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Navigating Government Contracting

Michael L. Barrera
National Ombudsman, Small Business Administration
Tuesday, May 25, 2004; 11:00 AM

As national ombudsman for the Small Business Administration, Michael L. Barrera represents the interests of small firms from within the one federal agency created to serve them. Barrera also directs the SBA's business matchmaking program, which helps connect small businesses with procurement officials from government agencies at the local, state and federal level and private sector companies. The goal is to boost the number of contracts that are awarded to small companies and help them make connections for job and contract opportunities. The latest matchmaking event took place at last week's SBA expo in Florida, which coincided with National Small Business Week.

Barrera was online to discuss strategies and steps small businesses can employ to tap government contracting dollars. washingtonpost.com technology reporter Cynthia L. Webb moderated the discussion.


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A transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

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Cynthia L. Webb: Thank you for joining us today, Michael. What was the turnout at last week's matchmaking event at the SBA expo and can you tell us about some success stories pairing small businesses with large government contractors?

Michael L. Barrera: We had 2500 people attend the SBA Expo and about 500 small businesses and 150 buyers participated in the Matchmaking program. We had 3300 face-to-face Business Matchmaking appointments. We have confirmed that one small business from Kansas City received a contract for $30,000 from the SBA for IT services.

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Cynthia L. Webb: A number of small businesses or entrepreneurs might not be located in cities where you have matchmaking events. What are some suggestions for things they can do to get partnered up with larger companies and/or government contracts?

Michael L. Barrera: They should contact their local SBA Office and visit the Web site at www.sba.gov/gc, you can find a list of procurement center representatives who can put you in touch with buying activities. Another great free resource is www.fedbizopps.gov that lists all federal procurements over $25,000 for subcontracting opportunities and http://web.sba.gov/subnet/ lists large business prime contractors looking to subcontract with small businesses. For private industry, they should look to their local chambers of commerce, trade associations and SBA's Commercial Market Representatives. All of this information can be found at SBA's Web site at www.sba.gov/gcbd.

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Cynthia L. Webb: Here is a link to the SBA's matchmaking site: http://www.businessmatchmaking.com/

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Baltimore: Hi, I don't know if other small business owners, executives would share the following sentiment that unlike big businesses, a small business, especially at an early stage, cannot afford mistakes and waste of time. It seems that there's no known effective strategy for a small business executive to select one or two government agencies or programs to try to develop business with. There are tons of small business counselors at different agencies and levels, however, a small business executive may not know which one has a higher probability of nurturing a successful connection with other businesses. It would be extremely useful to have a uniform system that captures all the interaction between a government's small business counselor at all levels and small business owners/executives and their feedback. This small business executive could perform some meaningful research using such a system based on his product/service offerings to find similar successful small businesses to learn from their experience and approaches, and to find those counselors are more likely to help based on the counselors' past performance.

Cynthia L. Webb: Michael, what are your thoughts on this suggestion? What mentoring programs are in place to connect small businesses with business opportunities outside of the matchmaking events?

Michael L. Barrera: You make a great point about small businesses at the early stage trying to do business with the government. For those getting started, they should visit SBA's Procurement Academy which can be found at www.sba.gov/gcbd. Every October each government agency does a procurement forecast that is available online. This is a useful tool for targeting or identifying buying activities a small business may want to focus on. Other resources are the agency Office of Small and Disadvantaged Business Utililization. They can help target small business friendly program offices. They can be found at www.osdbu.gov.

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Washington, D.C.: Mr. Barrera,

I work for a large consulting firm and it just seems that a firm like mine can leverage more global assets and access a broader and deeper knowledge base than could a small business. Can you explain in what ways a small business can deliver comparable value to the government when, by the nature of being a small business, they have much more limited resources?

Michael L. Barrera: I disagree with that premise. In many respects, small businesses can compete with larger businesses with the advent of technology. It's a known fact that small businesses are more flexible and many of the new innovations come from small businesses. Additionally, the President is committed to small business as evidenced by his small business agenda. The federal government is required to purchase at least 23% of their goods and services from small businesses. In fiscal year 2003, the federal government recognized the importance of small businesses as they purchased more than $65 billion from small businesses. That being said, not every opportunity is right for every business.

