Contracting Opportunities for Veteran Entrepreneurs
This self-paced training exercise is an introduction to Federal contracting opportunities for Veterans. Topics include basic information about Veteran-owned businesses and opportunities, services available to small Veteran-owned businesses, small business incentives, and government procurement methods.
Course Objectives
The course has seven key objectives:
– One, explain the importance of Veteran-owned businesses to the U.S. economy
– Two, list services available to Veteran-owned businesses
– Three, list small business incentives that Veteran-owned businesses can take advantage of
– Four, list government procurement methods
– Five, describe the best ways to procure government contracts
– Six, explain Federal Business Opportunities
– Seven, explain the importance of industry clusters and SBA certification opportunities
Course Topics
This course will address seven areas for Veterans to be aware of when thinking about their small business opportunities.
The topics covered are:
– Basic information about Veteran-owned businesses and opportunities
– Services available to small Veteran-owned businesses
– Small business incentives
– Government procurement methods
– Rules for working with the government
– Federal Business Opportunities
– Industry clusters and SBA certification opportunities
Numerous additional resources are identified to assist you. Visit the resource icon in the course player or locate additional tools, templates, and mentors on SBA.gov once you finish the course.
Let’s get started!
Veteran-Owned Businesses and Opportunities
Veteran-entrepreneurs are an incredibly important dimension in America and in the American economy.
The SBA is working closely with all Federal agencies to increase contract dollars awarded to Veterans, and here are a few reasons why:
– U.S. military Veterans own 2.4 million businesses, or nearly one in 10 of all businesses nationwide.
– 8.3 percent of Veteran business owners have service-connected disabilities.
– Veteran-owned businesses generate $1.2 trillion in receipts and employ nearly 5.8 million people.
– In the private-sector workforce, Veterans are at least 45 percent more likely than those with no active-duty military experience to be self-employed.
– As highly trained professionals and leaders with experience in challenging environments, Veterans find that entrepreneurship and small business ownership are key opportunities for the more than 250,000 of them that transition out of the military into civilian life each year.
– Historically, about one in seven Veterans chooses self-employment as their vocation. This is a significant percentage.
What You Need to Know Upfront
There is no book you can read or course you can take that will give you all of the answers about how to be successful in the government contracting space; this course provides a lot of helpful information, but it is only a starting point. Your success will come from continuous learning and hard work.
However, keep these two simple rules in mind:
1. You don’t know what you don’t know; and
2. There is no substitute for knowledge.
Find a mentor, talk with successful players in the contracting space, and learn what questions to ask, what mistakes to avoid, and what others have done to be successful.
The Federal Buying Market
The U.S. government is the world’s largest buyer of products and services. Purchases by military and civilian installations include everything from complex space vehicles to janitorial services. In short, the government buys just about every category of commodity and service available.
Services for Small Veteran-Owned Businesses
The SBA is committed to helping America’s Veterans.
There are two main services for small Veteran-owned businesses:
One is the Office of Veterans Business Development, and second is Veterans Business Outreach Centers (VBOCs).
The agency’s Office of Veterans Business Development promotes policies and programs that provide management and other assistance to small businesses owned and controlled by Veterans and service-disabled Veterans. The office also acts as an ombudsman – promoting full consideration of Veterans in all government programs.
As an extension of this Washington-based office, the SBA has established Veterans Business Development officers in each of its 68 district offices across the country.
Veterans Business Outreach Centers offer a full menu of business development services that include counseling, training, support applications, and other business assistance tools. These comprehensive services are designed to aid Veteran and service-disabled entrepreneurs, as well as self-employed members of the Reserve and National Guard.
Small Business Incentives
Federal agencies have a statutory obligation to reach out and consider small businesses for procurement opportunities. However, it is up to you to market and match your business products and services to the buying needs of specific government agencies. The goal of 3 percent of government business going to service-disabled Veterans will open some doors – but you must still be able to sell your business on performance, price, and ability.
Federal law requires government agencies to establish small business contracting goals. The goals provide incentives and opportunities for small businesses.
Federal contract goals are established for:
– Service-disabled Veteran-owned businesses – 3%
– Firms located in HUBZones – 3%
– Small disadvantaged businesses – 5%
– Woman-owned businesses – 5%
– Small businesses – 23%
To help Federal agencies achieve the 3 percent government-wide goal for service- disabled Veteran-owned businesses, Congress amended the Small Business Act and established a procurement program for small business concerns which are owned and operated by service-disabled Veterans.
Service-Disabled Veteran-Owned Small Business Program
This program provides contracting officers the authority to award sole source or set-aside contracts to service-disabled Veteran-business owners, if certain conditions are met.
