CEOs, founders and other entrepreneurs from the small business world sound off about what’s right and what’s wrong with how the Army engages with small business
For this issue of Army AL&T, we reached out to small businesses across the spectrum of products and services to find out what matters to them in doing business with the Army. We wanted to know how small businesses handle the ins and outs of working with the government, from dealing with bureaucracy to responding to requests for proposal (RFPs), to their thoughts on set-asides and contracting vehicles, to the surprising Catch-22s they face.
Most of our respondents are companies that provide services. Most are grateful to have the Army’s business, but most also thought that the government could make it a lot easier for them to do business. Some find the set-aside system not as advantageous as it could or should be; in too many cases, they said, the small business ends up as a middleman between the government and a large business. Those few that provide products find that the system of small-business incentives doesn’t really work for them. One frustration we heard was with NAICS (North American Industry Classification System) codes, which were never intended to classify businesses for the purpose of actually doing business. Instead, they were developed to categorize businesses for the purpose of gathering statistics.
The story we heard most often was what you might expect from the kinds of people who start small businesses: a story of resilience, determination and innovative thinking. Nearly everyone saw a niche to fill and had a better idea for how to fill it.
I started Halfaker and Associates over nine years ago as an individual providing consulting under a purchase order-based contract. As an Army veteran, I had a strong military background and expertise with the Army, but it was challenging to launch from a one-person business to a company competing for prime contracts.
When it comes to small business set-asides, there are definitely both benefits and downsides. Small business set-asides are great in that they try to ensure that small businesses are awarded a fair proportion of government contracts. However, it can be a double-edged sword if there is a $100 million opportunity set aside for small business and the small business cannot perform at that scale. Small business set-asides can also force small businesses to graduate (to the mid-tier) too early, before they’ve had time to build the necessary past performance, processes and internal infrastructure to compete with big companies. There’s no gradual off-ramp for these types of businesses, and mid-sized companies would benefit greatly from that type of program.
Responding to RFPs can be challenging for small businesses. It’s important to not waste time and energy chasing and capturing something that you don’t have customer knowledge (of) or is outside of your capabilities. We focus on opportunities that (we) have a high probability to win, meaning we know the customer, have applicable past performance and have performed in-depth analysis and research on. It’s also important to know how to leverage the strengths of your employees. Leveraging your own technical experts to provide input, draft content or review documents can help refine your proposal and allow for feedback that you may not have received if you kept your response with your proposal team.
Small business set-asides can also force small businesses to graduate (to the mid-tier) too early, before they’ve had time to build the necessary past performance, processes and internal infrastructure to compete with big companies.
Simformotion is licensed by Cat Simulators—a subsidiary of Caterpillar Inc.—to create training simulators for the heavy equipment Caterpillar manufactures. It was founded in 2009 as a sister company to CSE Software Inc.
CSE develops the simulation software for each machine model (that Caterpillar makes). Simulation, in and of itself, is a very specific niche, and heavy equipment simulation is even more so. We view our niche, developing Cat Simulators, as a positive one. It keeps our employees and leadership focused on specific goals and objectives. We’ve partnered with the top heavy equipment manufacturer in the world, and each machine is carefully modeled to Caterpillar’s exacting standards. We work with subject-matter experts (SMEs) to ensure that each training exercise is technically correct and performed safely. We sell the simulators on a global scale, but are proud that Cat Simulators help Soldiers across the United States keep their skills sharp and ready for deployments or when needed during disasters at home. Cat Simulators can be found at several military units, including the schoolhouse at Fort Leonard Wood, MO.
While there may be obstacles for a small business, we see many more positives to doing business with the Army and have learned how to overcome any obstacles that we are faced with.
Our leadership takes a hands-on approach to running the day-to-day operations of the company. They have the ability to meet and make quick decisions that would take much longer in a large, bureaucratic company.
We are often asked if we can implement certain changes or ideas into our simulators. We continually conduct research and development and have a dedicated testing department to ensure that we can implement changes, upgrades and advances successfully into our simulators. Examples include everything from new training exercises and a motion system, to ongoing research on hardware such as virtual-reality head-mounted displays.
