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INNOVATION
& DESIGN Home Page Architecture Brand Equity Auto Design Game Room SMALLBIZ Smart Answers Success Stories Today's Tip INVESTING Investing: Europe Annual Reports BW 50 S&P Picks & Pans Stock Screeners Free S&P Stock Report SCOREBOARDS Hot Growth 100 Mutual Funds Info Tech 100 S&P 500 B-SCHOOLS Undergrad Programs MBA Blogs MBA Profiles MBA Rankings Who's Hiring Grads | | 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
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  | | |
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