Federal Contract Opportunities Open

July 28, 2003
| By Katy Rent |
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GRAND RAPIDS — An increase in federal government spending for homeland security and rebuilding Iraq, coupled with new rules to stimulate new ideas and products, has created an explosion of opportunities for West Michigan companies in the arena of government contracts.

When it comes to looking for, bidding on and acquiring government contracts, however, many local businesses fall short. Some are missing out due to inexperience in getting on bidding schedules, pricing goods and services inappropriately or failing to comply with government purchasing requirements.

What may be surprising for many businesses to learn is that it is actually much easier to obtain a government contract than many may think.

“The federal government in particular is the largest purchaser of goods and services in the world and not only do they buy a lot, they buy everything,” said George Ash, government contract legal expert at the law firm of Dykema Gossett. “Office supplies to furniture, high tech, cutting edge work to janitorial services — virtually anything that someone is selling, someone is buying. So there are great opportunities.”

Last year, Michigan companies were awarded more than $3 billion in federal government contracts, as compared to $2.8 billion in 2001 and $1.8 billion in 2000. Awards in 2003 should escalate for Michigan companies when national spending for government contracting will exceed $250 billion.

Ash said there are a number of reasons why companies aren’t getting into the contract business, including unfamiliarity and the fact that up until a few years ago doing work with the government was a cumbersome and bureaucratic process.

He noted that in the past few years, however, there have been some changes in the regulations that encouraged the government to buy more commercial products.

“At the same time these are government contracts and they have deep provisions, and you have to be able to meet the standards and perform the work the government is asking for. And if you do it right you can certainly make a lot of money,” said Ash.

One way companies can obtain information about government contracts is through the Government Services Administration Schedule (GSA). The GSA, available at www.gsa.gov, is also referred to as a catalog, used by sellers to check the solicitation and register their services or products, and from which government agencies around the world can, in effect, buy those services or products.

Ash said this past year there were about $22 billion in goods and services sold off the GSA — and nearly 80 percent were to small businesses.

In fact, for some larger manufacturers, there are disadvantages to the system, said Onder Ors, vice president and general manager of Bates Uniform Footwear, a division of Wolverine World Wide.

WWW and the Bates Division have been the recipients of government contracts for several years, but Ors noted that the company has often been eliminated from a project because the company is too large.

“We understand this is the nature of the program, but there are many good contracts out there that we are restricted from,” said Ors. “This is a rule that has been dictated by legislation and mandated to make sure small businesses have their fair share of bidding and contracting.”

Specifically on the GSA, Ash noted that often those seeking goods and services may go straight to the company and purchase without any competition; a practice he said is not regulation.

The process usually consists of considering at least three proposals and then going with the best company, based on several criteria and not limited to cost.

The first step to getting a government contract, Ash said, is to find the right product.

“What can you sell? Is it a good or service? Or if you have an idea, what is it going to take to develop it?” said Ash. “Second, why would the government be interested?”

For new companies looking to get into government contracting, Ash suggests Procurement Tax Advisory Centers, which are designed to assist companies — small businesses in particular — that are interested in working for the government.

“They (the centers) will have some low-cost training, how to write a proposal, things of that nature,” said Ash. “They will help them do Web searches for work, they will help with unique specifications for government clauses, they will help you find those. They are a good resource.”

With that background and base of knowledge, Ash said many government contracts can be monetarily rewarding and personally gratifying. He said it seems some companies are looking to be part of the current surge of patriotism and want to help the government carry out its mission.

One area Ash said the government is getting into more deeply is new technology. With the newly created Homeland Security agency — a combination of more than 20 government offices aiming to protect the country from terrorism — the government is focusing on technology, inventions, processes and services that protect the country against terrorist threats.

“There are some great opportunities to have research funded,” said Ash. “There are other plans called SBIR, Small Business Innovative Research program, where every agency is required to take a certain amount of its procurement budget, like 1 percent, and set it aside for small business. This is where companies that meet those standards can say, ‘I have an idea about a new product or technology’ and get the government to fund the development of that idea. This is quite common, and a number of companies have become established by having the government fund their technology.”

Ash added that for the larger companies he would suggest talking with some legislative relations people in Washington who would set the business up with the correct people.

“We would talk to them about what agency does it make sense to introduce your product to within the federal government, so that they are seeing the product line you have and we can get you introduced to the right people. (It’s) a different marketing approach than what I would send the small business through.”

Ash said it’s important to remember that the government produces nothing, but needs almost everything — and needs it from small and large companies alike.   

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