We cross-train staff to be able to scale our personnel resources as needed. For example, a software developer can conduct on-site training or technical support staff can assemble simulators at a military site. While we have dedicated personnel in every area of the company, cross-training allows us to meet deadlines without compromising the quality of our products and services.
We have access to Cat machines, SMEs and data whenever we need to consult on machine parts, talk about training or meet with decision-makers. Cat has a dedicated department for defense and federal products, and we work right alongside them, attending meetings and shows where Cat Simulators is present.
Throughout my career, I’ve been a dedicated field geologist. I had turned down growth opportunities because I wanted to be doing the hands-on work as long as I physically could. I was clueless on the administrative and business operating sides of the house, except (to) turn in my time sheet and expense report and be happy every second Friday. Life was good until 2008, when the economy took a turn for the worse and the environmental fields took a heavy hit.
Environmental consulting is a high-risk field because even though most companies preach that they want to do good by it, it’s the first program to get slashed in times of economic crisis. By dumb luck, I was visiting some friends when one of them approached me about working for her oil and gas firm. She knew my background was in geophysics. So, I found myself transplanted from my home in Michigan to Oklahoma, working as a horizontal geosteerer for an oil and gas company (analyzing subsurface geological data in real time to ensure that horizontal drilling is on target). After about one month, the signs were on the wall: I had made an “oops” decision. Sure, I was making tons of money, but I struggled to adjust to the physical environment. I missed home, which had never been the case throughout my life and seven years of military service.
I voluntarily relinquished my duties and headed home to start from scratch in the worst economic crisis our generation has seen. I started with a lawn and landscape company, since I had been mowing and landscaping since I was 8. I borrowed money to buy equipment and quickly found myself doing property management jobs for HUD (the U.S. Department of Housing and Urban Development) contracts. That went well until winter.
Then, again by dumb luck, a friend called me out the blue and asked what I knew about radon. He wanted to start a business installing radon mitigation systems. I called another friend, Pat, because he once ran an environmental business and was a well-respected environmental consultant taking a break from the risks of the field.
After a meeting, while Pat and I were walking to our trucks, he asked if I had ever considered starting my own environmental business. After my laughter had subsided, he said, “Well, John, you’re a disabled veteran, look into it.” Three days later, I was at a small gathering, and a gentlemen, Dave, approached me.
(Dave) was a 60 percent owner of a small environmental firm and lived in a really big house, with a boat—two of them, actually. He knew I was an Army veteran. He asked, “John, have you considered starting your own environmental business?” Instead of laughter, my face assumed a quizzical look and the word “karma” was running through my thoughts. My response was, “Let’s talk.” That following Monday, I was sitting in Dave’s office. He wanted to invest.
I started learning all about government contracting, FAR (Federal Acquisition Regulation) clauses, FBO (Federal Business Opportunities) and what it meant to be a service-disabled veteran-owned small business (SDVOSB). In May 2012, Dave made a small investment to get my company off the ground. TRINE Environmental Inc. was born. By October 2012, I had won my first contract—or so I thought. It was a (U.S. Department of) Veterans Affairs (VA) contract, but I didn’t have CVE verification. (The Center for Verification and Evaluation, under VA’s Office of Small and Disadvantaged Business Utilization, certifies veteran-owned businesses.) I had my CVE process complete by December 2012 and was awarded the contract—which I still hold—in January 2013.
Fast-forward to doing business with the Army: I have learned they have tremendous obstacles, with the biggest one being time in grade (how long have you been in business?), with “Can you do the job?” being a close second.
The trick I’ve learned to overcoming both of these obstacles is to have a good team supporting my company and be prepared to dig the trenches for a long fight if they say no. I have had to use the protest process (twice for one contract because contracting officers were changed) and won.
Overall, TRINE has been in business 3.5 years, and we’ve won about 21 contracts to date. We specialize in environmental consulting (investigations), geotechnical investigations, environmental remediation, asbestos abatement oversight and geophysical investigations.
