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State of the Government Market (according to GovernmentVAR)

Posted By Guy Timberlake, The American Small Business Coalition, LLC, Wednesday, January 24, 2007
Updated: Sunday, June 29, 2008

For the second year, GovernmentVAR has polled VAR's doing business in the public sector (227 this year) and come back with some upbeat (for some), interesting, and even dissapointing results.

The upbeat results have to do with the sentiment expressed by the segment of the VAR sector polled for this survey.

The interesting results have to do with some of the results related to how VAR's locate small business partners.

 The dissapointing aspect of it has to do with the statistics relating to VAR's having difficulty locating small business partners. But more about that in a bit.

Here are some of the results they offered:

  • 46% of Federal VAR's polled said that Woman-owned Small Businesses were the category of subcontractor most difficult for them to locate;
  • 42% said that Service-Disabled Veteran-owned Small Businesses were the most difficult to locate;
  • 29% noted 8(a) Business Development Program participants as hard to find, and;
  • 26% claimed HUBZone companies as the most difficult to locate.

Regarding VARs' biggest challenge in meeting set-aside contract requirements

  • 39% said finding small businesses that fit the requirement.

How VARs locate small business subcontractors to fill federal set-aside requirements

  • 61% cited previous experience working with the set aside (small business)
  • 59% leveraged referrals from the customer agency or another contractor
  • 46% tracked responses to RFPs
  • 40% did it via the federal Central Contractor Registration (CCR) database

The biggest influence on VARs when awarding set-aside contract(s)

  •  37% count on the small business's technical expertise
  • 21% rely on the small business's experience with the agency
  • 20% look at the small business's vendor partner relationships
  • 14% of them make their decision based on the price offered in the bid
  • Only 7% of them are influenced the small business's set aside category

Small businesses should take note of how VAR's currently find potential small business partners.

Now the dissapointing part. With twenty-six million small businesses in the country, it still amazes me that medium and large companies claim not being able to find companies to partner with.

I understand that not all or even most of the twenty-six million are doing business in support of federal requirements.

I understand that not all companies are viable partners.

I understand that it will cost these companies money to work on identifying potential partners.

I also understand that quite a few of these companies could care less about meeting their subcontracting goals, especially since there is really no enforced punishment for them not meeting those goals.

This would be a good time for small business subcontracting goals to be inserted as CLIN's (deliverables) in contracts. This way these companies aren't paid for not delivering. 

There are many resources available to these companies to help them locate partners. (Please pardon the self-promotion...) The American Small Business Coalition provides support for these companies in order to benefit the small business community. We do it for the government at no cost and we do it for medium and large companies for pennies on the dollar. Membership in The ASBC and the support these companies would receive will save them considerably when you take into account the cost of doing business. We can talk more about that later.(Self-promotion done.)

Just as the sophistication of federal contracting has increased over the last decade, so has the sophistication of small businesses. Small and Microbusinesses are more than adequately qualified and capable of performing tasks that were very much reserved for larger companies five and ten years ago.

If the 39% of the 227 companies polled want help in identifying small businesses to potentially team with, give me a call at 410-381-7378 or email me at GovernmentVAR@theasbc.org. Seriously, we'll get you integrated into the membership program and try to make your life significantly easier. No kidding.

-Guy Timberlake

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