Recommended Book Reviews
Gems of Wisdom for Increasing 8(a)BD Competitiveness
by Sharon T Freeman, Ph.D. and M Charito Kruvant
Review by Denise D Jensen, REDE, Inc.
Table of Contents
Business Development Resources
OSDBU Impart Gems of Wisdom
Procurement Facilitators Impart Gems of Wisdom
Acquisition Team Facilitators Impart Gems of Wisdom
Mentors & Protégés Impart Gems of Wisdom
Business Development Resources
Federal contracting with Small and Disadvantaged business – an historical perspective also know as Reconstruction Finance Corporation (RFC). In 1932 it became Public Law to assist both large and small businesses that were hurt from the great depression and WWII. In 1942 Government created Smaller War Plan Corp to provide loans to private entrepreneurs and small businesses. This was dissolved after the war and turned over to the RFC.
The SB Act of 1958 authorized the SBA to enter into agreements with other federal agencies in order to grant sub-contractors to SB’s. Then in 1969 the law was modified to direct federal procurement contracts to minority owned Small Businesses. In 1978 it was required that federal agencies SDB’s have a maximum opportunity to participate in Federal Contract.
In order to participate you have to be “Small” as defined in SBA regulations and 51% owned by Blacks, Hispanic, Asian Pacific Americans, Sub Continent Asians and Native Americans – in addition, the participant must prove economic disadvantage.
In 1978 the OSDBU was created and was given procurement powers at each federal agency. Between 1968 and 1998 it was recognized that measures were needed in order to make contracting opportunities more assessable to minority owned firms resulting in the SBA’s 8(a) Business Development Program and 8(a) Business Development Mentor – Protégé Program.
OSDBU Impart Gems of Wisdom
Ralph Thomas, former NASA OSDBU Director prepared a document “Model Code of Expectations” which set for guidelines for what the OSDBUSs should do for clients and what clients should do when requesting assistance. They are “common sense” expectations
The OSDBU cannot:
Promise anyone a contract
Provide government-proprietary information
Share third party proprietary information
Direct large contracts to provide jobs
Help write/review proposals to be submitted to the OSDBU’s agency or any other government agency
Act in a manner that is tantamount to acting as an agent of the small business
Four essential questions 8(a)BD’s business must keep in mind when seeking business is:
Does the agency buy what I sell?
How does the agency purchase it?
When does the agency purchase it?
Who in the agency purchases it?
In the face-to-face meeting you should focus on past performance not corporate qualifications. Highlight what you have done, and how it relates to what they are looking for. Keep your speech short and to the point.
Verl Zanders who served as Director of Small Business programs at the Office of the Secretary, US department of health and human services (HHS) adds a fifth question that you need to keep in mind.
Who is the agency buying it from?
Zanders believes that 8(a) BD firms should look for models and not a mentor. He believes a model is a firm that is in a similar line of business but which has the benefit of more experience and success under his belt.
One example of an OSDBU website is the Department of Homeland Security (DHS). In 2007 DHS small business goal was 30% out of which 4% was for 8(a)BD firms. Most websites have very informative information such as
Small Business Points of Contact:
Small Business Specialist – The points of contact
The OSDBU Staff with overall information
Frequently Asked Questions (FAQs)
Forecast of Contract Opportunities – Projections of all anticipated contract actions above $100,000
Vendor outreach Sessions (VOS) for the Fiscal year
Small Business conferences – Attended by the Sites OSDBU personnel
Mentor-Protégé Companies – Points of contact are given
8(a) BD Competitive Current Opportunities. Points of contact are given for pre-solicitation notices
Forecasts of contract opportunities are also provided on agency websites.
The U.S. Department of Energy is the largest civilian buying agency with its OSDBU’s goal to help find small firms to get a piece of over $22 billion each year. In 1991 the DOE started a pilot program that targeted 8(a)BD business for procurement opportunities at subcontract level and allowed flexibility to its major business concerns and created additional way for them to access the economic mainstream. In the first year of operation they achieved $167,182, and today it has grown to more than $150 million annually.
