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The FY2014 'No-Show' Penalty for Small Federal Contractors is...

Posted By Guy Timberlake, The American Small Business Coalition, LLC, Friday, October 03, 2014

The FY2014 'No-Show' Penalty for Small Federal Contractors is...

Only $4 billion dollars, so far.

What am I talking about and why the caveat?

Sixty federal agencies, boards and commissions purchased a variety of goods and services during FY14 using the Simplified Acquisition Procedures. Most of the dollars were awarded to small businesses and a majority of the dollars were competitively awarded. But nearly four billion of it ($3.9B to be more precise) was awarded to 'other than small businesses' by competitive procedures. The 'so far' part of this refers to the fact spending by DoD is not visible to the public for ninety days in the Federal Procurement Data System, so we won't know the final tally until New Year's Eve. But the overall spend and the 'penalty' will be increasing.

The reason this matters to me and should matter to small federal contractors is because buys made using the Simplified Acquisition Procedures should be considered low-hanging fruit due to the inherent preference for agencies to do business with small business concerns this way, the streamlined processes that reduce administration for Government and Industry and the 'Rule of Two' which guides agencies to set-aside these buys (under the threshold of $150K) for small businesses when buyers determine they expect to receive at least two responses from small businesses that are viable in terms of price, quality and delivery. 

Here's a break-down of the dollars I feel small business left on the table for large companies to scoop up:

  • Nearly $2.5B of the dollars awarded to large companies were issued to standalone contracts. This means no GSA Schedule, BPA or GWAC was used to make the award, creating an opportunity for small businesses to pursue this work without the up-front investment of securing an established contract vehicle.

  • Based on the NAICS Codes used, what they purchased from large companies (using 954 different NAICS Codes) was eerily similar to what was purchased from small businesses via set-asides, sole source and full and open competition. The top twenty NAICS Codes by obligations account for a little over $1.7B.

  • When you look at the organizations doing the buying, a side-by-side comparison of the organizations buying similar goods and services from small businesses, there is literally no difference.

What's my point?

Another four billion dollars in the coffers of America's small businesses would go a lot further in creating jobs and positive impact on communities around the Nation. But in order to take advantage of the perks associated with agencies procuring this way, SMALL BUSINESSES HAVE TO BE VISIBLE AND VIABLE! In a nutshell, agencies can't buy from you if they can't see you. The information you need to understand who these organizations are (down to the individual contracting office and buyer) and how to establish a meaningful dialogue with them is literally at your fingertips.

Would you like to know more? Click here to call me or email me at You can always view my other articles by clicking here.


The Chief Visionary

"The person who says it cannot be done should not interrupt the person doing it."

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