E-MAPS focuses on information interoperability and management, computerized geographic information, bridging the gap between users and developers of information technology, and ontology (the study of reality and how it’s represented, applied to how information is organized and shared; you take weather into account when designing a ship, and ontology into account when designing an information technology system). In 25 years, E-MAPS, support has included an 18-month U.S. Army Corps of Engineers environmental survey, military experimentation, organizing repositories of information developed in advanced concept technology demonstrations (ACTDs) and studies on information sharing. Our customers have included the Army, ACTDs, the Marine Corps Warfighting Laboratory, the Office of Naval Research and the Air Force Research Laboratory.
If the Army wants to realize the potential benefit of small business innovation, the Army needs a knowledge management system whereby (1) information on small businesses’ ideas, services and products can be placed and cataloged, and (2) government officials, developers and other contractors can discover these ideas, services and products when a need for them arises.
Representatives of the Army and other DOD organizations constantly talk with representatives of small businesses but usually do not (1) know who or what organization within the Army has or will have a need for the small business’s idea, service or product or (2) have an enterprise knowledge system into which they can enter and catalog information provided by the small business. This is why a knowledge management system is needed where important information about an idea, service or product can be recorded and cataloged. Lacking such a system, the Army as an enterprise (or indeed DOD in general) remains unaware of almost every idea, service or product offered by small businesses.
(Such a) system should not be confused with repositories such as the Defense Technical Information Center, which does not separately list small business offerings and ideas. The lack of such a knowledge system leads the Army to (1) inadvertently duplicate development work that a small business has already completed and explained to an Army representative; or (2) fill a need by purchasing a second-rate product even though the Army has already been informed of a first-rate product that will fill the need.
Covington and Associates LLC is a federal and multistate designated small and minority business. While the company is not veteran-owned, our program management staff is primarily Army veterans. Our firm specializes in business continuity and disaster recovery planning. Additionally, we provide solutions in the area of automated systems availability management (ASAM) software.
Our owners have (in the aggregate) more than 35 years of business experience providing solutions to the government and commercial entities. We started this company over five years ago with an eye to provide a greater level of customer service to our clients than is currently available from our competitors. (We) started actively soliciting DOD divisions (including the DA) with guidance from the DOD Office of Small Business Programs.
We believe that the Army in particular is a prime candidate for our ASAM solutions. These solutions ensure up-time availability in a client-server environment. There is currently no other software available today that will assist the Army in maintaining its systems readiness state. Also, DOD states that systems readiness is a primary objective for all the services.
Small business set-asides and incentives are a great opportunity to get small businesses like ours to the table. Where we find challenges is in getting the invitation to the table. What I mean is (that) Army (organizations) do not know about our solutions and, as such, do not specify them in ongoing RFPs. Thus, if you have a problem and don’t know that we have a solution, you don’t ask for it.
We think it’s extremely important to continue with small business set-asides. These, at least, give us an opportunity to open doors that potentially would have been closed except to the larger vendors.
When we see opportunities that manifest themselves within large corporations, we generally reach out to them with our solutions in an effort to subcontract under those large firms and to assist them in meeting their small business requirements.
There appears to be tremendous growth in the need to meet requirements for systems availability. Our strength is in providing an in-depth solution that gives us the ability to allow any Army division to meet its availability requirements.
If I could change one thing in the way that the Army does business, it would be to provide a doorway for new technologies.
We would welcome the opportunity to present our products to any IT facility that is challenged right now with up-time availability, or is concerned that its environment may not be recoverable 100 percent of the time.
SYNEXXUS is a CMMI Level 3 certified electronics design, manufacturing and engineering services company headquartered in Arlington, VA, and an SDVOSB. (The CMMI Institute certifies organizations in Capability Maturity Model Integration, an internationally recognized framework to guide organizations in benchmarking their capabilities and identifying performance gaps so that they can develop capabilities efficiently.)
