Why Big Corporations Need Small Business
Corrections or additions?
These articles by Melinda Sherwood were published in U.S. 1
Newspaper on September 29, 1999. All rights reserved.
Government Contracts: Now Better Deals
Small businesses tend to shy away from doing business
with the federal government because it has always been a tedious,
overburdened process, bogged down by the kind of over-specifications
that produce a $96 hammer. Today, however, big brother is a more
agreeable
business partner, even for small businesses, says Madeline Britman
of the New Jersey Small Business Development Center (973-353-5950).
“The Army and Navy used to have specifications for chocolate chip
cookies, they had a recipes, but now they can buy them from
anyone,”
says Britman. “They can buy hammers and screwdrivers from a
hardware
company. Now if it will do the job, they will accept a commercial
product, and the government buys just about anything, from food and
clothing, to nuts and bolts.”
Britman will participate in “Marketing Your Business for Contract
Opportunities,” one of the workshops that are being offered during
Trenton Small Business Week `99. Five days of free seminars and
networking
events kick off on Monday, October 4, at the Fleet Bank networking
breakfast at Maxine’s Restaurant at 8 a.m. Britman speaks at 1 p.m.
at the Mary G. Roebling Building at 20 West State Street in Trenton.
Other speakers: Patrick J. Guidotti, manager of New Jersey
Commerce’s
Office of Small Business, and Susan Hogan, a supplier development
manager at PSE&G. Call 609-984-3408.
Britman has worked at the Small Business Development Center for nine
years and holds a BS in chemistry from Douglas College, Class of 1960,
and a masters in industrial relations from Rutgers University. As
director of procurement programs, Britman helps state businesses
“find
out if they are ready to sell to the government and try to get them
through the beginning steps with the state or the federal
government,”
she says.
A certain amount of contracts are set aside by both state and federal
government for “small business,” defined differently at each
government level. In New Jersey, says Britman, a small business
employs
fewer than 100 employees and annual revenue is not taken into account.
The federal government considers much larger businesses to be small
businesses, but it depends on the industry. “Manufacturing can
be up to 1,000 employees,” says Britman.
New technology and new laws have made it easier to learn about
government
contracts, make a bid, and get paid. First, says Britman, the
government
is making a conscious effort to do better business by looking beyond
the bottom line. “Price used to be the most important thing,”
she says. “Now they are looking for best value, which means they
will take other things into account.” A business’ past
performance,
including delivery history, product quality, and technical capability,
are all weighed carefully.
That might suggest a longer review period, but in fact, the Internet
has sped up the process considerably, says Britman. “Now that
electronic commerce is the thrust, the time has grown much
shorter,”
she says. “Routine items might only appear electronically for
three or four days, and within a week a decision could get made. It
used to be advertised for months.” In addition, businesses are
no longer prohibited from using commercial tools, video for example,
to vie for contracts.
The government has sped up the payment process as well, says Britman.
“The government has prompt payment acts, so you know you’re going
to get paid on time,” she says. Payment is mandatory within 30
days (federal) or 60 days (state) upon receipt of an invoice, and
the government is now issuing payment electronically. “Progress
payments” can also be arranged for larger projects that involve
ongoing labor costs.
For the small business interested in finding opportunities to sell
to government, Britman suggests the following:
Obtain a procurement history from the government agencyin question, guarantied under the Freedom of Information Act (federal)or Right-to-Know Act (state). Businesses can then see the figuresthat won on a prior bid and create a strategy accordingly. “It’spublic information so you contact the agency and figure out who wonthe contract last year and at what price,” says Britman.Limit business with government at first. “I usuallysuggest a new company try to limit the amount of business with thegovernment to see if it’s going to pay off for them,” she says.”When you’re dealing with private industry they’ll continue withyou if they’re happy with you. But the government has to move aroundand give others opportunities. I know businesses that have been doingcomputer repair or support at one army base for 10 years, but theystill have to compete.”Build relationships with contacts even though competitionwins the contract. It’s still an important factor, says Britman.”Youcan develop relationships with the people who are using your product,if you are tenacious enough and decisive enough to know the peoplewho are making the real decisions,” she says. “In federalgovernment there are small business specialists in just about everygovernment agency and they would be a person to help the smallbusinessperson through the maze.”Have electronic banking capacity. “The federalgovernmentdoesn’t like to write checks anymore so you should have a bank accountthat will take electronics funds transfer,” says Britman.Rely on the Internet to find opportunities in governmentprocurement. “If a contract opportunity is advertisedelectronically,it will not be advertised somewhere else,” says Britman. Amongthe most useful sites, says Britman: the U.S. Small BusinessAdministrationwebsite https://www.sba.gov , where government agencies searchfor businesses that are registered; the University of ScrantonElectronicResource Center https://www.ecrc.uofs.edu, a site commissionedby the government for recruiting purposes that has nitty grittydetailssuch as industrial codes that you will need to file bids; andhttps://DoDBUSOPPS.com,where all the government agencies are listed.The New Jersey Small Business Development Center also offersconsultingservices for free.Get certified as a women or minority-owned business ifyou qualify: at least 51 percent of the company must be owned andmanaged by either a woman or a minority. These businesses are eligiblefor even more contracts.Ask for an abstract if you lose the bid so you can figureout where you stand in the bidding process. “You can find outwhether you’re being