The main benefits from “The Program” is;
Participants can receive sole-source contracts up to $3.5 million for goods and services, and 5.5 million for manufacturing
Participants can bid/propose on competitive procurements above $3.5 million for goods and services and above $5.5 million for manufacturing proposals that are set-aside for 8(a)BD participation only.
Participants gain a prime position to market private section firms to become a protégé.
Participants gain a prime position to partner with its private section prime contractors in order to obtain future procurement opportunities.
Eligible participants for the Program include:
8(a)BD businesses and other small disadvantaged businesses
Service disabled veteran owned businesses
Historically Black College and University HBCUs) and other Minority Educational Institutions.
Requirements for being a Protégés:
Must be a small business certified as an 8(a) business, other small disadvantaged, a women-owned small business, service disabled veteran-owned small business, HUBZone small business, HBCU or minority educational Institution
Must be eligible to receive government contracts
Must have been in business for a period not less than 2 years prior to application
Must be able to certify as a small business according to the North American Industrial Code for the services or supplies to be provided by the Protégé under the subcontract with the Mentor.
Examples of Development Assistance Provided by Mentors:
Management guidance relating to:
Overall business management planning
Business development and marketing assistance
Engineering and other technical assistance;
Noncompetitive award of subcontracts under federal contracts where otherwise authorized
Award of subcontracts in the mentor’s commercial activities
Progress payments based on costs
Rent-free use of facilities and/or equipment owned or leased by mentor;
Temporary assignment of mentor personnel to the Protégé for purposes of training
The Mentor-Protégé program is a win-win for both. This gives the Mentor the ability to be involved with set aside small business and the protégé wins by learning important business develop tools such as proposal writing, project management and scheduling along with a list of other skills and knowledge needed.
It is not clear how many federal agencies have Mentor-Protégé programs however, the following agencies do; The Department of Defense, Energy State, US Agency for International Development, NASA, the Air Force, Homeland Security and Transportation.
Despite doing your homework creating a mutually beneficial Mentor-Protégé agreement is easier said than done. The agreement must ensure that the Protégé receives the mentoring it needs, while also ensuring that in accordance with regulatory requirements, the Protégé is involved in a “Significant” portion of the work under contract.
The DOE has Mentor-Protégé agreements on the shelf ready to be activated in order to meet their goals.
In order to succeed you must build your relationships. The best way to do that is through the outreach and network events OSDBUs sponsor. Those are listed on the websites and has proven valuable in meeting other agencies and contacts.
It’s not credible to claim you can do it all. Find your niche and concentrate on that.
The most important Gem of Wisdom to pass on is “one must never forget the human touch in dealing with people.
Procurement Facilitators Impart Gems of Wisdom
PCR – Procurement Center Representatives – increase the small business share of Federal procurement awards by initiating small business set-asides, reserving procurements for competition among small business firms, providing small business sources to Federal buying activities, and counseling small firms. In addition, PCRs, advocate for the breakout of items for full and open competition to affect savings to the Federal Government.
PCR’s are there to assist you. These individuals do not employed by the agencies in which they work, but are employed by the SBA. There task is to identify contacts and talk to the OSDBU to try and convince them to offer the proposal to small businesses. Because of the volume of procurement proposals they do not know of the opportunities that are out there. Because of that, small businesses not just rely on them, but should do their own research and if they find something then you should bring it to their attention and ask for their assistance.
The SBA also has what is called Breakout procurement center representatives. Those individuals address substantial agency purchases. According to FAR 19.403, the SBA is required by law to assign a breakout procurement center representative to each major procurement center. That is defined as a procurement center that purchases substantial dollar amount of commercial items and has the potential to incur significant savings as a result of having a representative.
These individuals are the advocate for the appropriate use of full and open competition and the breaking out of items while maintaining the integrity of the system in which such items are used. If you have a breakout procurement representative assigned to a center it is required that the SBA also assign two (2) collocated small business technical advisors.
