The Small Business Set Aside Program Awards Government Contracts for Small Businesses!
Win Government Contracts for Small Businesses!
Level the Playing Field to Win Government Contracts with the Small Business Set Aside Program
Startups, in nearly every market, struggle to complete against entrenched competitors.
The Federal Government Small Business Set Aside Program eliminates much of this concern with government contracting. This program directly or indirectly awards a goal of 23% of Federal Government procurements as government contracts for small businesses.
Advantages that Come With the Small Business Set Aside Program
Let’s compare the advantages of the Small Business Set Aside Program to win government contracts for small businesses over industries. Here’s an example.
Let’s open a nice burger joint and tap into the massive fast food market. Unfortunately, we’re near a McDonald’s and must compete head-to-head with a global icon with decades of branding and customer loyalty. Now let’s assume that the restaurant industry mirrored the Federal Government’s Small Business Set Aside Program.
In addition to the folks who would wander into our restaurant on their own, Ronald McDonald would be standing under the Golden Arches, diverting a fourth of McDonald’s customers to our restaurant!
But, it gets even better.
When tourist buses arrive, McDonalds is required to sub-contract preparing around 25%-35% of their Big Macs and fries to us. We get to make food under the McDonald’s logo and profit on their take-in revenue during large surges of business! Can you see how the Federal Government’s Small Business Program is a definite game changer?
Women-, Veteran- and Minority-Owned Small Business Opportunities
As a small business, you may also apply for a specific set aside type, such as a Woman-owned Small Business, Veteran-owned Small Business, Minority-owned Small Business in the 8(a) Program or as a Historically Underutilized Business Zone (HUBzone) Business. To further improve a startup’s probability of success, the Federal Government also designates certain contracts to be awarded to these specific set aside types.
GCA teaches how to fully leverage this Small Business Set Aside Program to win earmarked government contracts for small businesses.
Using a Set Aside Status to Win Government Contracts for Small Businesses
Certifying as a specific “set aside” type is one of the easiest and fastest ways to differentiate your company for small business contracts.
Although the overall small business utilization goal is 23%, the government further breaks this goal down by set aside type. In addition, they set a minimum contracting goal of 3% to 5% for each type. The government allows only only designated set aside types to bid on certain opportunities. As a result, this tremendously reduces the number of bidders.
Let’s start with the golden goose, the 8(a) Program. It’s the “golden goose” because contracting officers can actually GIVE contracts to 8(a) companies without competition. And, they frequently do!
Although there are other requirements and caveats to be approved for this program, one of the following must own the company:
- African American
- Hispanic American
- Native American
- Alaska Native Corporation
- Indian Tribe
- Native Hawaiian Organizations and Community Development Corporations
- Asian Pacific American
- Subcontinent Asian American
Woman-Owned Small Business (WOSB)
Being a woman, guarantees your company to be certified as a Woman-Owned Small Business (WOSB).
Two X chromosomes guarantees WOSB certification. However, Economically Disadvantaged Woman-Owned Small Business (EDWOSB) designates a more selective set aside. The term “economically disadvantaged” is a “loose” term. This simply means that the owner has an adjusted gross annual income below $350,000, a personal net worth below $750,000 and personal assets less than $6,000,000.
Veteran-Owned Small Business (VOSB)
Veterans are eligible to certify their business as a Veteran-Owned Small Business (VOSB). If they possess a service-related disability rating, then they may certify as a Service-Disabled Veteran-Owned Small Business (SDVOSB). These set aside types are growing very popular and easily exceed their 3% usage goals.
A HUBZone is the last major setaside. HUBZone means a company is operating in and employing a certain percentage of people living in a Historically Underutilized Business Zone. This a great set aside status to have due to the limited number of HUBZones competing for Federal Government contracts. In addition, it also gives HUBZone-certified businesses a 10 percent price evaluation preference in full and open contract competitions.
Reducing Your Competitive Field
Applying for one of these set aside categories has the potential to significantly reduce your competitive field!
Government Contracting Academy will guide you through the application process for these programs to give your company every advantage possible.
Leverage Small Business Liaison Offices for Government Contracts
Nearly every Federal Government agency or organization has a Small Business Office. These offices are critical to your initial success winning government contracts for small businesses. But, not for the reasons most small business owners think!
Register Your Company Before You Meet With the Small Business Liaison Office
The two most frequently requested items by the Small Business Office and to complete prior to meeting,
- Register your company on their organization’s online registration system if they have one.
- Bring marketing collateral, such as business cards, a 5-slide presentation and a single-page “marketing slick.”
The most important things to include on these are:
- Company’s NAICS Codes,
- Set aside status, if applicable
- Facility clearance level and your clearance level, if applicable
- Any company “differentiators.”
The Small Business Office will enter company information into a database. So slogans, statements regarding customer commitment and air-brushed images should not be the focus.
Beware of Targeted Solicitations
Once your company information is in the database, it will occasionally be queried for targeted solicitations. For instance, GCA Founder, Randy Wimmer, received three “targeted” solicitations for his first company. Contracting officers frequently use “targeted” solicitations to “game the system” to help a company the customer wants to win the contract. Responding to these is definitely not part of your business development strategy.
Here’s how it works. The customer wants a specific small business vendor to win a contract but is unable to sole source the contract to them without competition. In order to meet competitive bidding requirements, the contracting officer identifies and convinces two additional “technically” viable bidders to bid on the work. As expected, the desired small business easily wins because they possess all of the “inside” information that the customer really wants and the award process passes the “sniff test” by ensuring that a minimum of three “competitive” bidders competed for the contract.
Everyone wins, but you, the designated loser.
Here’s The REAL Value of Small Business Offices:
You Get Access to Program Managers Through the Small Business Office!
The real value in working with small business offices is not getting in their database, it is the network that they give you! Some offices will give you a list of all program
Who do you think has the authority to give you a sub-contract? The program manager or some small business liaison “wonk” in the corporate office?
The program manager does! And, with this list, you just got an express pass through at least a half-dozen gatekeepers to the one person who can give you a sub-contract!
But hang on, this isn’t even the best way to leverage small business offices to win contracts.
Government Contracting Academy will share with you the real gold mine that small business offices unknowingly give you!
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“Any business plan won’t survive its first encounter with reality. The reality will always be different. It will never be the plan.”
About Randy Wimmer
Randy’s first Federal Government contracting company was launched from his home after his kids went to bed. He later sold it for 8-figures. With nearly thirty years either in or supporting the Federal Government, Randy is the ultimate “industry insider,” having owned multiple successful contracting companies.