Government procurement opportunities for small and disadvantaged businesses

Procurement in Government Contracting

The government procurement process is identified by purchase of goods and services that will be used in provision of public goods and services like transport, railway, education, health, defense etc. It is not easy to qualify as a supplier to the government bodies since it needs to comply with quality standards. However, this might not be possible for small and disable-owned businesses. In order to offer these firms the opportunity to be a part of suppliers to state, the state takes special measures. There is a quota set for the participation of SDB (small and disabled businesses) in the government procurement. The research shows that women and minority in America are becoming increasingly innovative and their role in the economy has evolved over time. It would not be unusual if these segments become major suppliers to government one day. Thus, it is required that these businesses should be offered right opportunities to supply goods and services to the state-run projects. This will not only broaden their experience but also encourage other members in the society to start their own business and support their economic growth at individual, family and national level. However the government agencies should make sure that while they offer facilities and opportunities to the small and disabled-owned firms, these firms should not leave their pursuit for growth and competitiveness. These firms should keep up with their struggle for innovation so that they are capable enough to meet the needs of government procurement in future and compete with other local and foreign venders.

Introduction

Procurement lies most often in the beginning of all other processes of a company. A company, organization or entity cannot manufacture goods until it procures or buys material from a supplier. Also the service providing companies are dependent on procurement to facilitate their service provision. Procurement is basically obtaining or purchasing materials or services. The purchase is made after analyzing which supplier offers best material at best price. In steps, the procurement process includes planning for purchase, determining standards of an organization for material or services, laying specifications, researching and selecting supplier, analyzing value, financing, negotiation, and the purchase that involved exchange of cash and receipts. The public purchases or the procurement of the government are identifiable from the private purchases in many aspects. The government procurement involves purchasing huge quantities and exchange of often millions or billions of dollars as funds. The government purchases can be for strategic organizations, health, education or public facilities that involve benefit of hundreds of thousands of people. The Office of Government Contracting develops a culture where different businesses participate in the government contracts (U.S. Government Procurement Statistics, 2008). These include participation of small, disadvantaged, and woman-owned businesses. The GC office helps these businesses proceed in federal procurement world.

Research objectives

The objective of the research is to find how government procurement in United States involves the relatively small suppliers that include small business, disadvantaged business, minority owned and women owned businesses. The research also finds advantages of participating in government procurement process for these business types.

Research methods

The research is carried out by collecting secondary data. This data comes from the official websites of government bodies, the reports containing statistics of government procurements, journals, articles and other online and library resources. The data is used which is not older than seven years but most of the resources are not older than five years. Mainly the data is collected from reports and articles found at SBA (Small Business Administration) and FAR (Federal Acquisition Regulation) websites.

Research analysis

The secondary data collected during the research contains statistical reports, interviews and commentaries. On the basis of this data, facts are established to find if small and disadvantaged suppliers are ignored or helped in the government procurements in USA. The secondary data contains some charts and statistics that are also used in the report to offer a clearer picture.

Discussion and Analysis

State bodies procure goods and services for variety of reasons. These procurements can be made for goods or services. From running the cafeteria in public school to purchasing engines for the government helicopters, the state cannot make all the goods itself rather purchases them from outsiders. While the small businesses cannot supply space shuttles to the government organizations, they can at least play their role in projects that require small or medium size merchandise. It is very useful for the small business owners in USA to supply to government bodies. Thus these firms can enjoy relations with state bodies that are more safe and reliable. They can also be free of worries about frauds in procurement because the government is the most reliable partner when it comes to paying the bills of procurement.

The federal government of USA realized a couple of decades ago that there is increasing number of women, minority, disadvantaged and disabled people running their own business. In order to facilitate these businessmen, many Acts were passed and laws were made. According to these laws and Acts, the disadvantaged firm owners are asked to fulfill criteria after which they can be venders to the government projects. The details are discussed as follows.

Small Businesses

In the contracts of government procurement, as narrated earlier, huge amounts and quantities are involved. Thus the small businesses are out of race when it comes to supplying goods to the state bodies or the government. Therefore, in 2008, the government contracting bodies categorized the small businesses as SDB or small disadvantaged business (Contracting Support for Small Businesses, 2013). The state bodies do not require small businesses to submit applications to having the status of SDB. The small businesses are eligible for SDB criteria if they have 51% or more ownership in the hands of disadvantaged person(s). Also the disadvantaged person should be one who is disadvantaged in terms of social and economic status. The company should be standardized to according to SBA. To assist in participation in government procurement, the SBA helps through Business Development Program to offer SDB assistance in technical, managerial and contractual capacity. The HUBZone Program assists businesses base in rural and urban areas to know about opportunities and access and utilize them

