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 Can Minority Owned, Small Businesses, HBCU's, NGO's, and MSI's Win Gov. Contracts in 2014?

 

"The government is a steady customer once you break in and understand the rules. They pay more steadily, they provide referrals, and the people you meet can lead to a lot of other business,” says consulting expert Julia Weeks. Weeks goes onto explain that "the federal procurement process is a unique market, with a big learning curve, which tends to be even bigger of a learning curve for minority owned businesses". Week's research shows, " a decline in the federal contracting budget-which is down $35 billion (6 percent) since the fiscal year 2009," making competition that much more fierce according to Julia.

Julia Weeks is president and CEO of Womenable, a research, program, and policy development consultancy whose mission is to improve the environment for women-owned businesses worldwide. As an American Express OPEN research advisor, she produces annual reports for the American Express OPEN for Government Contracts Program tracking trends in government contract procurement among women- and minority-owned small businesses. A study released this month reports on the findings of her online survey of 684 small business and compares contracting trends for 2012 (the most recent year for which data are available) to previous years.

Weeks says the studies have found that small business owners invest significant time and money—an average of nearly $129,000 annually—on tracking and winning government contracts. “Small businesses spend money on staff time to go to meetings and learn more about the agency. They’re spending time going to conferences and meetings and traveling to Washington or wherever the federal agency might be. It’s a significant investment of time and money,” Weeks says.

Breaking out data for minority-owned small firms reveals that they invest even more. From minority business owners, the average response to the survey question, “How much money would you say that your business has invested, including both direct cash outlays and salaries for person-hours, seeking federal contracting opportunities in 2012?” was $143,000. The figure is 11 percent higher than the amount invested by all active small business contractors and 32 percent higher than the investment minority business owners made three years prior. Of the three most populous minority groups, Hispanic contractors claimed an average investment of nearly $155,000 on pursuing federal contracts in 2012; Asian-American contractors said they spent and average of $141,000; and African American contractors spent close to $111,000.00

Minority-owned businesses need to spend more because they lack connections, Weeks says. “They have weaker links to peers, and other business owners who have this experience. Not having an extensive support network means they have to go to more meetings, and invest more in learning and ramping up.”

According to SBA.gov,  formal goals are in place to ensure that small businesses get their fair share of work with the federal government.  In fact, each federal agency must set an annual goal for participation in its contracts by various groups.

Below is a sampling of the statutory goals established by federal executive agencies:

The groups that are covered by these goals are small businesses, some with specific characteristics:

  • Small business concerns

  • Small business concerns owned and controlled by service-disabled veterans

  • Qualified HUBZone small business concerns

  • Small business concerns owned and operated by socially and economically disadvantaged individuals

  • Small business concerns owned and controlled by women.

    If you would like to send a comment, a video, or want to be considered to be on our show Discussing DC with OGTV, send an email to kmoore@opengovtv.com, and lkebe1@yahoo.com

 

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