards based on the work you do.

These standards are meant to protect you and level out the playing field. For example, if you’re in management consulting, as a federally-recognized small business you’re competing only against other little companies. So what happens when you grow bigger than that number? You grow out of the small business protected area, and are thrown into competition with everybody else.

Once your management consulting firm makes more than $7 million, all of a sudden you’re in direct competition with companies like Booz Allen Hamilton, who makes billions of dollars per year. Whether your company earns $7.1 million or a $1 billion, you’re now in the same category.

Once you’ve grown bigger than the size standard, you’re considered a mid-tier company. You’re not big enough to be counted among the “giants” of the industry, yet you’re forced to compete with them.

Having noticed this inequitable situation, a group of mid-tier companies have banded together as the Mid-Tier Advocacy Group (MTA)  to lobby the government for support for second-stage companies and legislative action towards eliminating this competitive disadvantage.

TAPE, LLC, my own company, is on the Mid-Tier Advocacy council because TAPE, LLC is in the process of growing out of our own NAICS code size small business standards.

On February 7th, 2012, there is a meeting where the Mid-Tier Advocacy Group (MTA) will speak to congress about these issues. There will be speakers from House and Senate Small Business Committees, from selected Industry councils interested in small business and mid-tier, as well as from Government agencies.

MTA is working on legislation to establish a mid-tier set-aside, similar to the small business set-asides, and a pilot program has been proposed to “try this option out.”

Please visit this event registration page for full details and information about how to participate:

http://mtaluncheon-eorg.eventbrite.com/


OSDBUs are Good Friends to Have, But They Don’t Have Any Money

The Office of Small and Disadvantaged Business Utilization (OSDBU) is a position that’s created in almost every physical location and/or agency organization within the federal government. These folks are charged with a variety of missions that are devoted to small business success, whether you are a small business, an 8(a) (socially and economically disadvantaged) small business, a woman-owned small business, a veteran-owned small business, a service-disabled veteran-owned small business or a HUBZone business (located in a traditionally underutilized business area).

They serve you in three major roles:

1) Resource

The OSDBU can give you information about the agency/organization, such as their typical buying patterns and even a forecast of anticipated spending that covers everything from pencils to airplanes and everything in between.

2) Advocate

OSDBUs work directly with your customer (the government agency) to encourage them to designate contracts so that only small businesses can bid on them. Otherwise, contracts with an open requirement can be bid on by anyone, from a one-person business to a massive company like Lockheed Martin. OSDBUs help level the playing field.

3) Administrator

The federal government, through congressional action, has established a requirement that 23% of the money contracted through the federal government go to small businesses. The OSDBU monitors this and also assists small businesses to bid for the jobs that are reserved for them. They are a part of the internal agency review process that determines the “acquisition strategy” – whether the job will be set-aside for small business, or allowed to have “full and open” competition (i.e., anybody can bid, no matter what size). As the internal advocate for small business, the OSDBU works on our behalf to make sure the government gives a fair shake to small business.

So if you plan on trying to make money in the federal government, talk to the small business officer in your local area, whether that is an air force base, army base or a regional office. They can give you crucial background information about that agency or location, and can open doors by telling you who might have work that will be bid soon. Contracting Officers (COs) will come to the OSDBU for names of small businesses, since COs like to have three bidders on each contract. Get your small business included on that list of names!

Although they have a very important function to perform, the fact is OSDBUs themselves don’t have any money for you. They may know who needs contractors, but they are not hiring contractors. They have influence, they can be your advocate and they can help you, but they are not your customer. The customers are the people who have money. OSDBUs and their staff are nice people and they want to help you, but they can’t give you an actual contract. So keep working on finding customers, but in the meantime you also need to make sure the OSDBU office knows you, so make sure you stop by often.


