Click Here to Go Directly to the Story
Register/Subscribe
Home



JULY 6, 2000

MANAGEMENT

Uncle Sam Wants YOU!
Only 3% of small businesses bid for federal jobs. The others? They're missing out on a lot of bucks


  STORY TOOLS
Printer-Friendly Version
E-Mail This Story

POLL INSTANT SURVEY >>
My company provides sexual-harassment prevention training:

Periodically
Once, when the employee is hired
Never
Not sure

VIEW POLL RESULTS >>
  PEOPLE SEARCH

Search for business contacts:

First Name :
Last Name :
Company Name :

PREMIUM SEARCH
Search by job title, geography and build a list of executive contacts

Search by Zoominfo
Most entrepreneurs bristle at the idea of dealing with the government. Not Lincoln Simmons. The owner of Environmental Services & Technologies Inc., a 60-employee Cherry Hill (N.J.) environmental consulting firm, counts the U.S. government as his best customer. Half of his $3.9 million in 1999 sales came from the feds. "Once you get through the paperwork, it can open tremendous vistas," he says.

Congress requires that federal agencies set aside 23% of their contracts for small businesses. In 1999, some $43 billion of the $186 billion the government spent on goods and services went to entrepreneurs like Simmons. Yet fewer than 3% of U.S. small businesses participate in government procurement programs, says Don Mazzella, executive vice-president of SmallBusinessDepot.com Inc., a Web startup that helps link small companies with federal contracts.

Such reticence is easy to understand. As part of a bid, a company must explain in often excruciating detail how it plans to satisfy job requirements. Then there are forms for equal opportunity goals, insurance, bonding...the list goes on. A $150,000 bid might be 250 pages long.

But for those who persevere, the rewards can be great. In early 1999, Pacific Edge Software Inc. landed a $125,000 contract to set up project-management software for the U.S. Department of Housing & Urban Development. Officials liked it so much they asked the Kirkland (Wash.) company for a license to use the product at thousands of HUD workstations. The $1 million deal gave the fledgling company more credibility just as it was seeking venture capital, and helped it raise $32 million in two rounds of financing. "That was really, really good timing," says CEO Lisa Hjorten. Pacific Edge has grown from two to 100 employees and is trying to market to other government agencies.

What the government considers small varies by industry, but generally it's companies with fewer than 100 employees and less than $25 million in sales. If you're new to the process, a good place to start is the Small Business Administration's Web site, www.sba.gov/gc, where you can register your business on PRO-Net, a national procurement network that federal agencies and private companies use to find small-business subcontractors. When selecting a bid, agencies look not just at price, but also at experience and expertise. Disadvantaged businesses and those in economically distressed neighborhoods are allowed to bid up to 10% more on a job without having it count against them.

The process is not as competitive as you might think. Federal agencies often receive just two or three bids on contracts. And once you get your first job, the government tends to reward you with even more work. It's enough to turn the most cynical citizen into a true patriot.




By Christopher Woodard

Back to Top

[an error occurred while processing this directive]


Copyright 2000, Bloomberg L.P.
Terms of Use | Privacy Policy

Media Kit | Special Sections | MarketPlace | Knowledge Centers
Bloomberg L.P.