My answer to What should be the government’s role in how small businesses are run?
Answer by Ken Larson:
The SBA is a solid tool for small business in the U.S.
However, my principal experience in government contracting over the last 3 decades tells me the government has a long way to go in facilitating small business at the buying agencies (over 100 of them).
As the SBA has recently indicated, the federal buying agencies have just recently met their small business contracting goals, even though the goals have been around for years as public law.
Within the agencies themselves and the large corporations the sell to them there is much that needs to be done to facilitate the advancement of small business.
1. The challenges and difficulties for the small business in government contracting are not so much in the areas of barriers as they are in lack knowledge (which I concede is a form of barrier but one that can be dealt with)
2. Large business and government agencies take advantage of the small enterprise lack of knowledge or make poor assumptions regarding what a small business knows about The Federal Acquisition Regulation (FAR) and its associated Cost Accounting Standards (CAS). This leads directly to abusive practices.
3. A prime example of an abusive practice is large corporations signing teaming agreements during proposal efforts and then not awarding subcontracts to the small enterprise as agreed, keeping the majority of work for themselves.
4. Agencies take forever these days to put in place actual prime contracts after source selections and award to a small business. They do not realize that a small enterprise does not have deep pockets and must have cash flow to sustain a new program with new employees.
5. Funding levels on IDIQ and Omnibus programs are insufficiently committed and the small enterprise is not adequately informed about limitation of funds and funding exposure. (See second link below for more on this vital matter)
6. I have seen enough small businesses succeed in the government contracting field that I am convinced that the government needs more active roles in education of the small enterprise and more trained contacting officers that understand the limitations of a small business.
7. The most common traumatic situation I encounter is with newly established businesses who have won their first government contract and have no CAS compliant job cost accounting system in place to bill it out. The government has assumed that capability will materialize and when it does not they audit the bills, find no backup and shut down the cash flow until the system is fixed. At that point the business can fail. The company should have been educated much earlier in the process about these requirements.
8. The number of poorly performing System Engineering and Technical Assistance (SETA) contractors in roles not suited to them in contract administration support is increasing in federal agencies. These firms need to be vetted and better managed for the omissions and commissions the contribute in to 1-7 above.
9. Not every small enterprise can get into a class on government contracting at George Washington University, The Defense Acquisition University or send their personnel to lengthy and cost seminars conducted by organizations like the National Contract Management Association. These are all great education sources but do not come close to filling the complete requirement and cost time and money.
10. The contracting officer and his staff need to be upgraded in the skills necessary to guide – not abuse – the small business.