ORCA the Whale

When the government wants to use a contractor, public policy dictates that they ask for specific information, such as:

  • What is the size of your business?
  • Do you deal in toxic chemicals?
  • Do you do business in particular countries?
  • Does your small business qualify for special status?
  • Have you filed your EEO-1 report with the U.S. Equal Employment Opportunity Commission?
  • Etc.

The government got tired of looking over all this paperwork, so they created an online system where they can find the answers to their questions. It’s called the Online Representations and Certifications Application system, or ORCA for short. Now we all remember the movie about ORCA the killer whale, except this ORCA doesn’t kill you, it saves you – time!

ORCA aggregates the basic data from the CCR, along with additional data from Dunn and Bradstreet. So as you go through and complete the different certifications that are required, they’re time-stamped and stored in the ORCA system.

That means that anytime you sign a contract response for a federal government contract, the agency can check the ORCA system to verify that you meet the criteria established in that particular posting.

So it’s not sufficient just to be in CCR, you have to also register in ORCA, where you will be asked for your DUNS number (Dunn and Bradstreet), as well as a Marketing Partner ID Number (MPIN) that is generated when you register in CCR.

Are you starting to see what I mean when I say that the fish don’t jump in the boat? Stay tuned, I’ll help you get all the right gear together.

Update, February 20, 2013: The SAM website (System for Award Management) has consolidated the registration tools at CCR/FedReg, ORCA, and EPLS. To find out how to register your business in SAM, check out the podcast and presentation put together by my friends at WIPP (Women in Public Policy).


Closing a Deal With the Federal Government Takes Time

In July, the CEO and a senior staff member of TAPE, LLC team attended the national conference of people who do acquisitions support for the federal government and work as contractors for the agencies. After one particular day of presentations and sessions, our senior staff member was letting loose on the dance floor. Her fun spirit was contagious and she made a lot of friends. One new friend just happened to be a senior government official, who in turn invited our team to come and visit his agency.

Lesson #1: Be yourself, have fun, be friendly and be open to new connections. You never know who you’re going to meet and where that meeting could take you.

This fellow was a pretty high-level official in the procurement function in that agency, which means he oversees the process of issuing requests for proposals and so on. In addition, they hire people to do acquisitions support, one of the types of  work that we do at TAPE, LLC. It took awhile to arrange the visit, and the meeting was rescheduled at least twice.

Eventually, though, the CEO, the senior staff member and the government official did sit down for a meeting. It was a productive meeting, even though this person isn’t actually responsible for making purchasing decisions – that is handled by mid-level government officials, not their bosses.

Through that meeting, though, this high-level official heard enough to be able to determine that our company could help their agency, and he suggested we speak to someone else.

Lesson #2: Be persistent. Don’t give up just too quickly if you don’t reach your goal right away.

We arranged a meeting with that person, who in turn was promoted shortly before our scheduled meeting, and therefore was also no longer the one making actual purchasing decisions. So we were sent to a third person altogether.

We made the appointment, showed up the meeting, and the person we were meeting with had to go to a doctor’s appointment. So we sat down with a fourth person, one level down from the person we were scheduled to meet with.

This is not a unique situation. This is how things work when you’re doing business with the federal government. You’ve got to keep showing up and talking to the real customers – the ones with the money and the decision-making power.

This fourth person we met with had only been on the job for short time; he was brought on to support the woman who’d been recently promoted to replace the one we were initially referred to. Already, though, he knew he had requirements for things we could do. And not only that, but he knew about people in his old agency who we could also support successfully. He also told us a gem of information that we did not know before, about how his organization processes their annual budget money, specifically how they handle the money that doesn’t get spent by the end of the year.

This is the way it goes. And it goes this way again and again and again. And we still have more meetings to go to; this story is not over yet.

I’ll continue to update you on this story to see if we actually get any money out of this. These things have a long life cycle, and someone else may come along who is better or cheaper than us. You just never know. We could go through all these steps and still hit a roadblock down the line.