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Southfield (Detroit), Mich.: We are a small Information Technology company with great record and experience. How can we do business with the government? We are an ethnic minority company, but not a certified minority?

Cynthia L. Webb: This is a common question we are getting from a number of readers. What basic advice do you have for people that want to know how to sell their services or products to the government? How important is networking for companies and how can companies outside of the Beltway facilitate this?

Michael L. Barrera: We are happy to hear from you Michigan. Business Matchmaking will be coming to Detroit on June 29, 2004. Please go BusinessMatchmaking.com for more information. I would also encourage you to have your DUN and Bradstreet number, which can be obtained at www.dnb.com/us/ and you should be registered with www.ccr.gov. If you are a minority firm, you should look into the possibility of being 8(a), HUBZone and SDB certified.

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Cynthia L. Webb: Can you elaborate more on what happens at the matchmaking events? After businesses apply for a spot for an interview, what things are government agencies and contractors looking for as selling points from potential small business partners? Are most of the interviews to make connections, but not to award contracts? The SBA IT contract sounds like a great win, but how often do the meetings net new contracts for people?

Michael L. Barrera: For more information about Business Matchmaking, visit BusinessMatchmaking.com which explains the process. Basically, once you register you will be interviewed by a business matchmaking team and your capabilities will be "matched" with the expressed interest of buyers from the federal state and private sectors. It is important to note we don't make specific appointments for the small businesses, we make "matches." Most small businesses receive anywhere from 5 to 10 matches at each business matchmaking event. So far, approximately 40 small businesses have received over $20 million in contracts.

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Rockville, Md.: One of the problems I have encountered is trying to get past the small business representative and getting a meeting with key decision makers. It seems like the people who get such meetings have contacts or "connections." What do you suggest small businesses do to get to the key decision makers?

Michael L. Barrera: That is the very purpose of Business Matchmaking, to take the buyers out of the beltway and take them to mainstream America. Small businesses who attended business matchmaking have expressed repeatedly their satisfaction with the fact that they have met with contacts that normally would have taken them 8 months to a year. We are very pleased with this particular component of Business Matchmaking. For others who aren't able to attend the Matchmaking events, please contact SBA's procurement center representatives.

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Austin, Texas: How can I get 8a certified from Austin, Texas?

Michael L. Barrera: You should contact SBA's district office in Dallas, Fort Worth. Additionally information on the 8(a) program can be found at www.sba.gov/gcbd. We are currently working on automating the application for the 8(a) program and anticipate that it will be available by the end of the Summer. However, please go ahead and apply now. Provided that all paperwork is submitted properly, the certification process takes approximately 60 to 90 days.

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Baton Rouge, La.: I am a young lawyer trying to start a small practice. I have heard of contracts available to small firms. How is that controlled, and how would I get involved in that process?

Michael L. Barrera: I was a former young lawyer who is no longer "younger" nor practicing any longer and wish you the best. You should get your practice going first and figure out what your capabilities are and build a track record before relying on government contracting as your primary source of revenue. That being said, government contracting opportunities for lawyers and everyone else can be found at fedbizopps.gov.

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Cynthia L. Webb: Some small businesses have complained that large contractors often put small businesses on their teams to win contracts, but the larger firms don't actually dole out the work once they win the contract. As ombudsman, you represent the interests of small businesses and serve as a liaison with Congress. How do you manage and help small businesses that complain about this lack of follow-through on some government contracts? Are you doing any work to alleviate this problem?

Michael L. Barrera: Every large prime contractor with a contract for than more than $500,000 ($1 million for public construction contracts) is required to submit a small business subcontracting plan. Large businesses that fail to make a good faith effort to adhere to these plans are subject to the contracting officer assessing liquidated damages. SBA is in the process of promulgating a new regulation to make it easier for prime contractors to assess good faith compliance and enforce subcontracting plans. Additionally a prime subcontractor performance is part of its past performance record and looked at when the prime is considered for new awards. If a subcontractor feels that it's been treated unfairly, it should contact either its Commercial Market Representative or the OSDBU office at the agency. This being said, prevention is key. Make sure you have a good binding teaming agreement in place when you're involved in bid preparation. This will help make small business subcontracting a win-win situation for the prime, the subcontractor and the federal government.