There are two main criteria to meet the conditions: 51 percent and the Contracting Officer’s Role. First, a Service-Disabled Veteran-Owned Small Business concern must be at least 51 percent unconditionally and directly owned and controlled by one or more service-disabled Veterans. Second, the contracting officer for a specific contracting activity determines whether a contract opportunity for such service-disabled Veteran- owned businesses exists.
Later, we will talk about marketing your business to the government. It is important that your status as a Veteran or service-disabled Veteran be highlighted in your System for Award Management (SAM) profile and other materials used to market to specific agencies.
Unique Small Business Veteran Incentive
There are some unique small business Veteran incentives. Public Law 109-461, more commonly known as the Veterans First Law, provides unique authority and goals for the Department of Veterans Affairs. The law provides goals and makes it easier for the VA to buy from Veterans and service-disabled Veterans.
However, certain conditions must be met, and you must register your business online at the vendor information database. Select the link on screen for more information.
How the Government Buys
The government applies standardized procedures to buy products and services it needs from suppliers who meet certain qualifications.
The primary contracting methods used by the government are: Micro-purchases; Simplified Procedures; Sealed Bidding; Contract Negotiations; and Consolidated Purchasing.
Contracting Officers use procedures outlined in the Federal Acquisition Regulation, commonly known as the FAR, to guide government purchases.
You can visit FAR’s website for more information.
Micro-purchases
Government purchases of individual items under $3,000 are usually considered micro- purchases. Such government buys do not require competitive bids or quotes, and agencies can simply pay using a Government Purchase Card or credit card, without the involvement of a procurement officer.
An important point to remember is that micro-purchases, unlike other small government buys under $150,000 are not reserved for small businesses.
Simplified Procedures
When the Federal Acquisition Streamlining Act of 1994 was introduced, it removed many competitive restrictions on government purchases under $100,000. Instead of full and open competition, agencies can use simplified procedures for soliciting and evaluating bids up to $100,000.
Government agencies, however, are still required to advertise all planned purchases over $25,000 in Federal Business Opportunities (FBO), the government’s online listing and database of available procurement opportunities.
Simplified procedures require fewer administrative details, fewer approval levels, and less documentation. The procedures require all Federal purchases above $3,000, but under $150,000, to be reserved for small businesses.
This small business set-aside applies, unless the Contracting Officer cannot obtain offers from two or more small firms who are competitive on price, quality, and delivery.
Sealed Bidding
Sealed bidding is how the government buys competitively when its requirements are very specific, clear, and complete.
An IFB or “Invitation for Bid” is the method used for the sealed bid process. Typically, an IFB includes a description of the product or service to be acquired, instructions for preparing a bid, the conditions for purchase, delivery, payment and other requirements associated with the bid, including a deadline for bid submissions.
Each sealed bid is opened in a public setting by a Government Contracting Officer, at the time designated in the invitation. All bids are read aloud and recorded. A contract is then awarded by the agency to the lowest bidder who is determined to be fully responsive to the needs of the government.
Government-wide IFBs are available daily for review in the government’s online listing service, Federal Business Opportunities. This electronic service, which is discussed in detail later, also provides direct links to available IFB invitations.
Contract Negotiations
Contract negotiations are used in many Federal procurement actions. This is typically a more complicated process for companies wanting to sell to the government. It is also a method that is more time-consuming for the agencies doing the buying. There are typically three contract negotiations.
In certain cases, when the value of a government contract exceeds $100,000 and when it necessitates a highly technical product or service, the government may issue a Request for Proposal (RFP). In a typical RFP, the government will request a product or service it needs, and solicit proposals from prospective contractors on how they intend to carry out that request, and at what price. Proposals in response to an RFP can be subject to negotiation after they have been submitted.
When responding to an RFP, you want to be sure that you have read the entire document and that you understand what is required in the Statement of Work (SOW). In many cases, there are opportunities to learn more information at a meeting or walk-through.
When responding to the RFP, be sure you are being responsive to the requirements identified. Remember that your response must show that you are responsible and responsive, or your bid will not be considered.
When the government is merely checking into the possibility of acquiring a product or service, it may issue a Request for Quotation (RFQ). A response to an RFQ by a prospective contractor is not considered an offer, and consequently, cannot be accepted by the government to form a binding contract.
Government-wide RFPs and RFQs are also available daily for review in the FBO.
Consolidated Purchasing Programs
Most government agencies have common purchasing needs.
Sometimes the government can realize economies of scale by centralizing the purchasing of certain types of products or services. This is called consolidated purchasing and multiple award; and acquisition vehicles are typically used.
The most common multiple award schedules are GSA (General Services Administration) Schedules or Government-Wide Acquisition Contracts (GWACs). These centralized buying vehicles are negotiated by the government with awards to many potential vendors and are used by multiple agencies buying similar goods and services.