The federal government has a lot of money to spend on doing business with small businesses. The ones who get those opportunities, who survive, thrive and grow, understand that it takes time and persistence to succeed in this arena.

Take the time, enjoy the ride, play on!


How to Register Your Small Business

The first step in doing business with the federal government is to get a D-U-N-S number from Dun and Bradstreet. Next, every business doing business with the federal government has to be in a database called the CCR – Central Contractor Registry. It’s clearly laid out, but it may take you awhile to complete the steps. Don’t worry, though – as soon as you start the process, you’ll get a temporary registration so that you can leave and come back to finish filling in the different screens.

One of the fields you’ll have to fill in is your North American Industrial Classification System (NAICS) code(s). This is the system of classification that federal government agencies use to find businesses that provide a particular service. As well, each NAICS code tells you how big that particular type of business can get and still be considered a small business.

You may have more than one NAICS code, for example under information technology there’s a code 541-512 for systems design, and there’s another one 541-513 for system implementation. TAPE, LLC is listed in both of those. Initially there is space to register 10 codes, and you can add more later.

When you’re done with the Central Contractor Registry process, you will get a Commercial and Government Entity (CAGE) code. This code will uniquely identify you as ONE company entity that encompasses all of your locations, divisions, etc.

We’ll talk more about CAGE codes, maintenance dates and ORCA. No, not ORCA the whale – stay tuned!

Update, February 20, 2013: The SAM website (System for Award Management) has consolidated the registration tools at CCR/FedReg, ORCA, and EPLS. To find out how to register your business in SAM, check out the podcast and presentation put together by my friends at WIPP (Women in Public Policy).


The Fish Don’t Jump in the Boat

Welcome.

The purpose of this blog is to provide an experienced perspective to companies that are trying to do business with the federal government, amidst a very difficult economic marketplace of declining federal budgets.  

Who am I to be offering this experience? I'm Bill Jaffe, a co-founder and the Senior Vice President/General Manager for TAPE, LLC. Prior to TAPE, I had more than 25 years of consulting, management and commercial executive-level industry experience, with more than 20 years in the federal sector as a program and project manager, business developer, and senior division executive.

You can read more about me on the TAPE website, but what you really need to know is that I've taken three different companies to the top 5 of the Washington Technology Fastest Growing Companies list. I've learned a thing or two about success, and I want to share them with you via this blog.

We'll cover some of the most basic steps in doing business with the federal government. We'll also look at some of the more sophisticated processes that the most successful companies are using to stay out in front.

The money is out there, but the fish won't jump in the boat

The underlying message I want you to get is that just because you're eligible to do business with the federal government, it doesn't mean they're going to start throwing money at you.

Yes, it's true that small businesses get special acquisition consideration from the government. 23% of federal contracting dollars are earmarked for small businesses, including those with the additional special status, whether it be  an 8(a) business (socially and economically disadvantaged), a service-disabled veteran-owned business, a woman-owned business or a HUBZone business (located in a traditionally underutilized business area).

That's great news for small businesses, right? It is until you consider the fact that there are more than 600,000 other small businesses who qualify and are doing business with the federal government, from the guys who cut the grass on military bases to the folks who clean the offices in federal buildings, to companies providing highly sophisticated technical or engineering services.

There are many ways that people get business from the federal government, and we'll talk about them on this blog. But the bottom line is that they all DO something.

Stop trying to fill your freezer and just put some dinner on the table

Successful government contractors know who THEIR customers are, and what value they offer these customers. They don't try to catch a freezer full of fish by being everything to everybody. They hone in on their specific skill set and work to find the open bids for those related jobs.

The bonus is that you no longer have to think about those other 600,000 businesses as your competitors. In reality, there are only a small percentage of them who are competing for the same contracts that you are.

Instead of thinking about doing business with "the government," pare that down to ask: Who is your actual customer?

Once you're clear about that, we can get down to the work of how to do business with them.

Ready?


css.php