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How the government mitigates the risk of hiring a small business.
caucasian businessman with laptop and approved stamp 3d
© Tommi – Fotolia.com

A small business procurement is often a risky proposition for the government, especially if the function that has been performed by a large business with lots of back up. In that case, the government can be confident that their contractor can always pull in a subject matter expert at a moment’s notice.

If I’m building a missile, for example, I want to be assured that the contractor has access to a guidance expert and the funds to pay for their help. The risk is that a small company will only work with the people they’ve got, and don’t build the cost of any extra people into their bid.

In some number of cases during the procurement process, the government gets down to the person whose proposal seems the best, but these kinds of risks may stop them from wanting to go forward. One of the ways they can mitigate that risk is with a Certificate of Competency.

The agency’s program office will ask the Small Business Administration to conduct an investigation into the small business applicant – not their proposal, but their ability to perform. This includes a look at the financial and managerial competence of the people running the business, and how the business functions.

I once saw a statistic that almost 75% of companies asked for a COC do not get it. Whether that is still true or not, I strongly urge anyone in this situation to find someone who’s been through it and can advise you from real experience – there will be a lot of issues raised and you don’t want to stumble.

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