Give Me 5 Featured in Crain's Detroit
Monday, October 19, 2009
Posted by: Oriana Camacho
Selling to Uncle Sam: Small businesses can bid on contracts of all types
By Nancy Kaffer
WEB RESOURCES ON LANDING FEDERAL CONTRACTS
• Federal Business Opportunities: www.fbo.gov
• Central Contractor Registration: www.ccr.gov
• Find a regional Procurement Technical Assistance Center: michigantac.org
• Small Business Association: www.sba.gov
• Give Me 5, a nonprofit partnership between Women Impacting Public Policy and American Express that offers training to women business owners who want to learn about federal contracting: www.giveme5.com
Ten years ago, Michelle and Aaron were eager to start a business. Michelle's background was in business; Aaron's was in science.
The pair examined funding sources — venture capital, private equity, self-funding on a shoestring budget — then turned to federal contracting.
“We were looking at fuel cells and said, "Why should we get venture capital when the government wants to buy this?'” Michelle Crumm said.
Now, the Crumms' Ann Arbor-based Adaptive Materials, a powder-to-product producer of fuel cells, has about $8 million in annual revenue.
But businesses don't have to make fuel cells to win a government contract. There are opportunities for basic supplies and niche products.
“The government buys everything,” said Paula Boase, program director at the Southgate-based Downriver Community Conference, which operates a Procurement Technical Assistance Center. “Until they are absolutely sure (there's no opportunity), no businesses should be left behind.”
For example, a Monroe-based company recently won a hefty contract to make gun racks for the U.S. Navy, Boase said.
Boase said that the American Recovery and Reinvestment Act, commonly referred to as the stimulus act, creates even more opportunities for small business.
“The Environmental Protection Agency and various other agencies have increased spending and have offered a lot more contract dollars,” she said. “Recovery money is a stimulus to all governmental agencies to spend money, and it has to be done on a quick turnaround.”
And small biz has a leg up: The federal government is required to spend a certain amount of its contracting dollars with small businesses, and an assistance framework exists to help small businesses snag those contracts. If it sounds too good to be true, well, it's not.
The U.S. Small Business Administration provides small businesses with certifications that can lead to exclusive bid options on contracts with small-business set-asides, said Conrad Valle, assistant deputy director in the minority enterprise development division of the SBA's Michigan office.
On the first Wednesday of each month, Valle said, the SBA holds a training session for business owners who want to become certified through the 8a or HUBzone programs.
The 8a program is for socially and economically disadvantaged businesses. To qualify for HUBzone, a business must be located in a historically underutilized business zone, and 35 percent of its employees must live in that zone.
For companies that don't want to pursue SBA certification, there's the federal government's Central Contractor Registration database.
“They need to put as much information in there as possible,” Valle said. “It's a little cumbersome, but it's there, and they should use that database as a marketing tool. That's what contracting officers do to identify potential small businesses they want to do business with.”
Another Web site, www.fbo.gov, allows businesses to look for contracts for items the government needs.
“That stands for "Federal Business Opportunities,' and that's where the government advertises every day what they buy,” he said.
The state's 11 PTACs, each with a defined geographic service area, exist to help small businesses become eligible for and bid on federal contracts. Details can be found at Michigantac.org.
“People get overwhelmed when they decide to do business with government. There are so many registrations and certifications, so we show them how to do it,” said Tim Durand, a PTAC program manager at the Downriver Community Conference.
Durand said the PTAC helps prospective contractors through the certification process and educates them about bid matching. The organization can access contract specifications and historical bid data.
“We also do one-on-one counseling, and when people are bidding, we'll review your bids,” he said. “And it's all free.”
The PTAC can also help the small-business owner understand the guidelines the government uses for pricing.
There are two possible avenues for small-business contracting, Durand said.
“One is by bidding directly on a government contract, or you can sell wares to someone who has a prime contract,” he said.
The PTAC also teaches small businesses how to register with prime contractors.
The registration effort can be cumbersome, but Valle encouraged businesses that are considering federal contracting to forge ahead.
“If you wait, then when you need it it's going to be too late,” he said.
Boase emphasized that government contracting isn't a quick fix for a business with slumping sales.
“You're not guaranteed a contract the minute you bid on it. It takes time to work your way through,” she said.
That's the case for Belleville-based Arthur B. Myr, a paint finishing and metal fabrication business.
Tim Marshke, vice president of field operations, said the company once worked for the government extensively but reduced that segment of its business as spending fell off during the Cold War. The company's work drifted toward the automotive sector. As the automotive sector has weakened, Myr has had to diversify. The company's sales range, Marshke said, is “between $20 million and $60 million. We can live off $25 million, but we can perform up to $60 million.
“We used to be strictly automotive-based paint finishing and fabrication, now we're probably 80 percent nonautomotive and 20 percent automotive,” Marshke said. “Government work fell into place for our diversification (efforts). It fit what we do in both the paint-finishing side and the metal fabrication side.”
Getting certified as a small business, Marshke said, “wasn't hard, but it wasn't easy. You have to stay on it. You have to keep following up. ... People just have to stick with it if you want to do it, and not give up. That's the main thing.”