Agency Migration to Small Business PreferencePosted: June 22, 2016
In a previous post, we looked at the Small Business Administration’s FY2015 Small Business Scorecard for how federal agencies did in meeting their goals to set aside a specific percentage of contracts and award them to small businesses.
So one of the things we can see is we’ve got five departments that achieved 40% or more: Agriculture has 50%, Interior 55%, Transportation 51%, State 44% and Commerce 43%. In addition there are several in the 30s.
Five years ago, none of that would have been the case – departments issuing 30-55% of their total acquisition for the year to small businesses was simply unheard of. Today there is a true migration towards more and more activity, including very robust contract sizes, being awarded to small businesses. This is clearly represented in the scorecard.
I think this trend will continue, and there are several things that growing and mid-sized small businesses need to understand to be ready. As it always comes back to on this blog, it’s all about relationships. Here are some specific relationships to think about:
- Large business partners and bigger small business neighbors – When they are awarded some of these robust contracts, they are going to want to flip them to other small businesses. They’ll keep a share, of course, and though they can’t get more than a 49/51 split, this still gives them a piece of the revenue and can be a win-win-win for all sides (you as the small business, the bigger business, and the end customer).
- Potential mentors and/or protégés – Another thing that we are tracking is the emerging regulations on extending mentor-protégé joint venture arrangements to all specially certified businesses as well as regular small business, where this was previously limited to 8(a) businesses.
- Small business partners – It is important to build early and often good solid relationships with your competitors that are doing the same kind of work. In fact, if one of your partners already has previous relationship and experience with a customer, that will count towards your joint bid for new business with that customer.
- Seemingly limited departments – Use the scorecard to focus on the departments that are clearly moving more and more work to small business. For example, Interior and Agriculture may have awarded small amounts compared to the giant amounts spent at DoD or Homeland Security, but when you look at the percentages these are no longer less desirable prospects. It is possible to design a robust portfolio and pipeline of opportunities from agencies you may have previously thought of as limited.
As you do your strategic planning, look at these entities and percentages and make some decisions – not just about who your prospects are but who your partners are. Consider whether you will build a true mentor-protégé partnership with bigger companies, and also whether you’re in a position to mentor another small business or mid-sized small business.