In order to thrive, if not just survive, in today’s economy, small business owners have to look at every opportunity available to them, including doing business with government.
“I’ve seen a lot of companies looking at the government as a potential customer when in the past they’ve only ventured into the commercial,” said Sandra DiCosola, owner of Summit Contract Management, a company that helps small businesses with their contracts and with government procurement.
DiCosola said there are many small business owners who are skeptical of working with government.
“There are a lot of misconceptions about dealing with the government such as you won’t get a fair price for your services or that the paperwork is too difficult,” she said. “It is a lot of work, I won’t kid you, but it is worth it. The government often times pays better for goods and services than the commercial sector does and with the Prompt Payment act you are paid within 30 days or you will receive interest for the time beyond 30 days.”
Tackling government procurement may still sound overwhelming but DiCosola and the Microbusiness Advancement Center are here to help with that.
In a partnership with the Tucson Hispanic Chamber of Commerce, the center is holding workshops on small or microbusinesses capturing their share of government procurement dollars and DiCosola is the instructor. The next workshop is June 2.
“So far we’ve done two rounds of successful workshops,” DiCosola said. “They come for two hours, and by the time they leave, they are registered to do business with the City of Tucson.”
DiCosola said it is more important than that because the certification the businesses receive is honored with the cities of Tucson and Phoenix and the Arizona Department of Transportation. But she said federal government has a place in its central contractor registration to enter the certification and it is recognized.
According to Ellen Hull, the outreach coordinator for the Microbusiness Advancement Center, one business owner has already received their first government contract.
There are several programs to be qualified under with the City of Tucson: the Disadvantaged Business Enterprise (DBE), the Minority or Women-owned Business Enterprise (MWBE) and the newer Small Business Enterprise (SBE).
Certain requirements are across the board that the business must be owned by a U.S. citizen. The individuals must have a net worth of less than $750,000 (excluding resident and business value). The business must meet the Small Business Administration size standard and must not exceed $17.42 million in gross receipts. And the firm must be organized as a for-profit business.
The MWBE and the DBE must be 51 percent owned by a minority or woman (MWBE) or any person who can show a history of disadvantage in governmental procurement (DBE).
Jerone Davis, the training manager at the Microbusiness Advancement Center, cautions small business owners to make sure working with the government will fit within their business model before running in and bidding on jobs.
“There are a lot of requirements the government has when you are a vendor,” Davis said. “They may require you to be licensed and bonded, there could be background checks on your employees before you are allowed to work with them and business owners need to understand what this means to their business.”
Davis said a lot of it all comes back to solid business planning and a complete knowledge of the projects you are bidding on.
“We have one client who is a ‘green’ cleaners,” Davis said. “He bid on some contracts got them and then found that he needed equipment he didn’t have yet to complete these contracts. It’s really the last thing you want to do is be awarded a contract then find you can’t fulfill it.”
Staying true to a company’s business plan and keeping a sharp eye on the cashflow will help small business owners in dealing with the government according to Davis.
“You can’t let the excitement of working with the government cause you to lose sight of your existing business model,” he said. “You have think honestly, what does doing business with the government do to your cash flow of your business. Some government entities may not pay you for 90 days, can your business handle the expense of doing the job and still be alright waiting for the payment?”
For business owners who don’t think they offer any goods or services government would be interested in, they might be surprised, according to Mark Neihart, director of the Department of Procurement for the City of Tucson.
“If you look at a business such as Raytheon for example,” Neihart said. “They are fairly diversified but they still do what they do and buy machine parts, screws etc. In the City of Tucson, we have a water department, a transit system, a zoo, low income housing and a parks system. It’s just such a diverse corporation with a $1.3 billion annual budget.”
Depending on the better or worse years, Neihart said the city spends somewhere from $200 million to $300 million for goods and services.
“It ranges from crickets for food in the zoo to helicopters for our police force and everything in between,” Neihart said.
Neihart said business owners can also go to the City’s procurement website, www.tucsonprocurement.com, and register as a vendor with the city, look at procurement opportunities and get more information about the process.
“They can identify what specific goods and services they can sell to the City,” Neihart said. “When the City is in the market for them the business owner will be notified about the procurement opportunity.”
The department is also finalizing details of the SBE program that was approved by Mayor and Council Feb. 10. Through the program the city will be offering preferential treatment of small businesses located within Pima County for procurement opportunities.
DiCosola gave two tips to businesses once they are registered: marketing themselves and making a routine of reading the solicitations.
“Make it part of your routine, probably, every two weeks, to check their websites for potential opportunities,” she said. “And marketing is the part they don’t realize, just like with commercial industry they need to market themselves or the governments won’t know how to find them.”
For more information about the Microbusiness Advancement Center and their next workshops visit www.mac-sa.org.
Contact reporter Joe Pangburn at email@example.com or (520) 295-4259.