The Rules – An Overview
If you want to participate in the Federal procurement arena, you have to know the rules.
Understanding the government’s procurement rules is critical to your success as a government contractor. The Federal Acquisition Regulation (FAR) outlines all of the rules for doing business with the government.
It is a comprehensive guide indexed by topic. Do not be intimidated by its size or apparent complexity. It is an excellent resource tool. The most common FAR sections used by small business are: Federal Supply Schedules, Simplified Acquisitions, Contracting by Negotiation, and Small Business Programs.
The Rules – Size Does Matter
As a small business, certain government programs may apply to you. The question then becomes, what is a small business? Or, more specifically, is your firm a small business?
Over the years the SBA has established and revised numerical definitions for all for- profit industries, and this numerical definition is called a “size standard.” It is almost always stated either as the number of employees or average annual receipts of a business concern.
In addition to establishing eligibility for SBA programs, all Federal agencies must apply the SBA’s size standards for contracts to be awarded to small firms.
Contracting Opportunities for Veteran Entrepreneurs
You need to make it easy for the government to identify your business as well as to identify the products and services you sell. In order to sell to the government you need to do the following:
One, define your business and products using a DUNS and NAICS code.
Government agencies use the North American Industry Classification System, more commonly referred to as a NAICS code, to identify products and services by industry type. You can find the NAICS codes for your products and services by clicking on the referenced hyperlink. It is also important to note that you can use your NAICS code or codes to conduct online searches at the websites of numerous Federal agencies to learn what they are buying. A NAICS code identifies the products and services your company supplies. It does not uniquely identify your business. The Federal Government uses D-U- N-S numbers, provided by Dun & Bradstreet, to identify prospective vendors.
Two, register your firm in the System for Award Management (SAM). The System for Award Management (SAM) is the Official U.S. government system that consolidated the capabilities of CCR/FedReg, ORCA, and EPLS. There is NO fee to register for this site. We have all heard the expression, “You’ve got to play to win.” Well, to succeed in
Government contracting, you have to register to participate. Registering your business in the CCR is a significant and primary step to sell to the Government.
Three, market directly to agencies. Aside from some of the differences we have already talked about, selling to the government is not that much different than selling in the private sector. It all comes down to marketing. Learn what agencies or prime contractors have a need for and clearly demonstrate how you can add value and why they should buy from you. In addition, be active. Participate in procurement-related conferences, activities, and matchmaking events. Use these activities to become known and to be a “player.”
Four, use established procurement vehicles. Earlier in the course, we talked about consolidated purchasing programs. Under such programs, the Federal government tries to benefit from economies of scale and make it easier for vendors to sell to the government by establishing Multiple Award Schedules (MAS). These schedules are often referred to as procurement vehicles. A prominent example of this type of contracting is the General Services Administration (GSA) Schedule. GSA negotiates prices and terms with prospective vendors and enters into an agreement. Under the agreement, participating government agencies can purchase products and services from a schedule of prospective vendors, according to prices and terms already agreed to by the vendors. Another procurement vehicle example is Government-Wide Procurement Contracts or GWACs.
Procurement vehicles can be valuable tools. As you continue your journey into the Government contracting space, learn as much as you can about procurement vehicles and how they could benefit your business.
Federal Business Opportunities (FBO) – An Overview
It is impossible to sell your products or services to the Government if you don’t know which agencies are buying, what they need, and when they need it.
To market or outreach contract opportunities to the public, the Federal Government operates a robust online service called Federal Business Opportunities, but more commonly known as FBO or FedBizOpps. This single-entry, government-wide website profiles available business opportunities and is one of the most powerful tools available to help you become successful in Government contracting. The online tool identifies contract opportunities over $25,000.
At your convenience, take a few minutes to visit the FBO website and familiarize yourself with how it operates, what it displays, and why it’s important.
Hyperlinks to the FBO site are available at multiple locations throughout this course. You can also use the hyperlinks on this site to access the FBO directly, as well as accessing important training information about how to use the FBO.
Federal Business Opportunities (FBO) – Finding Opportunities
The FBO is an excellent tool to find contract opportunities. It has been refined to make it easier for potential contractors to find recovery-based contract opportunities. The FBO created a new dimension within the site specifically to find and review recovery-based contract opportunities.
The FedBizOpps.gov website has a link to search for recovery opportunities, including more information.
An alternative to seeking prime contracts is to explore subcontracting opportunities.
Subcontracting with a prime contractor can be a profitable experience as well as a growth opportunity for a business. If, after assessing the capabilities and capacity of your business, you conclude that you are not ready to bid competitively for prime contracts, consider opportunities available through subcontracting.
