Is the government giving small biz a fair shake?

August 31, 2009


Last year was a record for small businesses, which scooped up more than $93 billion in federal contracts, a $10 billion jump from a year earlier, according to a report by the U.S. Small Business Administration (SBA).

It’s good news to be sure, but critics are already grumbling that the government only allotted 21.5 percent of its promised 23 percent target to small businesses for fiscal 2008.

Key among their complaints:

* High costs: Small businesses often opt out of the running for government contracts for fear that they can’t absorb the proposal costs that can run as high as $25,000 to $500,000, The Washington Post reports.

* Misrepresentation: Critics say large businesses have been known to fudge their size and scope to win contracts intended for their smaller counterparts, and urge government to penalize companies that do so.

* Poor enforcement: Small businesses are calling for a tougher crackdown on government agencies that fail to meet their contracting requirements. (The SBA report shows that only one agency actually met its goal.)

Has your business lost out on a lucrative government contract? If so, what should be done to ensure small business get their fair share of work? Share your story below.

One comment

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I see the biggest obstacle for SMBs to be the relative absence of a history with government contracting, or with the government agency seeking the work, compared to larger and more established contractors. Agencies are risk-averse, and want to choose a safe option, even if it may cost slightly more. SMBs need to get creative and demonstrate their value to the government, even if prices are lower than the larger competition, because the government agencies are usually required to factor in past performance on similar contracts. One strategy: find larger companies with the performance history or the agency relationship and team with them for a portion of the work. Although you won’t get the whole contract, you will start a good relationship with a prime contractor, may start a good relationship directly with the customer, and certainly will start building a good track record with the agency. And, if you see a solicitation or RFP that is not set aside for small businesses, but contains a piece of work that could be done effectively by a small business, reach out to the SBA and encourage them to contact the agency. They might not be able to change the contract to a “set aside,” but it may get them thinking the right way for the next similar opportunity. Some other helpful hints: 2009/09/big-government-small-business.

Posted by Jeffrey Belkin | Report as abusive