Small businesses fight to compete

Small businesses that sell technology to the government are closely watching several new policy initiatives that could open doors wider to them. Boosting small businesses is one of the Bush administration's priorities, and the president made a point to mention it in his January State of the Union address.

According to the General Services Administration, the number of small businesses receiving new contracts for work in the federal sector has shrunk dramatically, from 25,506 in 1991 to 11,651 in 2002. The proposed changes seek to reverse that trend.

Some agencies have already taken steps to bring smaller companies in through programs such as the Commerce Department's Commerce Information Technology Solutions contract, which is reserved for small companies.

"The objective was to get $1.5 billion in small-business contracts" during five years, said Michael Sade, director of Commerce's Office of Acquisition Management. "We're at $1.3 billion in year four, ahead of schedule."

The Small Business Administration's definition of a small business varies depending on the industry, but the term generally refers to a service company with less than $5 million in annual revenue or a product company with fewer than 500 employees, an SBA spokesman said.

Small businesses have had a rough ride with the federal government, Sade said, and not long ago they were stigmatized because they were less visible and less established than large firms. "I'm not sure it's completely disappeared," he said.

Small companies, however, true to their entrepreneurial spirit, do find ways to get in the federal door. It just takes more creativity and tenacity to make up for the lack of marketing dollars or high-profile track records that the larger players hold.

Corda Technologies Inc., which develops graphics software to display database information in charts and maps, makes sales by cozying up to agencies' Section 508 coordinators, said David Vandagriff, vice president of sales and marketing at the Lindon, Utah-based company. The 27-person company's software can make information accessible to people with disabilities, which Section 508 of the federal Rehabilitation Act requires.

"That has helped us get into a lot of agencies," he said. "The 508 coordinators talk among each other and our name gets passed around." The National Cancer Institute became one of Corda's customers that way, he said, and that relationship has led to other introductions.

Executive Business Decision Software LLC, a four-man company in Broomfield, Colo., used e-mail to get the word out about CXOToolKit, a product designed to help agencies comply with the Clinger-Cohen Act's emphasis on quantifying the business impact of IT spending.

When the product was ready to ship in January, the company sent e-mail messages to senators, agency chief information officers and chief financial officers. The maneuver hasn't made them any sales yet, but some agencies are arranging demonstrations, company partner John Santoro said.

"We were amazed at how responsive the government's been," he said. "The Internet has really levered up our ability to compete."

"A lot of times when people need any type of technology, the first place they turn is the Internet," said Ross Rainville, sales manager at i-O Display Systems LLC, which makes wearable display devices. The Navy was one of the Sacramento, Calif., company's first customers, and others have come along since.

"They're finding us more than we're finding them," Rainville said.

The changing nature of government has also helped small companies, said Carolyn Hyde, senior vice president of worldwide sales and marketing at SER Solutions Inc., a 250-person software developer with headquarters in Dulles, Va.

"I believe there are more business people in the government at very high levels," she said. "And I think as younger people have come into the government, they've come in with more of an entrepreneurial sense."

The smart large firms know that small companies often have special expertise in their areas of focus, said Ira Kirsch, president of Unisys Corp.'s federal government group. His organization won the Transportation Security Administration's $1 billion Information Technology Managed Services contract last year and has awarded 22 out of 36 subcontracts to small businesses, he said.

"You go to the bigger companies because they have the breadth and depth," he said. But for certain specialty areas, "a small business, because they are laser-focused, might be a better fit. They're very responsive, quick to engage."

However, small companies still struggle, and they're waiting to see if upcoming rule changes will help level the playing field. The administration's major proposals would:

n Open more federal work to private contractors by making it more difficult for agencies to declare a project or function "inherently governmental" and keep it in-house. The proposal was published late last year and a final version is expected soon.

n Limit the circumstances under which agencies can bundle contracts, a practice of grouping several small contracts into one and awarding the whole bundle to a single contractor, who is then expected to dole out the work to subcontractors. Proposed rules were published Jan. 31.

n Require small businesses on governmentwide acquisition contracts, including those on GSA schedules, to recertify their size and status each year. The Office of Management and Budget's Office of Federal Procurement Policy is drafting proposed rules that have not yet been published.

Leaders of some small businesses say the changes to contract bundling would be the single greatest benefit of the proposed changes.

"The theory was that you reduce the administrative costs of all these small contracts," said Eric Adolphe, chief executive officer of Optimus Corp., a software developer in Silver Spring, Md. "All of a sudden, a $200,000 contract, which is very attractive to a small business, suddenly that's tossed into a superhuge omnibus contract for a Lockheed [Martin Corp.]. That put a lot of small businesses out of business."

"It is a bit frustrating watching these huge efforts go to large integrators who are the de facto contract officers," agreed Richard Landry, president and CEO of Conquest Systems Inc., a small federally focused software developer in Washington, D.C. "The lion's share of the work has gone down those vehicles, and it's made it difficult for companies like us to compete."

NEXT STORY: HHS publishes HIPAA security rules

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.