News
Getting the job: Advisers Help Small Businesses Land Government Contracts
April 30, 2007
OKC Business
By Mallery Nagle
(Front Page)
Every quarter, the U.S. government awards billions of dollars worth of contracts to civilian businesses. Although defense contracts top the charts, just about any business could land a lucrative contract from its very own Uncle Sam.
“The government needs everything a private corporation does,” said Phil Busey, president and CEO of the Busey Group of Companies, a local firm that advocates for small businesses. The company, government contractors itself, brings corporate, commercial, government and Native American expertise to its clients.
“They need lots of services – janitorial, landscaping, trucking and painting,” he said, “even office products.”
Busey explained the government mandates that at least 20 percent of its contracts be granted to companies owned by women or minorities or to small businesses.
Busey calls this a win-win situation because small businesses offer lower overhead, flexibility and quick response to the government. The contractor wins because, he said, government contracts offer a means to business growth.
“The No. 1 thing to do is to identify your core capabilities,” he said is his advice to clients interested in pursuing government contracts. “Identify the services you feel comfortable expanding.”
Once a core competency has been established, Busey said a company must apply for a Dunn’s number. This is an identification code issued by Dunn and Bradstreet which the government utilizes in its database to find potential contractors.
Database entries include company’s name, NAICS code and identifies it as a woman- or minority-owned or a small business.
“These administrative matters are not difficult, but they are required,” he said. “And this is when the work begins. You can’t just hang your shingle out and automatically get a contract. You have to actively market your business. It’s not a build-it-and-they-will-come situation.”
Proving yourself
Marketing, he said, includes establishing a track record.
“I don’t want to discourage emerging businesses, but you have to show what you’ve done,” he said.
Busey suggests finding a “mentor” company and serving as subcontractor for them in order to establish a reputation.
“You need to identify resources to develop relationships,” he said. “It takes perseverance.”
These relationships also offer advantages to both companies. Busey said the smaller company offers an important service to the larger company, and the larger company offers a means to developing a record of past performance.
He said the National Small Business Association showed that private industry spent $95 billion with small and minority-owned businesses in 2005. Despite this figure, he estimated that 80 percent of would-be contractors meeting with corporate diversity officers for such joint ventures never return for follow-up.
An opportunity for growth
Busey said government contracts can help small businesses grow because they are usually five to seven years in duration.
“It’s a guaranteed source of revenue, cash flow, while you branch out to commercial markets,” he said, adding that come private companies can be slow to pay their bills, which can cause a financial burden on emerging firms.
Richard Burpee, president of RAB Enterprises LLC, a firm that consults with private businesses seeking government work, agrees. Burpee is also a retired Air Force Lieutenant General. His 37 years of experience with the government makes him an expert in doing business with Tinker Air Force Base and Homeland Security.
“The government doesn’t have the resources or the people to get their day-to-day business done,” he said. “These contracts are good for the government.”
He echoes Busey’s sentiments, however, when it comes to actually landing that first job, things can get a bit trying, he admits.
“The government is not easy to work with,” Burpee said. “The requirements to satisfy can be confusing. It’s very difficult to get that initial contract. The government is very conservative and they don’t want to assume any risk – and rightly so.”
Once the government has confidence in a contractor, however, follow-up business can be easy to get, he says.
“The government may seek you out,” Burpee said. “But you have to perform as advertised – 100 percent.”
Help wanted
Carter Merkle, program manager for the Oklahoma Bid Assistance Network, says federal, state and local governments are always looking for new vendors.
OBAN offers assistance to companies seeking all levels of government contracts through 18 technology centers statewide. He called the number of opportunities “overwhelming.”
“People don’t realize that governments are like little cities. They buy everything,” Merkle said. “Companies can become hopelessly bound down by the avalanche of requests from the government.”
In addition to helping clients establish themselves as government contractors, OBAN assists established contractors sort through the volumes of queries issued daily. Merkle said the agency has a computerized system that sends the requests to the appropriate client.
OBAN also offers a database of procurement history of the various government entities to help clients develop a strategy.
In addition to being owned by a woman or minority, Merkle said the government also seeks to do business with companies carrying certain Small Business Administration certifications.
Firms located in a Historically Underutilized Business, or HUB, Zone or an 8 (a) area, which is in an economically disadvantaged vicinity, are given a “leg up” when contracts are granted. Merkle noted that because much of Central Oklahoma is formerly Indian land, it qualifies as a HUB Zone. Certain areas in Bricktown qualify, as well.
OBAN figures show that between mid-2005 and mid-2006, its 1,800 clients secured $442 million in government contracts, and Oklahoma Department of Labor figures show the contracts created or saved 7,844 jobs in the state.