Small Business Opportunities
You can find many opportunities to do business with the US Government as a contractor or as a grant recipient. The US government has established many programs that focus on getting small businesses like yours involved in procurement and R&D support. These programs include set asides for contractors, small business contracting and subcontracting requirements.
Small as a Competitive Advantage
As a small business, you can have a competitive advantage for certain contracting opportunities – not just the set-asides. In fact, the majority of prime contractors have subcontracting requirements that include small business requirements. In order for your business to take advantage of these opportunities, you have to be able to demonstrate not only your product, service, or technological capability to deliver what the contract or grant covers, but the ability to do business professionally. When I say professionally, I mean that you have to have in place the business systems that demonstrate your ability to manage the project, the financials, and every other aspect of your business. The government (and its primes) need to know that you have the ability to stay in business, to manage the funds that you will be paid properly and know how to make your business thrive.
Small Business, Big Expectations for Contractors
If you want to be a small business government contractor, then you have to meet the standards for all contractors. Your business systems have to demonstrate that your business can manage the project, the funds, and other aspects of the contract to the required standards. The standards for for-profit businesses are set in FAR 31.2 (Federal Acquisition Regulations). When you look at these requirements, you will find that doing business with the government means will impact every aspect of your business, but in particular:
- accounting – cost and financial; invoicing; cost allocations; cost tracking; variances; and more.
- intellectual property
- asset management
- human resources (timekeeping, payroll rates, etc.)
and may impact:
- information technology
- and many other areas.
Most agencies have taken the basic FAR requirements and developed their agency-specific standards. For instance, the Department of Defense has the DFARs which specifies six specific systems that must be in place. These systems are:
- Accounting system meeting the standards established in DFAR 252.242-7006;
- Earned value management system (variance analysis and reporting) meeting the requirements in DFAR252.234-7002;
- Cost Estimating system, consistent with the requirements in DFAR 252.215-7002;
- Material management and accounting system, requirements are specified in DFAR 252.242-7004;
- Property management system includes two elements Contractor Owned Assets and Government OwnedProperty and the specifications for contractor owned property are defined in DFAR 252.245-7003; and
- Purchasing system, requirements are defined in DFAR 252.244-7001; this system also includessubcontracting plans and monitoring.
Day One Compliance
When you receive a government contract or grant, whether as R&D or procurement, you are required to have in place the business systems, controls, and other requirements of the programs and the contracts (legal agreement). Those requirements are to be in place on Day 1! Many organizations are not compliant on day 1 and put their organizations at risk because of non-compliance. The risks include:
- loss of award
- repayment of funds including interest, penalties, etc.
- civil and criminal penalties
- debarment (banned from contracting).
Get Ready to Do Business with the Government
For many small businesses, the process of implementing all the requirements seems overwhelming and can be costly. Working with our clients, FOCUS uses a multi-phase approach that includes:
- GAP analysis of current system versus requirements;
- Design and selection of business systems upgrades;
- Implementation of government requirements, training, and monitoring of new systems;
- Customization and revision for new requirements or special terms and conditions.
If you are considering becoming a prime or subcontractor on a government contract or grant, take the time to understand the requirements and develop a strategy and a plan for pursuing the opportunities and putting in place cost-effective, compliant business systems. FOCUS can help! I’d love to talk with you by phone. Give Lea a call at 919.234.3960.
Articles and Podcasts
- Wrong Client (7/31/2014) - The profitability of a company is significantly impacted by its ability to identify both the core client characteristics that make for a good client as well as those that do not fit with your business expertise or require more support from key resources than can be supported by the revenues they generate. For example, last year a company was referred to me and I accepted the engagement. This company was seeking government grant funding to develop technology. It was a one-person operation and the founder did not personally have the technology credentials to do the research and development of the ...
- The National Single Audit (A-133) Sample Project Results – Good Audit Results May Not Mean Your Audit Measures Up (7/31/2014) - The President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency recently completed the National Single Audit Sample Project to determine the quality of the single audits being conducted. The sample consisted of 208 audits conducted between April 2003 and March 2004 and was subdivided into two groups: recipients expending more than $50 million (Large recipient) and those expending between $500,000 and $50 million (Small recipient) annually. The results were as follows: Sample Total Sample Large Recipients Small Recipients Acceptable 115 48.6% Limited reliability 30 16.0% 36.5% 51.8% Unacceptable 63 35.5% 208 Those audits viewed as ...
- The Grant Proposal Budget: Seven Things to Remember (7/31/2014) - The grant proposal budget is an often-overlooked opportunity to improve the proposal’s chances of winning. The budget is a communication tool to the reviewers, just like any other element of the proposal. What the budget does or doesn’t do is let the reviewers know what you do or don’t understand about your research project in terms of cost and resources, how it fits into the total scope of your business financially, and what you understand about the particular rules and requirements of the grant programs and agency guidelines and rules. The proposal budget can become a make or break for ...
