Government Procurement–Based Funding

The United States federal government is the largest purchaser of goods and services in the country, and more than $100 billion in federal procurement contracts annually goes to small businesses. State and local government agencies, too, buy a substantial amount and variety of products and services from a wide range of companies, including small businesses.

Government contracting and subcontracting can help launch or accelerate a small business. The guarantee of ongoing revenue provided by a government contract, which can extend three or even five years, can help stabilize cash flow. The stature of being a government contractor can help attract commercial clients and secure financing to operate or expand the business.

But bidding against big corporations for government contracts is a formidable task. To level the playing field, the federal government, as well as virtually all state governments and many local governments, have established programs that “set aside” certain procurement contracts for small businesses. Those set-asides are sometimes mandated but are more often “preferred” goals.

Those set-aside goals might open the gates to the government contracting playing field, but they don’t exactly level the playing field. Selling to the government is much different than selling to the commercial sector, and competing for government contracts poses significant challenges for small businesses. The government procurement process, especially at the federal level, involves navigating a maze of complex rules, regulations, paperwork, and procedures. Every federal agency has different set-aside goals and contracting procedures. Likewise, every state and sometimes individual counties and/or cities within a state have their own procurement requirements and processes.

In recognition of this reality, multiple programs have been established to provide procurement education, advice, and assistance at no cost or low cost to small businesses. Getting free or substantially discounted business assistance that enables you to create a new revenue stream—saving money on the resources needed to make money—is a great funding opportunity!

FEDERAL PROCUREMENT PROGRAMS FOR SMALL BUSINESSES

The US Small Business Administration (SBA) oversees federal small business procurement programs and works with 24 federal agencies toward the goal of awarding 23 percent of prime government contracts to eligible small businesses. Of that 23 percent, 5 percent is reserved for small disadvantaged businesses, 5 percent for women-owned small businesses, 3 percent for service-disabled veteran-owned small businesses, and 3 percent for small businesses in historically underutilized business (HUB) zones.

The SBA and its partnering agencies and organizations offer procurement assistance programs to help small businesses:

•    Determine whether the company offers products and/or services the government buys and has the resources to provide those goods and/or services

•    Get the proper certification(s) to participate in federal government contracting programs

•    Receive business training and mentoring to learn how federal contracting and subcontracting work

•    Qualify for exclusive set-aside and sole-source contracts

•    Partner with established contractors as a subcontractor

•    Identify and bid on federal contracting opportunities

All companies that wish to participate in SBA procurement assistance programs must be certified by the SBA as a small business enterprise.

In addition, the SBA oversees the following small business contracting programs.

•    8(a) Small Disadvantaged Business Development (BD) Program. Offers procurement assistance and contract opportunities to small businesses that are at least 51 percent owned and managed by an economically or socially disadvantaged individual. Requires SBA small business certification and 8(a) BD certification.

•    Historically Underutilized Business Zone (HUBZone) Program. Offers procurement assistance and contract opportunities to small businesses located in economically depressed areas designated as HUBZones. Requires SBA small business certification and HUBZone certification.

•    Service-Disabled Veteran-Owned Small Business Program. Offers procurement assistance and contract opportunities to small businesses that are at least 51 percent owned and managed by a US veteran with a service-related disability. Requires SBA small business certification.

•    Women-Owned Small Business (WOSB) Program. Offers procurement assistance and contract opportunities to small businesses that are at least 51 percent owned and managed by a woman. Requires SBA small business certification and WOSB certification.

To take advantage of the SBA’s federal procurement opportunities for small businesses, one must first learn how to contract with the federal government, which is a complicated process, and secure the appropriate certification(s). Many for-profit companies offer government contracting training, certification, and consulting—for a price, often a hefty price. Why pay a premium price for federal contracting assistance from a private company when several federal agencies and some nonprofit organizations provide top-notch federal contracting education, certification, guidance, and technical assistance—at no or nominal cost to small businesses? Following are some great sources of free and affordable federal procurement assistance.

•    Minority Business Development Agency (MBDA). The MBDA, an agency of the US Department of Commerce, operates 28 MBDA centers around the country, each of which is focused on promoting the growth of minority business enterprises (MBEs) in that respective region. This includes providing free assistance to clients in acquiring 8(a) and other relevant procurement certifications, understanding government contracting processes, and identifying and accessing federal (as well as state, local, and commercial) contracting opportunities.

•    SCORE. Supported by the SBA, SCORE is a nationwide nonprofit organization offering no-cost and low-cost business counseling provided by a network of more than 11,000 volunteer mentors. SCORE mentors with expertise in government procurement are available at SCORE offices throughout the country to provide advice and assistance to startups and small businesses interested in government contractor or subcontracting.

•    SBA Commercial Market Representatives. Located in six offices around the country, commercial market representatives (CMRs) help small business owners find and bid on subcontracting opportunities through prime contractors with federal agencies. A CMR directory is on the SBA website.

•    SBA Learning Center. The SBA website’s Learning Center has a free online course that helps small businesses understand the basics of federal government contracting. The SBA website also features a Contracting Guide that covers the basics of small business contracting with the federal government.

