“SMALL TO FEDS” By Ken Larson
“Most small businesses, particularly those selling services, will encounter the need to team with industry partners in small business federal government contracting. Be prepared for challenges and the risks.
Exclusivity is the practical way to go on any given program. Team early and exclusively by opportunity, then give it your all and be a winner. Your reputation is key, ethics count and your customers as well as your industry are observing you.”
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“As a prime contractor, a supplier or a subcontractor, the need to carefully develop stable relationships is a prime driver for success in the government contracting venue.
HARD FACTS ABOUT THE ENVIRONMENT
Be prepared to encounter challenges in the areas discussed below. They are presented because they occur enough that you should be aware of them. It is astute to manage the associated risks.
Initial challenges for the small business in government contracting are not so much in the areas of barriers as they are in lack knowledge (which I concede is a form of barrier but one that can be dealt with). In short, be aware of what you do not know you do not know.
Lack of knowledge goes all the way from local and state employment law to federal contracting rules. Enough small businesses have succeeded in the venue that it has proven small enterprise education, with trained personnel in government and prime contractors to do so, greatly enhances success.
Contracting officer’s, either government or corporate, and their staffs are often not equipped in the skills necessary to guide the small business.
Large business and government agencies often inadvertently take advantage of the small enterprise lack of knowledge or make poor assumptions regarding what a small business knows. This can lead directly to abusive practices.
A prime example of an abusive practice is large corporations signing teaming agreements during proposal efforts and then not awarding subcontracts to the small enterprise as agreed, keeping the majority of work for themselves. They then recruit the help away the small enterprise.
Agencies often take extended time frames to put in place prime contracts after source selection and award to a small business. They do not realize that a small enterprise does not have deep pockets and must have cash flow to sustain a new program with new employees.
Funding levels on programs are often insufficiently committed and the small enterprise is not adequately informed about limitation of funds and funding exposure.
One of the most common traumatic situations is newly established enterprises having no job cost government compliant business system in place. The industry partner(s) or the government have assumed that capability will materialize and when it does not the government audits the bills, finds no backup and shuts down the cash flow until the system is fixed. At that point the business can fail. The company should have become educated much earlier in the process about these requirements.
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