Exploring the numerous ways U.S. federal agencies may engage with small businesses.
At the time of this writing, small businesses across the nation are significantly impacted by the COVID-19 pandemic—which makes small business advocacy in federal contracting more important now than ever before.
Working together, small business advocates, contracting professionals, and program managers must creatively and proactively engage with the small business community to help better understand the changing world around us and show a path forward to improved federal policies and outcomes for all Americans.
Ensuring Small Businesses’ Visibility Among Federal Agencies
Governmentwide public policies mandate maximizing opportunities for competition and participation in acquisitions by small business concerns. The federal government is assessed annually on how well federal agencies reach their small business and socioeconomic prime contracting and subcontracting goals.
Congress established in 2006 a governmentwide goal of awarding 23% of federal contracting dollars to small, minority, and disadvantaged businesses. Additionally, Congress required governmentwide goals for the individual set-aside categories of small businesses:
- Service-disabled veteran–owned small businesses (SDVOSBs)—3%,
- Women-owned small businesses (WOSBs)—5%,
- Small disadvantaged businesses—5%, and
- Historically Underutilized Business Zone (HUBZone) small businesses—3%.
In fiscal year 2018, small businesses accounted for over $120 billion in federal prime contracts, and the federal government thus exceeded its small business contracting goal for the sixth consecutive year.
Each federal agency coordinates with the Small Business Administration (SBA) annually in establishing its small business goals and is responsible for achieving them, thereby, contributing towards meeting the Federal government-wide small business procurement goals. SBA administers the small business goaling program tracking and reporting on agencies' achievements toward meeting those goals. Raising the profile of small businesses among federal agencies, Congress amended the Small Business Act[i] in 1978 which required each federal agency with procurement powers to establish an Office of Small and Disadvantaged Business Utilization (OSDBU), which would be responsible for advocating for small businesses in contracting policies and procedures.
As an OSDBU director for a cabinet-level federal department, I work closely with my staff to constantly refine our approaches to vendor outreach and hone our skills as advocates, partners, and influencers. Having reached out to some of the top federal agencies and small businesses and observed leaders in action, I learned from them about new ways for agencies to engage with small businesses.
Alternative Ways to Engage with Small Businesses
One small business executive I spoke with, who had previously served as a contracting officer for a federal agency, encouraged federal government buyers to knock down the “cone of silence.” Often, acquisition officials and program managers refrain from talking to companies fearing jeopardizing a procurement and risking a bid protest, and the vendor is frustrated with the lack of responsiveness from the agency.
Here’s a myth buster: The Federal Acquisition Regulation (FAR) encourages early exchange with industry, as long as it is consistent with procurement integrity:
Exchanges of information among all interested parties, from the earliest identification of a requirement through receipt of proposals, are encouraged. Any exchange of information must be consistent with procurement integrity requirements….[ii]
Taking a different approach, some agencies actively seek small business partners by convening vendor outreach and industry days where hundreds of businesses queue up to meet with program and procurement managers. In the current pandemic environment, we need to rethink in-person outreach and creatively explore technology for virtual solutions.
With social distancing practices in place, it is more important than ever to keep information current about federal contracting opportunities. OSDBUs publish the Forecasts of Contracting Opportunities annually[iii] in the beginning of each federal fiscal year. Title V of Public Law 100-656 requires that federal agencies compile and make available projections of contracting opportunities to the SBA and to interested business owners. Although all federal agencies release Forecasts, some agencies update theirs more periodically (e.g., the Department of Housing and Urban Development updates its Forecast on a monthly basis). This practice ensures that the Forecasts remain accurate throughout the year as priorities, budgets, and contract statuses change. The Forecasts are one of several tools that help the small business community effectively market goods and services to the cognizant components within the relevant departments. In so doing, the Forecasts help to realize the goal of federal procurement policy.
Knowing What to Buy, but Not How to Buy It
When meeting with federal partners, small businesses have their capabilities statements at the ready. However, these documents can only tell you so much.
As one contracting professional I spoke with remarked, small businesses are often motivated and open to learning about the customer’s challenges and willing to recommend buying strategies that the federal buyer had not considered. One way for a more robust information exchange is through “requests for information” (RFIs).
A retired fed and currently a small business executive commented that when he was in government, he often was clear on the outcome that he wanted to achieve but did not know how to get there through the contracting process. Through the RFI process and responses from industry, he was able to more effectively identify and define considerations for acquisition planning—including project scope, evaluation criteria, timeline sensitivities, and other factors.
Ensuring Inclusion and Supplier Diversity
Federal agencies are also responsible for meeting statutorily mandated socioeconomic goals for SDVOSBs, WOSBs, small disadvantaged small businesses, and HUBZone small businesses. One federal contracting officer walked me through her process for conducting market research. During the early stages of acquisition planning, she and her team would review the agency goals and status of achievement. Special consideration would be given to socioeconomic goals, where her agency’s results were lagging. The team then embarked on keyword searches using the Dynamic Small Business Search engine, which includes identifying socioeconomic categories.
Publishing sources sought and RFIs are also very important in soliciting information about available sources. To help in goal achievement, several agencies convene vendor outreach events by socioeconomic category and agency OSDBU directors and contracting officers often speak at trade association conferences to increase outreach to specific certification holders.
Acknowledging Quality Performance by Small Businesses
Performance matters. Federal agencies are always looking for small businesses who excel in their areas of expertise to help meet their missions and business needs and create jobs. How businesses perform is the true measure of success. There are many outstanding success stories out there of small businesses adding value and advancing agency missions.
Opportunities to capture success abound. While agencies have been sharing the contributions of small businesses through videos, spotlights, and business roundtables, more can be done.
Importance of Small Businesses to the National Economy
Small businesses drive job creation and provide economic stimulus. Federal contracting with small businesses helps to grow the local economy but also that of the nation. There are over 30 million small businesses in the United States, employing over half the nation’s workforce. As one contractor expert put it:
Small businesses are the backbone of America’s workforce. They are the source of many new ideas and they provide jobs and opportunities for anyone who dares to dream. We must continue to support small businesses and ensure they have a seat at the table along with the large businesses.
Jean Lin Pao
- Director, Office of Small and Disadvantaged Business Utilization, U.S. Department of Housing and Urban Development.
- Excellence in Government Senior Fellow.
- Certified executive and leadership coach.
Member, NCMA Tysons Chapter.