To help small businesses find opportunities, the SBA maintains SUB-Net, a searchable database of available subcontracting opportunities.
Although the SBA makes the database available as a small business resource, it is up to prime contractors to update SUB-Net with contract opportunities.
A hyperlink to SUB-Net is provided for your convenience and future use. Significant recovery-based funds are available in the form of government grants.
A Federal grant is an award of financial assistance from a Federal agency to a recipient to carry out a public purpose of support or stimulation authorized by the U.S. government. Federal grants are not Federal assistance or loans to individuals.
Twenty-six Federal agencies offer over 1,000 grant programs annually in various categories.
To learn more about Federal grants, visit their website. You can also find specific grant opportunities as a result of the Recovery Act at the website on screen.
Federal Business Opportunities (FBO) – Prepare for the Future
Things never stay the same. Successful companies plan for the future.
Five years from now the Department of the Navy will still be buying ships and the Veterans Administration (VA) will still be buying laundry, food, and other services for Veterans.
The government will continue to buy new and innovative products and services to protect and improve the lives of American citizens. Areas of future growth will likely include: renewable energy; clean and smart grid technology; life sciences; nanotechnology; broadband services; high-definition education programs; and many others.
Consider future needs as you evolve your company vision.
1.29 Industry Clusters
Many economic development organizations now realize that significant economic success can come from key industry clusters in specific regions.
An industry cluster – such as flexible electronics in Northeast Ohio , life-sciences in San Diego, or shipbuilding in Maine – is a geographic concentration of interconnected businesses, suppliers, service providers, and associated institutions focused on a particular industry or product. Individual companies within the cluster feed on each other and succeed or fail, not just because of their own efforts, but in part because of the overall success of the cluster in the region. This multiplier effect is due to inter-regional networks, robust collaboration, regional government and academic support, and expanded marketing. All of these factors working together draw national attention and customers to a hub of clustered knowledge, innovation, and production.
The SBA is a strong supporter of industry cluster initiatives – a formally organized effort to promote cluster growth and competitiveness through collaborative activities among cluster participants. In 2010, the SBA created a pilot Regional Innovation Cluster Initiative. In 2011, the SBA collaborated with the Departments of Labor and Commerce to launch the Jobs and Innovation Accelerator Challenge (JIAC), the first interagency cluster initiative. In 2012, the SBA and the Departments of Commerce, Labor, and Energy announced the third JIAC and awarded funds to existing clusters focusing on Advanced Manufacturing. In total, the SBA is investing in or supporting over 56 clusters throughout the United States that span a variety of industries, ranging from energy and manufacturing to agriculture and advanced defense technologies.
Through intensive, industry-specific technical assistance, the SBA Cluster Initiatives help small business innovators commercialize promising technologies needed by government and industry buyers in that particular sector. Services such as showcasing, networking, and “demonstration events” help get small businesses and their products in front of investment and other funding sources, research institutions, and customers/buyers in order to bring products to market.
A more in-depth synopsis of the SBA Cluster Initiatives, research reports, and a map of federally funded Cluster Initiatives can be found at their website.
SBA Certification Programs
The SBA administers two certification programs designed to assist specific market groups in the government contracting space. These programs include the HUBZone program and the 8(a) Business Development Program. Learn more about each of these programs by selecting the hyperlinks on screen.
Tipping Point
There is a reason why some people are more successful than others.
The same can be said about small businesses in the government contracting arena. Some firms are clearly more successful. However, the listed tips may put the odds in your favor:
A Business Plan – Prepare a clear business vision and strategy.
SAM – Develop a crisp and informative profile describing your business products and services.
FBO – Become an expert in understanding how to use and find contract opportunities. Research and identify agencies that buy what you sell.
Work with procurement experts to understand how to respond appropriately to government acquisition requests.
Market aggressively to targeted agencies.
Network – attend procurement conferences and matchmaking events and talk with government buyers and experts in the contracting field.
Learn from others. Actively seek the guidance, experience, and wisdom of experts in the contracting field.
Summary
We covered a lot of material in this course. You should now be able to:
– Explain the importance of Veteran-owned businesses to the U.S. economy
– List services available to Veteran-owned businesses
– List small business incentives that Veteran-owned businesses can take advantage of
– List government procurement methods
– Describe the best ways to procure government contracts
– Explain Federal Business Opportunities
– Explain the importance of industry clusters and SBA certification opportunities
Next Steps
Now what should you do? Follow these steps to trying to win a Federal contract:
Step 1: Determine your small business size eligibility and to learn more about size standards.
Step 2: Register with the System for Award Management (SAM).
Step 3: Identify your Federal Supply Group (FSG) or Federal Supply Class (FSC) code.