Disabled owned Business

The state does not only understand that the small businesses find it hard to avail government contracts but the businesses owned by disabled people are also less likely to compete open venders. Thus such businesses are specially facilitated so that they can try also to be suppliers to the government projects. The Veterans Entrepreneurship and Small Business Development Act of 1999 say that there should be not less than 3% participation by small and disabled-owned business in the government procurement (Service-Disabled Veteran-Owned Businesses, 2013). Setting this minimum quota helps the disabled-owned businesses get access to procurement opportunities at national level. There is a program Service-Disabled Veteran-Owned Small Business Concerns or SDVOSBC established after Veterans Benefits Act of 2003 to ensure that the competition is restricted for disable owned business. Any disable owned business is eligible under the criteria if the Service Disabled Veteran has service-connected disability that Department of Veterans Affairs or Department of Defense accepts. He should also own 51% interest in business and manage the business' daily operations. This ownership and management should be direct. The set award price of contract does not exceed $5.0M in case of manufacturing and $3.0M for rest.

Women in business

The business owned by minority or women are also pampered do that they can play a role in government procurement. Women-owned small business and economically disadvantaged women-owned small business are facilitated and government organizations have been established to expand federal contracting opportunities these business (Women-Owned Small Businesses, 2013). The eligibility is assured when a business is owned 51% by a woman and controlled by one or women. These women need to be citizens of America and the firm should fulfill the requirements of being small as set by SBA.

The women are found to be very innovative in many industries that make them favorable as suppliers (Yakowicz, 2012). The women particularly are good at fashion designing that makes them suitable contractors for designing uniforms and dresses that can be worn by officials. The women are good at textile design as well as cooking. They can therefore participate in procurement of bakery items to cafeteria in government buildings. The disabled individuals often run business that is innovative in a special service like woodworks or other handicraft. These businesses can therefore be consulted to supply furniture etc. To government buildings, schools and hospitals.

Differences and advantages in the award process

The award process in government procurement is different as well as better in many aspects than the award process in corporate or open market world. The corporate bidding for the contracts demand high level of competition while the bidding for government projects has a special place for those parties too that are not highly competitive but constitute a reasonable portion of the economy (Local Government Purchasing Assistance, 2013). These include businesses owned by minority, women, disadvantaged or disabled people. The procurement process in the government projects offer some advantages including:

a) The government offers quota for the business owned by disabled, disadvantaged, minority or female owners

b) The payment system is reliable

c) Small businesses get opportunity that they would not be able to access in competition

d) The overhead costs reduce since state handles the bidding process

e) The small businesses get opportunity to have vender relations with government

The office for Government Contracts id the organization that is best helpful for all the small businesses and firms owned by disadvantaged people (Small Entity Compliance Guides, 2013). The GC office sets quota for them and also helps them by offering information about dates of procurement. In this way, these firms are included in the race to supply to the government projects and be a part of bigger business world despite the fact that they supply relatively small quantities.

Conclusion

There are segments of society that are beneficial in their own aspects. A big corporate may not be interested in purchasing plastic brushes from a disabled owner of a business because he offers merchandise at a relatively higher costs. Thus he may purchase the merchandise from a Chinese vender. On the other hand, the disabled person is the responsibility of state too. Thus the federal organizations make sure that small businesses that are owned by minority, women, disabled person or a disadvantaged person are not neglected. To make them a part of main stream business, the federal organizations offer a quota for the. Such small and disadvantaged businesses can participate in government procurement processes. They simply need to fulfill criteria set by federal agencies after which they are informed about the opportunities to vend to the government projects. Thus these businesses can avoid competition and are able to supply goods or services at a good price where they do not have to worry about the payment of the material or services. The state plays double role when it helps its citizens to provide goods and services to the state run programs. They citizens are helped in their firms growth as well as their national exposure is enhanced that makes these firms more competitive as well as productive.

Recommendations

The government has been taking steps since decades to ensure that the disadvantaged segment of the society does not fall behind the opportunity to supply goods to the state and enjoy good vender relations. Yet there are many things that the system can introduce to make it more facilitating for the people. There are some recommendations that are likely to help the state facilitate disadvantaged businesses:

a) There should be specific facilities in every industry for the women, minority, disabled and disadvantaged people. The state should ensure that these businesses participate in all kinds of business procurement thus implementing their participation in each segment including agriculture, building, technology, ecommerce, exports, transports, shipment, fishery etc.

b) Besides offering facilities, the state can offer quality check services to the venders so that they can evaluate their products or services well before they have to supply them to the government. Quality check teams can help small business owners how to make their service or goods more appealing to the government.

c) The government contracting bodies should make sure that while the small businesses seek opportunity to supply to the government, they should not lose the vision to become more competitive. The pursuit for growing their business should run side by side and the government besides should counsel small and disadvantaged business owners to grow continuously to be able to fulfill the future procurement needs of the government.