Getting a Slice of Uncle Sam's Pie; Local Small Businesses Learn How to Land Federal Contracts
By Bill Wolfe
Think doing business with Uncle Sam means fat contracts with wide profit margins and lax oversight?
Think again. Federal government contracts typically offer slim margins and require strict compliance to rules and procedures, speakers said yesterday at a forum presented in Louisville by U.S. Rep. John Yarmuth, D-3rd District.
"You can make a profit, but not at commercial levels," said Colleen Preston, executive vice president for policy and operations with the Professional Services Council, the national trade association of the government professional and technical services industry. "The government is very competitive."
Companies under government contracts must observe rules such as the Davis-Bacon Act, which requires employee wages of no less than the locally prevailing rates.
Still, the large and numerous government contracts are tempting targets.
"Regardless of whether the economy is up or down ... there is one big customer that is always in business, and that's the federal government," Yarmuth told the gathering at the Louisville Marriott Downtown.
The federal government spends more than $248 billion a year on services and another $184 billion on goods, Preston said.
"Our government buys just about every product and service you can think of," said Jeri Grant, lead business development specialist for the U.S. Small Business Administration.
A lot of that money goes to big companies, which often act as the primary contractors for large projects. But smaller companies can nab a share of the business as subcontractors, Preston said.
Small businesses can also compete through online reverse auctions, said Barrie Kydd, vice president of business development for FedBid, which administers the process. With other types of contract bids, "you put in your bid and that's it. You don't know what's going to happen" until you're notified that you've won or lost the bid, Kydd said. With the FedBid process, companies are notified whether they are "leading or lagging" in the auction and can submit new bids.
The forum also included speakers on state and local government contracts and representatives of local business organizations such as Greater Louisville Inc. and SCORE, which offers small business counseling.
Richard Ferguson, a board member of Industrial Services of America, said he was at the event to "look for opportunities" that could benefit his company, which provides waste and recycling services.
Jennie Hirtzel, co-owner of J&A Creative Services, a marketing and graphic design company, said she and business partner Amy Williams wanted to learn how to get certified as female small-business owners and to figure out whether government contracts "would be a good fit for us."
8/19/2008
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