Small Business Government Contracting 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. The majority of prime contractors have subcontracting requirements that include small business requirements. 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 can 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. FAR 31.2 sets the standards for for-profit businesses.  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.)
  • recordkeeping
  • procurement
  • subcontracting

and may impact:

  • information technology
  • security
  • 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:

  1. Accounting system meeting the standards established in DFAR 252.242-7006;
  2. Earned value management system (variance analysis and reporting) meeting the requirements in DFAR252.234-7002;
  3. Cost Estimating system, consistent with the requirements in DFAR 252.215-7002;
  4. Material management and accounting system, requirements are specified in DFAR 252.242-7004;
  5. Property management system includes two elements: Contractor Owned Assets and Government-owned property and the specifications for contractor owned property are defined in DFAR 252.245-7003; and
  6. Purchasing system, requirements are defined in DFAR 252.244-7001; this system also includes subcontracting plans and monitoring.

Small Business Grants

    Non-dilutive Grant Funds

    The United States government has two significant small business grant programs for Small Business Innovators: SBIR (Small Business Innovative Research) and STTR (Small Business Technology Transfer). These small business programs enable companies to fund high-risk research with non-dilutive funds.

    These funds are not investments so no ownership is surrendered.  These funds are not debt as they do not have to be repaid.  These programs are America’s Seed funds and utilize taxpayer dollars to support the research projects. These funds come with terms and conditions of how the funds are used, tracked, and reported. Small businesses can build their intellectual property within the “terms and conditions” of the program.

    Each program specifies performance requirements including the level of effort by the prime. How much has to be done by the small business and what can be subcontracted out. For instance, the STTR program expects small businesses to take the lead and work with a university or other qualified entity.

    Small Business R&D Programs

    The SBIR and STTR programs also use the FAR 31.2 requirements. Each agency has its guidance on the interpretation, application, and performance under those standards.

    The key to getting the most out of the SBIR and STTR programs is to understand:

    • How the programs work;
    • What the requirements are;
    • The funding request – allowable costs;
    • What the business will be required to do – terms and conditions;
    • How the programs fit in the overall long-term funding strategy of the firm;
    • What if any impact on intellectual property rights; and
    • Why “terms and conditions” impact how the business operates.

    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.

    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
    • suspension
    • 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:

    1. GAP analysis of current system versus requirements;
    2. Design and selection of business systems upgrades;
    3. Implementation of government requirements, training, and monitoring of new systems;
    4. 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.

    Services

    F.O.C.U.S. Resources works with our clients to develop the budgets, rates, and compliance systems related to the program requirements. We work with clients during the proposal process to optimize the funding and financial information, as well as identify and clarify the content of the proposals. We have served as proposal reviewers for the government.

    I’ve written a book, SBIR Basics: The Numbers, on the basics of the financial or numbers aspect of the programs. It explains key concepts and terminology about cost types, rates, and audits.  It also includes a list of policies that are the starting point for compliance.

    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.

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