Smaller Piece Of The Pie For Small Businesses

With the end of the fiscal year upon us, the “feeding frenzy,” as I like to call it, is in full swing. With possible sweeping budgets on the horizon through sequestration, and overall declines in revenues, agencies are unloading end-of-year dollars at a dizzying pace.  It should be particularly good times for small businesses, as opportunities should be plentiful.

Alas, that is not entirely the case. It is the same story, but amplified. Smaller sized contracts, especially those that use simplified acquisition procedures, are still going to large businesses. According to the Federal Procurement Data System (FPDS), it is on track to be about 40%.

Large businesses are getting a surprisingly larger share of contracts that should be going to small businesses because they are known commodities, with a wealth of past performance in a risk-averse environment. However, the lack of small business focus by federal buyers is the main reason.

The single greatest factor is the one true common denominator, the acquisition workforce. A recent story in the Washington Post highlighted the problems industry is facing through the rise of inexperienced federal buyers, and the difficulties in not only awarding contracts, but managing them as well.   

One of the greatest challenges small businesses face is this inexperience. We can all acknowledge that the acquisition workforce is overworked and under-resourced. However, that excuse does wear thin. People need to do their jobs at the end of the day, that phantom word in the federal vernacular; accountability.

As a result, insufficient, or simply no market research, is being conducted to qualify small businesses as eligible for a given solicitation. The question seems to be, why be bothered? I have this large company over here doing everything under the sun; so let me make sure they win this contract. They have all the vehicles, the past performance, etc. They are a known entity. Sounds like a plan!

It is the path of least resistance, as qualifying small businesses, conducting a Request for Information, simply doing a Google search, simply takes too much time. Further, many program offices should be conducting this market research, but many do not understand their roles and responsibilities in the acquisition planning phase. A major point I make in training classes to PMs during Acquisition 101 classes.

The trend of awarding “small business” contracts to large businesses is endemic, and will not abate anytime soon. Small businesses can continue to hope for crumbs, or that someone in Congress actually pays attention to real issues affecting small businesses.