As a program executive in the DOD Office of Force Transformation from 2001 to 2006, I was exposed to a number of challenges facing DOD. Specifically, we were charged with showing the DOD acquisition community that it was possible to deliver on a program ahead of schedule and under budget. I am proud to say that we did that with two of the programs I was associated with: the Stiletto (special operations intelligent boat operations) and Operational Responsive Space (a tactical micro-satellite effort). Both programs have grown considerably and are still supporting combatant commanders 10 years later.
When I left uniform in 2006 (as a Navy commander, a strike/fighter pilot), I was asked to introduce a cockpitlike architecture into the ground vehicle community so that Soldiers and Marines could have the same situational awareness that our aviation community enjoys, as well as data distribution systems that would allow all government-furnished equipment and software to work together. At the urging of the secretary of defense, I started SYNEXXUS with that goal in mind.
Starting a business is not for the faint of heart. Fortunately, I had a team of first-round draft picks to assist with this endeavor, as well as support and encouragement from senior military officers and business leaders. When SYNEXXUS was approached by the Rapid Equipping Force in 2008 to deliver this capability, I gave my team only one directive: Deliver a system where the driver or commander in the vehicle could access all communications equipment, sensors and weapons, as well as ground robots, all from the same display within an arm’s reach, similar to the way my F/A-18 was configured.
Ground vehicles don’t have the luxury of millions of dollars’ worth of avionics gear, so alternative approaches were needed. SYNEXXUS accomplished this feat from design to fielding in Iraq in 96 days—and under the $70,000 firm fixed-price contract.
When it comes to return on investment, my shareholders are those men and women deployed who need to have access to information in order to be able to make a survivable life-or-death decision.
SYNEXXUS has cracked the code of solving complex engineering problems supporting programs such as ground control stations, smart munitions, fixed-perimeter security, communication centers, maritime patrol craft, mission command and network on-the-move. In fact, SYNEXXUS has been fortunate to have been awarded over 75 contracts in its history, averaging about six to seven contracts per year.
However, as an SDVOSB, we have yet to be awarded a set-aside contract as a result of this status. As we have discovered, the majority of those contracts are services-related. SYNEXXUS is one of the few (SDVOSB) design, manufacturing and integration companies that remain in business. Few if any of the SDVOSB set-aside contracts are for products, as those are considered reserved for the large traditional legacy electronic companies.
SYNEXXUS has made this point to numerous acquisition officials over the last several years, but we have seen little change—as they state, “If there are two SDVOSBs that could compete, we would make the RFP SDVOSB.” And quite frankly, if a company like SYNEXXUS, which is now adept at maneuvering within contracting circles, is having issues with set-aside contracts, other companies must be having even more challenging issues.
It’s actually gotten to a point now that SYNEXXUS does not consider small business set-asides as viable because in the past, while the RFP was for small business to participate, the government sponsor used the small business to act as the middleman for the government agency to procure a large business’s products. The result was that the small business would take a cut for packaging (repackaging) large business products for the government customer so that the government service could take credit for small business participation.
With all that said, owning a small business supporting DOD is an honor and a responsibility that we cherish. In fact, it’s quite personal. My son is a midshipman at the Naval Academy Prep School in Newport, RI, and would like to be a Marine infantry officer. I want him riding in the most technically advanced vehicle the United States has to offer.
I also take great pride in being able to employ individuals who, in turn, can provide for their families. Creating jobs and contributing to the economy are keys tenets of any small business, but when it comes to return on investment, my shareholders are those men and women deployed who need to have access to information in order to be able to make a survivable life-or-death decision.
I started Severson Group after retiring from the military in 2004 following 27 years in the Marines. It had always been my plan to start my own firm. My military experience in logistics provided me the skills to launch a small government-contracting business in San Diego, CA, as well as the insight and knowledge into how private industry conducts business with the federal government. I wanted the company to focus on service contracts because of the numerous contract opportunities in that space.
As a small 8(a) and SDVOSB firm, we believe our service offering adds a more direct and personal interface to the government in a way that large businesses will never be able to do. Small businesses add superior response time and robust capability without the red tape and the many approval processes (a decision) takes in large business.