competitive enough, can you go lower, or maybethe government isn’t the right place for you,” says Britman.Whatever you do, don’t go in blind, says Britman. “Youshoulddo a lot of preparation and understand how the government works.”And it’s getting easier to understand.Top Of PageWhy Big Corporations Need Small BusinessBig business is doing its duty in fostering diversityin the marketplace by putting women and minority-owned businesseson their list of “most-wanted” companies for procurement.To that end, many of the largest corporations have built diversitydevelopment programs, says Herbert K. Ames, Mercer County’sdirector of economic development. “I saw a list from UPS thatwas a whole page’s worth of goods and services that they purchaseand look for small, minority-owned and women-owned businesses toprovide,”he says. “Staples is another one that has a good diversityprogram,Bristol-Myers Squibb has an excellent program.”Ames will introduce several small businesses to representatives fromthe area’s largest companies, including UPS, Merrill Lynch,Bristol-MyersSquibb, Staples, and PSEG. The program, sponsored by the Mercer CountySmall Business Forum, is “Corporate Contacts for Procurement,”and it is set for Friday, October 8, at 8 a.m. at the Sovereign BankArena on South Broad Street. The event is free, part of Trenton SmallBusiness Week `99. Other attendees include Robert Prunetti,Mercer County executive, William Mate, outgoing head of theMercer Chamber, and corporate participants from AT&T, NY/NJ MinorityPurchasing Council, McGraw Hill, NJ Transit, Johnson & Johnson, Merck& Company, NMSCD of PA-NJ-DE, and Revlon.Ames hopes to get companies in Mercer County to do more business witheach other. “When we had our last Small Business Forum meetingI had people from major companies come up to us and say that we wantto get in with these businesses,” he says. “Through some verylong meetings with some diversity development directors we found outthat they really didn’t have many Mercer County businesses on theirbidders list. We want to change that. The small businesses need toknow that the large business is looking for them, and the largebusinessneeds to know that the small business is out there.”Ames estimates that the larger corporations have set aside between$100 million and $300 million for diversity program spending.”Afterthis meeting on the 8th, businesses will have a corporate contactin certain large companies that they can call to seek outinformation,”he says.If you haven’t received certification as a small or minority-ownedbusiness, now is the time to contact the SBA. “I think that thecorporations will request that these businesses be certified,”says Ames, “but that’s up to each individual corporation.”Top Of PageContracts AvailableThe Middlesex County Department of Human Services isseeking vendors to provide personal assistance services toself-directingadults with physical disabilities who reside in Middlesex County.The services provided include direct personal care, but the departmentis also looking for transportation vendors and social workers. Thedeadline for Request for Proposals is Friday, October 15. Call732-745-2587.Top Of PageNow, Desktop VideoJust as desktop programs bring publishing to the massesso too new video editing software is making it possible to producecorporate video, DVD, and CD-ROM on a basic PC. Instead of spendinga million or half a million dollars at a major studio or productionhouse, a business need only spend a couple thousand dollars for acomparable product at one of the new multimedia start-ups, says BrianMcKernan, editor-in-chief of Videography magazine. “Assumingthey have creative talent, they can do the same level work that peopledid with $1 million three years ago,” says McKernan, who speakson “The Changing State of Business Media” at the Moving ImagesProfessionals meeting on Thursday, September 30, at 6:30 p.m. at GoodTime Charlie’s in Kingston. Cost: $10. Call 609-394-4818.Some of these small homegrown multimedia shops can buy gear for$50,000that cost $5 million just a few years ago, says McKernan. “It’sa consequence of the computer revolution and it’s a big business,even in Hollywood,” he says. “A great deal of this work isbeing done out of boutiques, in some cases in people’s homes.”Bronx-born McKernan received a BA from the State University of NewYork in Oswego, Class of 1976, where he was introduced to the mediabusiness via a primitive cable network owned by the school. “Itgave us a chance to cut our teeth on the new technology,” herecalls.He moved to radio, as an announcer near Syracuse, but returned toNew York City city following “the worst winter in 100 years.”He worked for Omni magazine and Broadcast Management Engineeringmagazinebefore joining Videography, one of the oldest and most respectedmagazinesin the industry.Now McKernan faces issues that would daunt the editor of anytechnologymagazine. “Our most important challenge is to provide for ourreaders the most profitable information for now to be successfullater,”he says. “How do people cash in on the Internet, or DVD? How dowe transition from analog to digital? How does everyone manage thechange to HDTV?”The media explosion of the last decade has made it possible to imaginea situation in the near future in which television — as we knowit — no longer has a monopoly, says McKernan. “You havegenerationraised on television now raising a generation on Internet,” saysMcKernan. “The Internet’s streaming video may be compelling enoughto take viewers away from broadcast television.”As the technology matures and the media proliferates, businesses canexpect to have numerous inexpensive options. “A client may askyou on Monday to do a linear video tape, and on Tuesday they wantDVD, which is interactive, and on Wednesday they want streaming videofor the Internet,” says McKernan. And all for less than what abusiness might have spent on a simple video.McKernan’s advice to businesses seeking out production house forvideo,CD-ROM, Internet, or DVDs:Don’t spend the big bucks. Shop around for a boutiqueproduction house.Look for those who can tell a good story. “Wheneveryonehas access to the equipment, the equalizing factor becomes thetalent,”says McKernan. “There are certain constants that don’t change.You have to have story to tell, you have to have a beginning middleand an end. As the motion picture industry proves, you can have thegreatest movie in the world, but if you don’t have a story, theproductisn’t there.”Next StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