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St Louis, Mo.: I represent a woman-owned, Native American small chemical manufacturer whose products have been sold to private industry for twenty years. Our products are being used by municipal transportation agencies and in Kuwait and Iraq by private contractors. I need assistance finding, then targeting, the appropriate market with a US governmental agency.

Michael L. Barrera: First contact USAID if you're interested in Iraqi contracting opportunities. Secondly, to identify which agencies are purchasing your products, I'd suggest that you look at www.fpdc.gov. It provides historical data on contracts awarded.

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Cynthia L. Webb: Are there any plans for a virtual matchmaking conference, so people that can't travel to Florida, Detroit, DC or other matchmaking spots, can participate? Could you explain more about some other plans that might be in the works to expand the program?

Michael L. Barrera: We are working on an online process right now where small businesses will actually have their appointments with buyers by phone. We did this online process in Cincinnati last month and we are preparing to do one in Detroit on June 29, 2004. We plan on expanding on this concept on a national basis. This information will be forthcoming.

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Montclair, N.J.: Is it truly possible for small (and especially startup) contractors to work directly with some of the big, tough federal agencies? Shouldn't they fear that the agencies will be able to strongarm them into accepting contract terms that are less desirable than a Lockheed Martin would get? What do you do as a small contractor if you don't have multimillion-dollar legal/PR/marketing/lobbying wonks to help you open the right doors?

Michael L. Barrera: One of the great things about contracting with the federal government is that most of the terms and conditions are federally mandated. This means that everyone is treated equally. You can find these standardized contract clauses in the Federal Acquisition Regulations (FAR)which can be found at www.arnet.gov -a discussion of these can be found at SBA's procurement academy at www.sba.gov/gcbd. Once you are familiar with these terms, then it becomes a business decision whether you want to pursue government contracts.

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Cynthia L. Webb: You had a great suggestion that small businesses make sure they have a good binding teaming agreement with larger contractors to help protect their interests once a contract is awarded. A lot of small firms might, however, have limited resources to write solid contracts and not have money to pay consultants to help with this process. Do the small business development centers help with this? Any additional online resources you could point people to?

Michael L. Barrera: It is critically important that small businesses take advantage of the federal resources and local resources that are available to them. For instance, we highly recommend you contact your local SBA office, your Procurement Center Representative, Commercial Market Representative and your Procurement Technical Assistance Center. A few hours spent with these resources and others you deem appropriate can save you your valuable time and resources in the long run. Small Business Development Centers are critically important when starting a small business and preparing your financial package.

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Philadelphia: Michael, I have been trying to contact the SBA in my area for 5 weeks now. Every time I call them, I am forced to leave a message and my call is never returned. What are you doing to improve customer service at local offices?

Michael L. Barrera: Please contact Tom Tolan, the District Director for SBA's Philadelphia District Office at Tom.Tolan @sba.gov. Also you could contact Jack Campbell, the Area Director for Government Contracting in Philadelphia at John.Campbell @sba.gov.

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Cynthia L. Webb: Could you share a few lessons learned from the past matchmaking event that might be helpful for other small businesses that weren't in attendance? And what other suggestions do you have to help small businesses make connections with government agencies and contracts?

Michael L. Barrera: First of all, I want to thank the small businesses and the Washington Post for allowing us to participate in this chat. Contracting opportunities are extremely important to the President, Administrator Barreto and the SBA. If small businesses do well, our entire economy does well. We at the SBA are here to provide assistance in government contracting as well as counseling and access to capital so that small businesses can be as prepared as possible in the government contracting arena. I also want to thank Emily Murphy in our Government Contracting department for her assistance in answering your questions. The most important thing when doing business with government agencies and the private sector is to know your business and take advantage of resources available to you. To target agencies that may have a need for your services and products, you can review their proposed procurement forecast. They also look at www.fedbizopps.gov. Be persistent and patient! Market, Market and Market! Good luck to everyone and I look forward to seeing you at the next Business Matchmaking.

