Uncle Sam Wants Your Business
May 12, 2003

By James Klein, Larta VOX Editor

Companies spend millions to reach consumers, while zealously avoiding the biggest customer on the planet. The U.S. federal government will spend over $234 billion on goods and services in 2003, and is relying on companies of all sizes to sell them the products and services they desperately need. There is a mistaken impression in the small business community that the federal government is not interested in working with them, or that 'it isn't worth the trouble.' Some companies have had difficulty in years past trying to sell to the federal government, including problems cutting through red tape, meeting procurement requirements, and adhering to government accounting and reporting procedures. However, several laws and initiatives have been passed that make it much easier for companies - especially small companies - to sell to the federal government.

Representative Tom Davis of Virginia has been instrumental in changing procurement procedures, making it easier for businesses to sell to the federal government. "Some of the best ideas we have had, some of the most sophisticated technology has come from small businesses, niche companies," said Davis. "We know there are things that scare companies away. We know sometimes you worry about liability. We rewrote some of those liability provisions last year and we'll be rewriting them again. We know that the rules and regulations are not built for commercial, they're built for government practices. We're changing that."

Representative Jane Harman has worked with colleagues from both parties to open the government procurement process, and also recognizes the importance of small companies and technology innovators to the success of government operations, especially in the area of homeland security. Addressing a group of business representatives in Torrance, California in April, Harman said "We will win the war on terrorism because you will design the technologies and systems that will win that war. The Department of Homeland Security…is a place where many of you want to do business and should do business." Harman credits Tom Davis with taking the lead "…to establish a focus on science and technology, the point of which is to find, recruit and understand these emerging technologies and emerging products and procure them."

Representative Davis also emphasized the need for the government to work with private companies when dealing with homeland security issues. "We can't fight the war on terrorism, we can't run the military without sophisticated, high-technology knowledge, and the government doesn't have that. You have that out there in the private sector. We need your ideas now more than ever," exaplained Davis.

The General Services Administration (GSA) is the federal government's business manager, buyer, real estate developer, telecommunications manager, and IT solutions provider, and contracts for billions of dollars worth of products and services for federal agencies. Martin Wagner, Associate Administrator for Governmentwide Policy at the General Services Administration, acknowledges the new government focus on making procurement procedures easier for the private sector. "There's a new wind blowing through how we operate," said Wagener. "The government is an enterprise that needs to operate as an enterprise…and adjust itself to be easy to do business with."

99% of GSA contracts are for $100,000 or less, and the GSA has a goal of providing 23% of its contracts to small businesses. "One thing we continue to reemphasize is the importance of our relationships to our vendors, all across the board, and in particular our relationship to our small business vendors. If you're a small business, you're very important to GSA," said Wagener.

Wagener also underscores the government's need to buy non-proprietary solutions. "We are really not interested, in the federal government, in nice spiffy proprietary solutions that only work in one place. It's not a good way to market to us. We are endeavoring to make everything interoperable," said Wagener. Fran Nielsen of the National Institute of Standards and Technologies echoes Wagener's statements, indicating the government is working to create an "integrated acquisition environment". "The government is not interested in solutions that only work in one place, isolated custom designs," Nielsen said.

Mike Sade of the Department of Commerce underscores the importance of private information technology services to the federal government. "44% of its procurement dollars goes to information technology, the bulk of that in services," said Sade, who also emphasizes the speed with which the government can now process procurements. "You hear a lot of people talk about how the length of time it takes to buy things in the federal market space. We can buy stuff fast. We can buy stuff overnight."

Information technology products and services are important to many aspects of the federal government, not just defense and homeland security. Martin Wagener of the GSA suggests companies searching for opportunities to sell to the government should approach many agencies and departments. "It's a big government, we spend a lot of money, the money is increasing, but it's not all in the defense department. About half of information technology is going to the civilian side, and that's on a rising trend. There's lots of places where things are bought. Talking to GSA is great, but if you don't go to EPA, DoE, the alphabet soup of agencies, you won't know what their real requirements are," stated Wagener.

Department of Commerce's Mike Sade suggests companies also go to the Office of Budget to help determine which agencies they should approach. "Through the Office of Budget you can learn a lot about an agency, not only in terms of its mission and priorities…but it will tell you where our spending will be, and what are the major projects that we have coming up," said Sade.

There are more opportunities for small companies to market their services to the federal government because the government is increasingly outsourcing its operations. David Drabkin, Deputy Associate Administrator for Acquisition Policy at the GSA, emphasizes how the government, like the private sector, is seeing the wisdom of using outsourced services instead of buying goods and creating departments to service those goods. "People used to like to own everything. Many companies were spending a disproportionate amount of time focusing on owning all those things and trying to keep them up and running and keep a workforce to keep them up and running and it was detracting from their ability to do their core mission. Well, the government has come to the same realization. We don't like to own things anymore."

One of the new initiatives making it easier for businesses to sell to the government is the Services Acquisition Reform Act (SARA), which will help standardize procedures, and make government requirements more like those of the private sector. Introduced by Representative Tom Davis in March 2002, the bill would make significant changes to acquisition law governing the purchase of products and services by the federal government.

The "E-Government Act of 2002," signed by President Bush on December 17, 2002, authorizes $345 million in eGovernment spending over four years to make the federal Government more efficient by using technology and putting more agency information and services online. The E-Government Act also allows purchase schedules, used by agencies like the GSA, to be applied at the State and Local level, making it easier for companies that sell to the federal government to also sell to State and Local governments. For example, the bill allows State and Local government to buy IT and lease IT through GSA Schedule 70 contracts.

The Federal Acquisition Regulation (FAR) also makes it easier for companies to sell to the federal government. Only two federal agencies (FAA and TSA) are exempted from complying with FAR. Increasingly, State and Local governments follow FAR schedules, and even some foreign governments. In 1994, Congress passed the Federal Acquisition Streamlining Act, which was implemented with regulations on January 1, 1996, which added a new part to the Federal Acquisition Regulations, FAR part 12, which allows companies to use business cost accounting systems for government cost accounting.

Another initiative that makes it easier for companies to sell to the federal government has been the authorization and implementation of multiple-award Indefinite Delivery/Indefinite Quantity (ID/IQ) contracts, which help ensure fair competition for companies competing for government contracts. An open competition process helps government administrators select multiple vendors on a contract vehicle. All the vendors on the vehicle get an equal opportunity to compete for whatever the work is. This takes care of the administrative work up front and then makes it quicker and easier for the government to buy and for companies to sell to the government.

While there are a host of websites for specific government agencies and departments, a good place to start is the SBA website at http://www.sba.gov. There are a great number of resources to help companies sell to the federal government, including information on government contracting, procurement opportunities, subcontracting from prime contracts, and special opportunities for technology-based companies.

Small businesses, especially small technology companies, would do well to put some time and energy into marketing themselves to the federal government. It has never been easier to enter the government procurement system. Remember, Uncle Sam Wants You (to sell him your products and services).

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