Two Key Issues are addressed here:
The Federal Government
"Horror Show or Great Market?"
probably heard some of those horror stories about doing business with the
Federal Government. Most of those tales are gross exaggerations. Did you
ever think that those stories were made up by existing government
contractors that want to keep it all for themselves. Here are ten great
reasons why you might want to pursue this market:
1.$200B annual procurement budget: The
Federal Government averages about $40 billion annually with small
businesses. It must, by law, spend at least 23 percent of its prime
contract dollars with small businesses. In addition, five (5) percent
goals also exist for minority and woman-owned businesses.
2.Buys almost any product or service
imaginable: You build it or provide it and its almost certain
that the Federal Government, the biggest customer in the world, has a need
for it, and is already buying it from one of you competitors. Even the
Department of Defense, which accounts for about 60 percent of all
procurements, buys everything from food services, to management
consulting, to software, to guard services not just guns, planes and
3. Advertises its needs well in advance:
The Federal Government is about the only client youll ever meet that
describes what they need, when they need it, who to talk to about it, how
much theyre thinking about paying for it, and when theyre going to buy
it! Most of the major agencies have Procurement Forecasts, web sites and
on-line procurement bulletin boards to help you identify business
4. Purchasing ground rules clearly
specified: Whether youre dealing with NASA, the Air Force,
Treasury, or any other Federal Government agency, they all follow the same
rules the Federal Acquisition Regulations. The requirements, advertising,
procurement, selection, payment and other steps are spelled out in these
documents and you dont have to learn new strokes for new folks as you do
in other markets.
5. Customers cant refuse to see or listen to
you: Federal Government workers, whether theyre Generals,
Admirals or GS-7s all work for you and other American citizens. They want
to hear from you, and if you approach them professionally, they cant
avoid your sales-pitch. When was the last time that you could say that
about a commercial customer? 6. Many organizational friends available to
help you: The Small Business Administration, small business offices in
every Federal Government location, Small and Disadvantaged Business
Specialists, Procurement Center Representatives, DoDs Procurement
Technical Assistance Center and even your local Congressional
representatives are paid to help you succeed in business. You only have to
7. Pays for work progress along the way:
The Federal Government, through progress payments, milestone payments and
the SBAs various working capital and other loan guarantee programs helps
you finance the contracts youve won.
8. Credit card purchases and simplified purchasing
available: The Federal Government purchases of up to $2500 can be
made with a government credit card and contracts from $2500 to $100,000
can be made quickly and simply by contracting officers who obtain just
three bids, often from the companies listed in SBAs PRO-Net listing of
about 170,000 small businesses. Are you registered in PRO-Net?
9. Non-competitive as well as limited competition
advantages available to selected businesses: As a certified 8(a)
BD contractor, you can seek and be awarded a contract of up to $5M (for
manufacturing) or $3M (for everything else) without having to compete, in
the normal sense. If you compete as an 8(a) BD in a set-aside, your
competition looks very much like you and its not the "big guys". As an SDB
contractor, your price can be up to ten (10) percent higher or you can
enter a contract competition with up to a 20 point (out of 100) head
start. Both of these programs can level the playing field for small, woman
and minority-owned businesses.
10. Rewards your largest and meanest competitors to
work with you: The Federal Government even provides incentives to
the so-called "big guys" to contract with you in full and open
competitions. You see, if they do, they are also eligible for the up to 20
points in proposal evaluation credits. Being certified just makes you a
more attractive teaming partner with those "big guys".
|8(a) vs SDB|
A number of our clients have questioned why they should purchase our SDB certification product versus the 8(a) product. "If being 8(a)BD certified automatically qualifies me for the SDB program, why should I opt to complete this certification package? Good question! Here's a few great reasons:
1. If your adjusted net worth is more than
$250K, but less than $750K, you qualify for SDB certification, but not for
the 8(a)BD program.
2. If you and your immediate family members own more than a
ten percent interest in another existing 8(a)BD company, you qualify for
SDB certification, but probably not for the 8(a)BD program.
3. If another non-8(a)BD company that operates in the same
or similar line of business as your 8(a)BD applicant company owns 10% or
more of your business, you can qualify for SDB certification, but probably
not for the 8(a)BD program.
4. If your company has not been in business, operating in
your selected primary business area for at least two years prior to your
application for the 8(a)BD certification, you are still eligible for the
SDB program, but not for the 8(a)BD program, unless you request and
receive a waiver.
5. If you can't produce tax returns for the two years prior
to your 8(a)BD application that clearly show revenues in your primary
business area, you can qualify for the SDB certification, but not the
6. If you can't demonstrate reasonable prospects for success
in competing in the private sector if admitted to the 8(a)BD program, then
you will be denied access to this program, but still be eligible for the
SDB program. In assessing your potential for success, the SBA shall
consider, among other factors, your access to credit and capital,
including but not limited to long-term financing, access to working
capital financing, equipment trade credit, access to raw materials and
supplier trade credit and bonding capability, if applicable. P.S. If you
haven't completed a business plan for your company, forget it! If you
can't claim or demonstrate that you, your principals and your company are
of good moral character, then you will be denied 8(a)BD certification,
whereas, there is no equivalent request for this claim or associated data
from you and your team for the SDB certification.
7. If you can meet all of the above conditions, we strongly
suggest that you attempt 8(a)BD certification. However, if you're a
relatively young company, just starting out, lacking a business plan,
contract experience, adequate financing, demonstrated business management
skills and other key success factors, then we also strongly suggest that
you opt for the SDB certification. It's a great training ground for new
Federal Government contractors. You'll even be a more attractive business
partner for the "big guys". When you're ready, the 8(a)BD program will be
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PBCRC is a not for profit 501(c)(3) organization funded in part by the MacArthur Foundation.
"Creating Access To Economic Opportunities"