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Cynthia L. Webb: We are out of time today to take more questions. Thanks, readers, for all of your input. Hopefully we can have a chat again with Michael and the SBA in the near future since there is so much interest in the topic. Thanks, Michael, for your time and for sharing this information and so many helpful resources.

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Michael L. Barrera was not able to respond to every question during the one-hour Web chat. He submitted these responses later via e-mail:

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Vienna, Va.: Mr. Barrera, How will the proposed changes in size standards impact small businesses that want to do business with the federal government?

Michael L. Barrera: On March 18, 2004, SBA proposed revisions to our current size standards, in order to reduce the confusion over what qualifies as a small business, and would reduce the number of size standards from 37 to 10. The proposed size standards, if adopted, changes size standards now based on average annual receipts to number of employees. Most businesses are not affected by the proposed size standards. They are small under the current average annual receipts size standard and are small under the proposed employee size standard. However, all small businesses should read the proposed rule, which can be found at http://www.regulations.gov/AGCY_SMALLBUSINESSADMINISTRATION.cfm, to see if it effects them. Likewise, all small businesses are encouranged to submit comments on the proposed regulation any time before July 2, 2004.

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Coral Gables, Fla.: How is the general public served by getting podunk little companies involved in government contracting? I mean, I'm all for small business, but ultimately I want my tax dollars going as far as they possibly can in procuring goods and services. Can't the big boys meet those needs better?

Michael L. Barrera: Competition helps keep down the cost of goods and services. Our country is served by procuring from businesses that meet contract requirements at a fair and reasonable cost. Small businesses have proven time and again that they are a viable source of supply to Federal buying activities. SBA's role in Federal procurement is that of an advocate to ensure small businesses receive their fair share of contract opportunities as both prime and subcontractors. Let's remember that Small Businesses are the backbone of this nation's economy.

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Arlington, Va..: Isn't the government's never ending push for more streamlined contracts working cross-purposes to the goal of getting more small businesses involved in government contracting? Is it your responsibility to make small businesses attractive to big government buyers? How do you do that?

Michael L. Barrera: Procurement streamlining initiatives should balance the efficiencies available with the need to maintain a vibrant and competitive industrial base, and small businesses play a crucial role in the industrial base. The President's Small Business Agenda tasked the Office of Federal Procurement Policy to review the role of small businesses in federal procurement and recommend actions that would mitigate the effects of contract "bundling" on small businesses and make it easier for them to compete in "full and open competition" for prime contract awards. Earlier this year revised procurement regulations were published that provide greater oversight in the acquisition planning phase of a contract to help increase contracting opportunities for small businesses. This year, under President Bush's leadership, for the first time in many years, the Federal Government achieved its statutory goal of awarding 23% of Federal Prime contract dollars to small business. SBA's Offices of Government Contracting and Business Development and Office of Economic Development, as well as agency Offices of Small and Disadvantaged Business Utilization, offer assistance to small businesses to help them sharpen their marketing expertise, and gain information on how to sell themselves Federal agencies as well as large Federal prime contractors.

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Annandale, Va.: Michael, Can you talk about where SBA gets its funding? How it is set up? I seem to recall the SBA had some sort of funding or charter status that set it apart from other agencies?

Michael L. Barrera: SBA is funded the same was as other Federal agencies: the President proposes a budget, and Congress then appropriates funds for the SBA.

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Washington, D.C.: Michael, Seems like the Bush administration has made a big effort to streamline federal contracting in a way that encourages agencies to buy from fewer vendors. Has this made it any more difficult for the SBA to do its job?

Michael L. Barrera: The President's Management Agenda calls for all Federal agencies to streamline their operations and focus on the delivery of results to those who we are accountable to - the American taxpayer. However, the President and Administrator Barreto remain committed, passionate advocates for small business. In FY 2003, SBA had an historic year producing results for small business. Last year the Federal government purchased over $65 billion in prime contracts from small businesses - an increase of over $12 billion from the year before. Loans to small businesses through our 7(a) program were up over 30% from FY 2002, and this year we are already up 23% from FY 2003. Likewise, our 504 loan program made 25% more loans in FY 2003 than in did in FY 2002, and in FY 2004 we are up another 29%. This will be another great year for small businesses!