You must also deal with Contract bundling, which is where the agency takes several small contracts and bundles it into one large contract. That is usually done when the agency considers the small contract would be unsuitable for award to a small business. It is also done due to the fact that acquisition managers are simplifying procedures for acquiring products and services.
CMR – Commercial marketing Representatives – are stationed in area office, conduct compliance reviews of prime contractors, counsel small businesses on how to obtain subcontracts, conduct matchmaking activities to facilitate subcontracting to small business, and provide orientation and training on the Subcontracting Assistance Program for both large and small businesses.
In 2002 the GAO completed a study and concluded that the CMR roll needed to be strategically planned an assessed.
Acquisition Team Facilitors Impart Gems of Wisdom
In order for a company to be successful at showing the government that you understand the federal government marketplace and that you have the systems and internal management to comply with them. Having the knowledge and know-how of how the system works is one thing it is another to convey this to the government. You must maintain constant contact, know the procurement forecast and have your key players in the network to let them know what the company has done. If a company is knowledgeable and adheres to the governments accounting principles, then you are one step ahead.
Over the years the types of contracts the government issues have changed. They no longer issue contracts for just ships, airplanes and weapon systems. Now they issue contracts for Technology, supplies, consultants, administrative support and financial system support. Since the number of Contracting Officer Representatives has not grown at the same pace as contract, contracting officers are using Contract Bundling. With this bundling companies must now look for partners so they can be included in the larger contracts.
There are 3 stages to a contract;
Contract Planning – The need is determined, the requirement is analyzed, the extent of Competition is determined, Source Selection Planning occurs and the Solicitation Terms and Conditions occur here.
Contract Formation – This is where the solicitation of others, the Bid Evaluation, Proposed Evaluation and Negation and Contract Award take place.
Contract Management – Starts with the Initiation of Work and Contract Administration, the Inspection and Quality Assurance, Contractor HR Management Payment and Account along with Modification and Special Terms happen. The final stage is Contract Closeout or Termination of the contract.
The four outcomes a COR looks for in order to conclude the contract performance has been successful are, 1) Quality, 2) Timeliness, 3) Completeness and 4) Costs
When dealing with government you need to use good old common sense. Good Government Contractors –
Facilitate Good Communications
Understand Agency Requirements
Always Meet Deadlines
Know Their Cost and How to Manage Them
Base their prices on their Costs
Profits Come From Well-Negotiated Fees
Know how to Plan in Advance in Moving to a New Accounting System
Have Well Qualified Accountants and Contract Negotiators.
Mentors & Protégés Impart Gems of Wisdom
They talk a lot about Mentors & Protégés in this book. They emphasis in this section your company’s reputation. You must have a good reputation before another firm would be willing to do business with you, be it large or small.
The 2003 report issued by Hill & Knowlton and Korn/Ferry showed that 60% of the CEO thought that the company’s reputation was more important than it was in 1998. This same survey asked “What are the three most important business objectives that you company’s corporate reputation helps you achieve? Seventy three (73) percent said Recruiting and retaining employees. Sixty one (61) percent said Promoting transactions and strategic partnerships and fifty six (56) percent of them said Increasing sales.
In a Mentor – Protégé partnership you must continue to work and communicate. It takes both companies to make it work. Even if you are the Protégé, you must still do your due diligence to ensure your mentor has the experience in federal contracting. You must both have the same definition as to what a Mentor – Protégé is as well as define who in the Mentor’s firm will be in charge with interacting with the Protégé firm. A Mentor wants their Protégé to add value and there must be room for the Protégé to grow. This program is a two way street. The Protégé is not the only one that gains from this program, the Mentor will be able to gain access to contracts through the Protégé making it a win situation for both firms.
Over time the Mentor – Protégé relationship will change. Eventually the Protégé will gain knowledge and will be financially stable on its own and will hopefully become a Mentor for an 8(a)DB who is looking for a partner to help them.