- The Complexity of Business Compliance (7/31/2014) - For small businesses, and perhaps businesses of any size, compliance with the rules and regulations of being in business is becoming more and more complex. It’s getting to the point, it seems, that it is almost impossible to be 100% in compliance, mainly because you can’t find all the elements you need to comply with. In addition, when you ARE working to comply, “the system” works against you: The filings and reports you submit get lost by the agencies, and if you are fortunate you sent them certified return receipt with tracking numbers and can provide verification that you sent ...
- Stay Tuned to the SBIR Program (7/31/2014) - The U.S. Senate had a bill last year, and earlier this month the U.S. House of Representatives had a bill (H.R. 5819) to reauthorize and/or “modernize” the Small Business Innovation Research Grant Program (SBIR). The House version died when it reached the Senate, and the Senate is currently working on a new version of a bill. What seems to be the issue? Venture capital. The House bill redefined the “small business” to allow more venture capital investment and still be able to participate in the SBIR program. This raging debate has small businesses and small business advocates pitted against venture ...
- On-shoring – Keeping Business in US (7/31/2014) - The impact of jobs moving overseas (off-shoring) cannot be fully quantified. It includes the impact on employees, the community, tax revenues, and other intangibles. Keeping business in the US isn't an entitlement. It is and will continue to be a function of ability to Compete on something other than price, Generate efficiencies of scale and scope through innovation and application, Develop a core message that conveys the value proposition, Understand market pressures, Influence market perception, Leverage the risks and fears of the market, and Answer bottom-line needs through a value proposition Who is best equipped to make on-shoring the logical, ...
- Non-dilutive Funding An Important Chapter in A Start-up Story (7/31/2014) - Every venture begins with an idea and the resources of the founder(s). Then come other sources, including MCDV (the credit card companies) and our friends, family, and acquaintances. Once we’ve tapped into all those we know well and not so well, we begin to expand into the network of those people known by those we know. We’re looking for funding – refining our story and our ability to persuade and pitch. When we move beyond the friends of friends, however, our approach must get more sophisticated, and we must understand the rules of raising capital. From the documents and the ...
- Gatekeeper or Dam? (7/31/2014) - Have you ever been trying to get a project going or actually working on it and things just aren’t happening? And has that happened to you when it’s a project requested by someone who is in a position to want that project to happen because they have a need for it? The person who needs or wants it may be the CEO of the company, a managing director of a division or a well-placed person in the hierarchy of the federal government system. They know what they want. They’ve asked you to help them make it happen and you get ...
- Economic Stimulus Fund to Flow to Businesses: Grant and Research Programs Open Taps (7/31/2014) - The government is utilizing existing agency structures and federal funding assistance programs to award stimulus funding for research and innovation projects. From the Department of Energy, Department of Health and Human Services and others, projects are in the proposal process, and businesses of all shapes and sizes are looking for part of the action. The big question is, “How prepared are these organizations for the reporting and compliance requirements that are imposed on the organizations as a result of taking these funds?” Have they considered: Job creation or saved tracking Audit and reporting requirements Accounting and business management system redesign ...
- $100 Billion Savings Target for DOD Spending: (7/31/2014) - If you’ve ever spent the day working on compliance with government grant and contract awards from the recipient side, you will understand the following statement: The biggest cost reductions opportunities are in reducing the complexity and variation of requirements on government funded projects. When it comes to increasing costs, I don’t think the biggest cost savings are going to be found on the technical side of government spending, but on the regulation and compliance standards (the “soft side” of doing business with the government). A Conversation with the Government This week has been an exercise in hitting a moving target ...
Lea has worked with over 500 government-funded small business entities utilizing SBIR and STTR grant programs, government procurement contracts, GSA, and other funding instruments. Lea also works with small businesses making the transition from R&D to commercialization including those seeking to become government prime or subcontractors. She specializes in creating government compliant business systems and audit preparation and response.
She has been a national speaker on government systems compliance with an emphasis on the strategic, financial, and operational systems. She has spoken at national and regional conferences in Texas, Virginia, North Carolina, Nevada, and Washington, DC. She has also appeared on TV in Atlanta and Washington DC area to talk about how government, business, and universities play a role in innovation, the economy, and businesses.
Lea contributed language to the North Carolina legislation that created the matching fund for SBIR and STTR recipients. She is also the author of the book SBIR Basics: The Numbers, which translates the complex government accounting concepts into understandable terms for non-accountants and non-financial managers. She has published five other books on marketing, startups, and other topics.
She has provided expert witness testimony for federal court cases involving compliance and business systems for government grant and contract recipients.