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Washington, D.C.: Is it or is it not possible for a company owned by a Caucasian female to get 8a status? I have heard varying answers to this question. Also what are the guidelines for determining social disadvantage for the small disadvantaged business certification?

Michael L. Barrera: Yes, it is possible. Any individual may apply based upon a claim of preponderance and this includes Caucasian Females. Currently SBA has numerous firms that have been approved for both the SBA and 8(a) program that are Caucasian Female owned firms. These individuals can make a claim of preponderance based upon gender discrimination.

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Washington, D.C.: Contracting with an Alaska Native Corporation provides federal government agencies with key procurement benefits. Yet, few procurement staff seem to know about this program. What can SBA do to address this shortcoming?

Michael L. Barrera: The Office of Business Development has recently begun a nationwide training program for all SBA field offices. One of the topics scheduled for the next training session is contracting with Alaska Native Corporations. An expert from the SBA Alaska District Office (the location where ANC applications are processed) will provide training and answer questions. In addition, a new SOP containing specific agency guidelines regarding will be issued in the next couple of weeks.

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Virginia: Why are people with disabilities excepted from the minority SBA program?

Michael L. Barrera: SBA has determined that certain groups have historically been discriminated against; these groups include: Asian Pacific Americans; Native Americans; Black Americans; Sub-Continent Asian Americans and Hispanic Americans. However, any one may apply for the SDB or 8(a) programs if they have been subjected to discriminatory practices. They must make a claim based upon the preponderance of the evidence. This claim is made by providing a narrative regarding their discrimination. Discrimination can in fact be based upon a physical disability. Currently we have numerous individuals who have been approved into the program based upon a claim of preponderance, including several individuals whose claim was based on a disability.

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Washington, D.C.: For a small manufacturer of networking and Internetworking equipment in the DC area, what is your advice on developing partnership with established government contractors in order to secure faster time to market?

Michael L. Barrera: I always suggest you contact your local Government Contracting Area Office, in your case Philadelphia at 215-580-2767, or contact your local District Office in DC who will be able to provide the information you need. Also on our web site at www.sba.gov/GC under "contacts and representatives" we have a list of Commercial Market Representatives whose job is to match small businesses with large prime contractors. You can also find real opportunities with prime contractors seeking small subcontractors at http://web.sba.gov/subnet or at a Business Matchmaking event.

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Herndon, Va.: How much demand is there for data entry services both in the private sector and in the federal government? What is the best way to win those contracts? Would you be able to provide some resources one can use to access contracts? Thank you.

Michael L. Barrera: In the private sector, I suggest that you work with trade associations to identify opportunities, or you participate in Business Matchmaking. For public sector work, www.fpdc.gov can give you an overview of who previously purchased these services, while www.fedbizopps.gov can help you identify current contracting opportunities. Please contact one of our Government Contracting Area Offices or our District Offices for additional information.

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Columbia, Md.: As an independent consultant, I am a useful resource. I may be the sole vendor for smaller projects. Or, I may be a unique resource at certain stages of a larger team project. What biz development techniques and strategies are best for me to use to establish relationships and be visible -- both with the OSDBUs and also with primes? Thank you.

Michael L. Barrera: Start with your Government Contracting Area Office, your local District Office or SBA's Office of Economic Development (www.sba.gov/ed). They can offer various training guides, seminars, one-on-one counseling and refer you to our many resource partners such as our Small Business Development Centers, Procurement Technical Assistance Centers or our Service Core of Retired Executives (SCORE), that can each provide training and expertise in different Marketing or technical areas.

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Sterling, Va.: Is the best way for a small business to take advantage of government contracts the tried and true method of going to the big-fish contractors and subcontracting with them?

Michael L. Barrera: This is one method SBA usually suggests to a new contractor that has never worked for the Federal Government and/or has been unsuccessful and trying to break into the Federal arena. Prime contracting and subcontracting each have distinct advantages and drawbacks, so you should look at how they each fit in with your business model before deciding which opportunities to pursue.

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