•    SBA Mentor-Protégé Program. This program matches a certified 8(a) small business (protégé) with a corporate business executive (mentor) for the purpose of enhancing an 8(a) firm’s capabilities to successfully compete for federal government contracts. The mentor, or Business Opportunity Specialist (BOS), provides multiple forms of support, including business development, technical training, financing, subcontracts, and assistance in securing and fulfilling prime contracts.

•    SBA Procurement Center Representatives. Through offices in six key areas around the country, a network of procurement center representatives (PCRs), each specializing in contracts awarded by one or more specific federal agencies, provide procurement counseling to small businesses and assist small businesses with the contracting process and payment issues. A PCR directory is on the SBA website.

•    SBA Procurement Technical Assistance Centers. This network of almost 100 Procurement Technical Assistance Centers (PTACs) with 300 offices nationwide is the go-to source for small businesses who do or want to contract with federal, state, and/or local government agencies. (Both the Association of PTACs website and the SBA website feature a director of PTAC locations.) Each PTAC offers one-on-one government-contracting assistance at no cost or nominal cost. A PTAC counselor in your area can help you to:

•    Determine whether your business is ready for government contracting

•    Get the appropriate certifications

•    Register your business in various government procurement databases

•    Market your business to government agencies

•    Find and bid on contracts

•    Measure your performance and comply with contract audits

•    SBA Small Business Development Centers. Your local SBDC business counselor can provide you with free government contracting advice and connect you with local sources of government contracting training and assistance.

•    SBA Women’s Business Centers. Each of the 100+ Women’s Business Centers (WBCs) across the United States works with local SBA offices and community partners to provide women entrepreneurs with free counseling and assistance with all aspects of business development, including government contracting.

STATE AND LOCAL GOVERNMENT PROCUREMENT PROGRAMS

Your local Procurement Technical Assistance Center (PTAC) can help you register with your state, county, or municipal procurement agency, research potential contracting opportunities with that agency, and respond to contracting opportunities that align with your business. To find a PTAC in your area, use the searchable PTAC directory on the Association of Procurement Technical Assistance Centers website.

You can also visit the procurement office or website of your state or local government to find out whether it has a small business procurement program and, if so, the rules and other details of that program. In most cases, there are no or nominal fees to apply and to register for a state or local small business contracting program. Some state and local procurement offices offer free orientation and training for small business contractors or will refer you to the local PTAC, SBA, SBDC, or SCORE office for government procurement training and counseling.

Following are examples of state, county, and municipal small business procurement programs.

Texas Economic Department

The state government of Texas requires all Texas state agencies to “make a good faith effort” to award contracts for construction services and commodity purchases to qualified small business enterprises that are certified as historically underutilized businesses (HUBs). The Texas Comptroller’s office administers the State’s HUB certification and registration process. To obtain HUB certification, the business must be:

•    A for-profit entity, located and operating in Texas, that meets the size standards prescribed by Texas Administrative Code

•    At least 51 percent owned and operated by a resident of Texas who is an Asian-Pacific American, Black American, Hispanic American, Native American, American woman, or service-disabled veteran

In addition, the Texas Department of Transportation (TxDOT), as an agency funded by the U.S. Department of Transportation, has a Disadvantaged Business Enterprise (DBE) program that awards contracts to eligible SBA-certified minority-owned and women-owned small businesses.

The Texas Economic Department refers small businesses to local SCORE mentors, SBA Small Business Development Centers, and Procurement Technical Assistance Centers for government procurement training and counseling.

Cuyahoga County (Ohio) Office of Procurement and Diversity

The Cuyahoga County government seeks to award contracts to certified small business enterprises (SBEs), minority business enterprises (MBEs), and women business enterprises (WBEs). To qualify, an SBE must be located and doing business in Cuyahoga County, and an MBE or WBE must be located and doing business in the Cleveland Contracting Market, which includes Cuyahoga, Geauga, Lake, Lorain, Medina, and Summit Counties.

The County has its own SBE/MBE/WBE certification application, but also has a “quick certify” application for SBEs, MBEs, and WBEs certified by the State of Ohio or the City of Cleveland. Prior to certification and registration, the County’s Small Business Enterprise Program provides opportunities for small firms to develop business skills, to learn contracting regulations and processes, and to effectively bid on contracting and subcontracting opportunities.

Metro (Portland, Oregon)

Metro is the governing agency for the 24 cities and three counties that make up the greater Portland metropolitan area, “the urban heart of Oregon.” Metro solicits bids and proposals from business that are certified by the State of Oregon’s Certification Office for Business Inclusion and Diversity (COBID)—that is, minority-owned, women-owned, service-disabled veteran-owned, and emerging small businesses. Through the Oregon Procurement Information Network (ORPIN), Metro requests bids from COBID-certified contractors for public improvement projects between $5,000 and $50,000 and requests proposals from COBID-certified contractors for professional, technical, and scientific services projects between $10,000 and $50,000.

The COBID website links to the Oregon Procurement Information Network (ORPIN) website, which directs visitors to the website of Business Oregon, an Oregon State government agency, for procurement assistance resources. The Business Oregon’s Resources page lists organizations that provide procurement assistance to small businesses, including AVITA Associates (my consulting business!), the Government Contract Assistance Program (Oregon’s Procurement Technical Assistance Center, PTAC), Oregon Department of Transportation (ODOT), three SCORE chapters, and local SBA and SBDC offices.