(However,) the incentives for set-asides are grossly mismanaged and not properly monitored. Prime example: My primary NAICS code is in food service management. Every Army food service contract has a component that gives Randolph-Sheppard Act blind vendors priority. (The Randolph-Sheppard Act “provides persons who are blind with remunerative employment and self-support through the operation of vending facilities on federal property.” For more information, go to http://www2.ed.gov/programs/rsarsp/index.html.)
Small businesses participating in contracts that give the Randolph-Sheppard program a priority is the big problem. If the Army small business office conducted a survey to determine how many food service contracts are under the Randolph-Sheppard Act and how many of those contracts have the same teaming partner, they would understand there is little to no opportunity for competitive small business participation because there are only one or two companies that the Randolph-Sheppard vendors are teaming with. Those teaming partners basically have these opportunities cornered.
I believe the way the program is set up, the system is being manipulated. The Army can fix this in two ways:
Make the set-aside whatever it chooses, such as 8(a), SDVOB, HUBZone or small business. However, demand that the teaming partner to the vendor also has to be in one of the set-aside categories. If the opportunity is set aside for one of the above categories, the contracting agencies should evaluate the set-aside company and then force the state’s Randolph-Sheppard vendor to team with the company that the government has selected, based on that company’s proposal meeting the RFP criteria. This will eliminate one company (that is not a small business) from getting all the set-aside teaming opportunities.
Continue to give the blind priority, but also have the Army sole-selection team approve the 8(a) or SDVOSB firm separately that would (team) with a blind vendor. Right now, the Army is allowing the state/blind vendor to make the final decision as to which company will provide food service to the Army DFAC (dining facility). The vendor picks the teaming partner based on who will give him the highest percentage of profits from the project.
Investigate the Randolph-Sheppard program. Most of the small businesses that can do the work will not bid because they know that the blind vendor has already determined who its teaming partner is going to be, and, with an absolute priority, there is no chance of losing.
Why not deploy proven technology to leverage assets in the field? It’s a question we ask after working on many DOD technology-based initiatives over the years. We have observed a common thread across successful deployments: DOD initiatives that approach technology advancements in a similar manner to commercial, for-profit enterprises appear more likely to deliver positive results.
In the commercial sector, it is unusual to see an organization undertake a large custom project that results in a unique solution. Instead, commercial enterprises use proven solutions within existing workflows to realize immediate results. These companies continue to invest in new technologies that can deliver extended benefits in the future, but only after gaining initial results from proven technologies.
In DOD, commercial off-the-shelf (COTS) solutions can quickly be overlooked or swallowed up within a large custom project, often led by a systems integrator. This custom-first approach misses out on the value of deploying COTS and providing helpful tools to teams more quickly.
As background, Librestream provides virtual collaboration technology, which is a specialized offering to a niche market segment within DOD. For example, the National Guard Weapons of Mass Destruction Civil Support Team selected the Librestream COTS solution to review potentially hazardous situations instantly and securely. This particular solution used our EX-certified rugged cameras (an industrial teleconferencing camera) to provide visuals in potentially hazardous environments. In another case, the U.S. Air Force uses this same technology as part of its Joint Engineering Disposition Infrastructure program to remotely engage experts on inspections and diagnostics related to aircraft at various Air Force bases. While these are two examples of COTS-based initiatives, the majority of cases often involve futuristic technologies that result in highly customized solutions.
Librestream can offer this kind of niche solution, as the market size supports this degree of specialization for a small business. DOD and commercial customers benefit from a technology that is highly specialized in troubleshooting and assessing remotely from difficult environments. Our expertise in this area can assist with best practices for adoption and deployment strategies.
As a small business, it is highly rewarding when we can engage directly with DOD and commercial enterprises on projects that deliver immediate results. We feel there can be strong value in this more commercial approach to initiatives that incorporate COTS products and deliver results in stages.
This article was originally published in the January – March 2016 issue of Army AL&T magazine.
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