By: Theodore P. Watson, Esq

As the economy weakens, many commercial businesses are revisiting business initiatives to generate more revenues. Some companies have thought about doing business with the federal government but browse pass up the idea simply because they have no government contract training, have heard horror stories about federal contracts, or some other reason.

The truth is that the government awarded more and more contracts during late ’08 and early ’09. The businesses that were already performing federal procurement contracts are now seeking ways to improve and strengthen their position in the federal market place. This should be a clear indicator that revenues and government markets are alive and well.

Service Disabled Veteran Owned Small Business Contracts

New federal contractors are well aware the forecasted awards for service-disabled veterans are on the rise.  In fact, many veterans are now incorporating small business to take advantage of the new focus on veteran companies. However, one must be very careful. Although there are increased serviced disabled veteran-owned businesses, a vast majority is awarded to veterans with in-place teaming arrangements and joint ventures. This can be problematic in that larger businesses are purposely seeking out disabled veteran business for the purpose of generating revenues from the newly focused small businesses. This practice is heavily scrutinized due to the possibility of control.

This type of arrangement is fertile ground for SBA size protests under the affiliations rules. Simply having a teaming or joint venture agreement in place will not suffice. Government contractors, especially the prime, must know what challenges they fact. Seeking out a well-rounded government contracts lawyer that understands the small business programs and FAR rules is key to your success.

What is The Overall Benefit of Doing Business With the Federal Government in 2010?

As mentioned above, the economy is questionable currently. Congress and budget funds for planned federal projects. Considering federal contracts creates a balance between commercial competition and establishing a steadier stream, of revenue for your business.

There is no dispute that the federal government purchases substantial amounts of services and supplies from the commercial marketplace.

Don’t Small Businesses Have To Compete Among the Larger Businesses?

The politically correct answer is generally NO. However, developing strategies that include a large business with a vast amount of past performance can be the way to go, if you don’t have much past performance in the industry.

Arguably, the federal government takes a firmer stance for small business government contract award, than most state agencies.  Our government contract consultants typically advise new clients to seriously consider going after federal contracts before state contracts. The rationale behind this thought is twofold. First, the federal government has more capital to budget for government contracts; second, to be qualified to business with the government is substantially easier than state agencies. For example, state agencies typically require application fees and a tall order of paperwork.

On the other hand, the federal government simply requires you to register on CCR and ORCA.

What are Chances of Landing a Government Contract?

Our government contract attorneys and consultants get this question almost every day. The answer is quite simple. If you are seriously considering going after large dollar contracts, it should be part of you business plan to budget for consulting services from firms that thoroughly understand the federal procurement process.

More specifically, looking for qualified teaming partners, knowing how to respond to Requests for Proposals are key aspects of increasing the probability of a federal contract award. You simply cannot market to the federal government in the same fashion as you do in the commercial sector. You must know how “to play the game” when doing business with the federal government. Nevertheless, federal contracting  is a very lucrative business.

Are You Limited To Performing Federal Government Contracts in Your State?

There is a huge debate among government contracting agencies on this topic. The politically correct answer is generally NO. Federal contracting is a federal program and not state. The facts show that government contractors from one state have been awarded government projects in totally new states.

Prudent government contract lawyers should look at the constitutionality of favoring in state companies versus out of state contractors with no compelling reason.

Many government agencies and SBA offices create policy that you can only apply for work within your particular state. This has yet to be seriously challenged. Other government RFP’s will state that bidders must posses a certain state license to bid on the particular federal contract. These strategies at some point will be challenged successfully.

While it is true that small businesses must use the SBA Office in their specific region, this is a far cry from saying that you must only look at contracts within that specific state.  If this were the intent of congress, then using substance over form, the Small Business Act would be geared at generating state revenues and not federal revenues to congress (i.e. federal taxes).

Is The 8a Program Going Away?

This is another highly debated subject. There has been one court decision that challenged the constitutionality of the SBA 8(a) program. This has created a floodgate of terror among small businesses nationwide.

The question that most legal scholars must ask is who is the challenger to the 8a program really challenging? The logical answer would be Congress since the C.F.Rs that govern the 8a program are federal statutes. The next question should be if there is a challenge against a federal statute, is the appropriate forum a lower district court OR the U.S. Supreme Court? This analysis has yet to hit the headlines.

It would appear that since has the authority to create laws for the general welfare of the public, that there can is and can be enough justification to show that the 8a program does not violate the constitution because there can be ample statistical evidence to show that small business close their doors with in nine years of opening. Since congress acquires substantial amount of revenues (taxes) from small businesses, it would appear prudent that economically and socially disadvantaged businesses (a qualification for 8a status) should be justified in getting preferential treatment in government contracts.

If the SBA 8a programis in essence unconstitutional, so too must the HUBZone business program, Service Disabled Veteran Small Business Programs etc.

Interested government contractors should read the U.S. Supreme Court’s opinion in Adarand v. Pena to get a better idea of what is going on. The heart of the decision was that congress must generate evidence to support the programs they institute.

If nothing else in the current economy, it is hard to argue that small business receive less business loans and are welcomed into the commercial market place as the larger companies. These factors go into the analysis for ‘social and economically disadvantaged.’

Is the 8a Program Only For Minorities?

There is no concrete rule that states you only can be a minority to claim 8a status. There is only a presumption that can be rebutted. For example if a minority applicant does not met the ‘net worth’ requirement for the 8a program, he simply cannot acquire the status.

Can a Caucasian contractor acquire the 8a status? The arguable answer would be yes, if he or she can provide evidence to the 8a guidelines.

What Can Business Do to Acquire Government Contract Training?

There are plenty of sources to acquire government contracts training. Depending on your budget, you can retain qualified consultants that truly understand the federal procurement system. Acquire training from a person or company that can advise you on your specific business and not just give general theories.

What Does the Government Contract For?

The government purchases just about anything sold in the commercial market. Most types of products and services are procured. A diligent government contract consultant would know how to do his or her homework to provide you with solid data on whether the government has bought, or intends to buy your product or services. It is only at this juncture that you should make a business decision to venture into government contracts.

Businesses in every state can consider doing business with the federal government including Colorado, Wyoming, New Mexico, Kansas and Nebraska, New York, Los Angeles, San Francisco, Chicago, Illinois, Michigan, Pennsylvania, Virginia, North Carolina, South Carolina, Arkansas, Denver, Colorado Springs, Utah, California, Oklahoma, Ohio, Maine, Florida, Texas, Nevada, Las Vegas, Georgia, Hawaii, Alaska, Washington D.C., West Virginia, Florida, Indiana, Washington, Mississippi, Tennessee, Miami, Virgin Islands, Rhode Island, Vermont, Wisconsin, Minnesota, Washington State, Missouri, Virgina, Delaware, Connecticut, Arizona, New Hampshire, Massachusetts, Montana.

For more information or questions about government contracts, contact us online or call Watson & Associates, LLC at 720.741.7200