The U.S. Army Corps of Engineers offers five lessons learned for building relationships with and between small businesses.
by Ms. Crystal E. Teed
At its core, running a successful small business program for a federal agency is about connecting people and business organizations that want to do business with each other.
It makes sense for the government to contract with responsible small businesses. According to a study by the U.S. Army Research Institute for the Behavioral and Social Sciences, the top predictors of a person’s ability to run a successful small business are four personality traits: work drive, emotional resilience, social networking and goal-setting. Each of those traits is conducive to completing government contracts with changing requirements, on time and under budget.
In addition, for every $100 spent with a small independent business, $68 remains in the local economy, as opposed to $43 for large national competitors, according to the Andersonville Study of Retail Economics, a study conducted in Chicago’s Andersonville neighborhood in 2004. The study found that local businesses (often small businesses) generate more economic activity—63 percent more in the case of retail establishments, 90 percent more in the case of services—than nonlocal chains. Researchers have replicated the core finding that small, local businesses create more economic impact in Texas, Maine and Ohio.
The federal government is not the only one that benefits from these interactions. Small businesses want to work with the government because we buy things the commercial marketplace does not, and the timing of cash flows we offer is attractive. Large businesses want to work with small business to harness specialized products, skills or resources. Small businesses want to work with large businesses and other small businesses, which they can do through teaming arrangements or formal mentor-protégé programs.
The U.S. Army Corps of Engineers (USACE), which has met its overall small-business utilization targets for the past five years, offers five tips on how to succeed in making the necessary connections, and more.
TIP #1: REDEFINE SMALL BUSINESS ‘GOALS’
Grace Fontana, associate director of the Office of Small Business Programs (OSBP) in USACE, attributes the command’s success to a concentrated focus on maximizing small business participation, as opposed to numerical targets or goals.
For example, the Galveston District has significantly exceeded its HUBZone (Historically Underutilized Business Zone) participation rates on a regular basis. However, Melea Crouse, assistant director, Southwestern Division OSBP, does not view this as a major accomplishment because there are an unusually high number of HUBZones in the region. (The HUBZone program of the U.S. Small Business Administration (SBA) helps small businesses in urban and rural communities gain preferential access to federal procurement opportunities.)
Instead of focusing on goals as raw numbers, Fontana’s division focuses on finding and connecting people and businesses who want to work together.
TIP #2: GATHER CONTACTS
As engineers know, connections require connection points. The same is true in small business: If you want to make connections, you first need points of contact.
Industry outreach is critical. Small businesses typically make sales based on relationships. Giving them a personal point of contact can help acclimate them to the government contracting culture. All USACE divisions perform outreach through traditional industry days as well as at conferences and other venues as appropriate, in addition to posting to Federal Business Opportunities (FedBizOpps), at www.fbo.gov. FedBizOpps is the central website that all federal agencies use to post open procurements that exceed $25,000.
For every $100 spent with a small independent business, $68 remains in the local economy, as opposed to $43 for large national competitors, according to the Andersonville Study of Retail Economics, a study conducted in Chicago’s Andersonville neighborhood in 2004.
Gathering contacts doesn’t stop with current contractors and potential offerors. It includes all professional resources necessary for building bridges—the earlier, the better. Involving interested people and potential resources early in the process yields benefits. For example, acquisitions with elements that will need review at any point by the principal assistant responsible for contracting (PARC)—a high-ranking contracting official who fulfills responsibilities defined by Army Federal Acquisition Regulation Supplement and HQDA policy, including nominating contracting officers, appointing source selection authorities, ratifying unauthorized commitments and approving determinations and findings—or someone higher call for the PARC to be invited to the initial kickoff and subsequent meetings.
TIP #3: PROVIDE BUILDING BLOCKS FOR PAST PERFORMANCE
One of the biggest hurdles new businesses face is gaining past performance. Without positive past performance, it may be difficult to win a competitive contract award. Doing business with large contractors as a subcontractor helps small businesses maintain positive cash flow while gaining federal government industry experience and building relevant past performance. (Contrary to popular misconception, relevant past performance can take many forms; it is not limited to prime contracting with the government.)
USACE divisions maintain a database of prime contractors that would like to be matched with subcontractors. When subcontractors contact USACE districts and centers for information on teaming, small business specialists are available to help make that connection.
TIP #4: BUY LOCAL
When a local project is likely to have significant economic, infrastructure or political impact on a specific region, USACE typically conducts one or more industry days with local residents. For example, when a recent development project for more than $2 billion was in its initial development phase in El Paso, TX, USACE collaborated with the local chamber of commerce and the SBA to conduct an industry day. Roughly 50 attendees contributed to a discussion of how to best serve the community and ensure that local small businesses had a fair chance to compete for the work. Once the pre-solicitation was prepared and USACE went back to the public, more than 700 interested businesses registered and attended a second industry day.
A strong working relationship with the SBA helps. USACE small business specialists at the Great Lakes and Ohio River Division OSBP take advantage of the fact that they share a facility with the SBA to maintain informal face-to-face working relationships with SBA employees and stop by periodically to chat. When the division learns of a new acquisition, learning more about how to involve small businesses is as simple as stopping by the desk of an SBA acquaintance, who quickly pulls up potential qualified sources.
Not everyone gets to share facility space with the SBA, but in-person and virtual visits via videoconference can help develop solid working relationships with the local SBA office.
TIP #5: CHALLENGE BUSINESS AS USUAL
Use past information from the Federal Procurement Data System – Next Generation (FPDS-NG) to the future advantage of small business and the government, and as a tool to make sure “business as usual” isn’t keeping small businesses from competing. In a recent example from the Southwest Division, a prior indefinite-delivery, indefinite-quantity contract required that offerors have the capability to simultaneously work up to three task orders. But in FPDS-NG, there was no evidence that more than one task order was ever issued simultaneously under the prior contract vehicle. After working with the contracting officer to redefine contract requirements, it was awarded to a small business that went on to perform successfully.
The USACE approach to successful small business contracting involves a focus on success that goes beyond the numbers. By seeking to build contacts and connect them, and by challenging the process to work better each time, the USACE Office of Small Business Programs is strengthening U.S. Army contracting.
For more information, contact the USACE OSBP at SmallBusinessOffice@usace.army.mil, or go to http://www.usace.army.mil/BusinessWithUs/SmallBusiness.aspx.
MS. CRYSTAL E. TEED is the chief of policy for the USACE OSBP. A former small business owner in the financial services sector and a licensed attorney, she oversaw the purchasing systems of several major contractors in her time as a corporate administrative contracting officer with the Defense Contract Management Agency. She holds a J.D. from Washington & Lee University School of Law and a B.S. in financial management from The Catholic University of America, and is Level III certified in contracting.
This article was originally published in the January – March 2016 issue of Army AL&T magazine.
Subscribe to Army AL&T News, the premier online news source for the Acquisition, Logistics, and Technology (AL&T) Workforce.