Andre Gudger has heard the argument many times that, as he puts it, “small businesses don’t build planes and ships and nuclear weapons.”
It’s his job — or at least part of it — to change that perception.
A Maryland native, Gudger has been the director of the Defense Department’s Office of Small Business Programs since 2011. During the three years prior to his arrival, the share of the agency’s contracts awarded to small companies had shrunk every year. Moreover, in the more than three decades since federal small-business contracting goals had been put in place, the agency had never once accomplished them.
In the three years since, even amid budgetary constraints, small-business participation in Defense Department projects has expanded each year. In fact, this past year, the agency for the first time eclipsed not only its small-business goal, but also the federal government’s target, awarding roughly 23.4 percent of defense contracting dollars, representing about $53 billion, to small employers.
“We’re starting to click on all cylinders,” Gudger said.
In an interview, Gudger shared some insight into the inner workings of his office, how small businesses play into the broader picture of national security, and his thoughts on ways lawmakers can help ensure that those small firms play an even larger role moving forward. What follows is a transcript of our conversation, lightly edited for length and clarity.
Harrison: How did you land in this position at the Pentagon?
Gudger: I always wanted to be an entrepreneur, so I tried to put myself on that track early in my career. I worked at a small defense contracting firm for NavAir [the Naval Air Systems Command] at [Naval Air Station Patuxent River] in Maryland, where I was working on a major weapons system that I didn’t understand at first. From what I could see, I was just crunching numbers and algorithms for these smart scientists. Once I finally got the opportunity to see what my work went into, and I could see the big picture, I fell in love with it, and I fell in love with national security.
I later spent stints at several large companies, and those experiences prepared me to start my own business back in the early 2000s, which was the best experience in my life. It got me ready for this position by teaching me how to lead people, what it meant to develop talent, all while still delivering a capability for the customer.
Harrison: When you arrived, what were the most pressing challenges and what were your priorities?
Gudger: I came in looking to increase opportunities not merely for one industry or socioeconomic category, but for all small businesses. I knew from my industry experience that if small companies are given real access to officials at the Pentagon, if those doors are opened, that the industry will respond. It was really about showing others that small businesses are relevant and that they can be an important part of the fabric of our industrial base.
Harrison: How has that message been received by other parts of the Pentagon?
Gudger: It’s been a very warm reception from day one. I think we all realize that, if you want to get things done and create jobs, especially right now, when we’re in a downward spiral in terms of federal spending, you turn to companies that have shown they can be smart about how they spend money, companies that have found ways to do more with less. Often, those are small businesses.
Harrison: We hear that a lot in Washington, but frankly, there’s plenty of skepticism about whether prioritizing small businesses is purely political or a strategy that delivers results. What do you think? Why stump for small businesses?
Gudger: Look at our Virginia-class nuclear subs, for example. Seventy percent of those subs are built by small businesses. So we have small companies that built one of the most elaborate systems the department has ever seenand one that helps secure our country and our freedom.
Not only are these small companies nimble and innovative, but they are also resilient, and I think every part of the department at the leadership level has embraced that. It’s not by accident that we hit the small-business goal, it was on purpose. It was about planning and everyone working toward them.
Harrison: Staying on those goals, questions have been raised about the federal government’s contracting metrics in the wake of reports that, for instance, large corporations have repeatedly won contracts intended for or classified as small-business awards. Do you believe there are real problems with the system?
Gudger: I think we do a good job ensuring that small businesses play a major role in the Department of Defense and that prime contracts we have with them are valid. I’m not aware of any systemic problem of waste, fraud and abuse, and we have looked. We have a team spread around the country looking at the numbers.
Some people twist the data, but the reality is small companies are sometimes acquired, and there are rules stating that the contracts they have been operating can continue to count toward small-business goals for a short period of time. I don’t believe a small business should be punished for being successful and thus growing or being acquired.
Harrison: What could be done to increase small-business contracting even further?
Gudger: Well, we have several programs that are enablers for small businesses, ones that reduce barriers and give small businesses more access to procurements. One of the most important is the [Small Business Innovation Research] program, under which about 20 percent of awards go to new entrants. So with one out of every five awards made under that program, we’re turning over our industrial base and bringing in new people and new suppliers. That leads to more competition, which leads to better results and capabilities.
So long-term reauthorization of some of those programs is something I would like to see from Congress. It would provide some certainty for initiatives like the [SBA’s] mentor-protege initiative and SBIR, which are both up for reauthorization. Over the next few years, those programs will be key to ensuring we keep meeting those small-business goals and that the country maintains its technology superiority.
Harrison: Last one — what’s the most fun part of your job?
Gudger: It’s interacting with the people, both inside the building and small business professionals nationwide. I have learned so much in the past three years from the people around me, and at the same time, being able to talk to so many business owners and industry professionals has been very rewarding.
When you meet that company that just got started, and a year from now you see them as a subcontractor or a prime contractor doing business with the Department of Defense, it’s hard not to feel good about that, to know that you can help make that happen. It’s a phenomenal thing to be a part of.