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Why Can't Startups Get US Government Contracts?

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Re: Why Can't Startups Get US Government Contracts?

#31

Post by drewpc »

something123 wrote: post #28

In my own experience working in defense, there are tons of small businesses working on contracts, the government is forced to spend so much money on small business that they often simply throw away money. I worked on R&D for a military system which I 100% knew the gov't didn't care about and threw in the garbage. All the big projects force the big guys to subcontract to smaller companies The problem is actually compl…

"the government is completely incompetent and relies on the huge defense contractors for guidance"

This is the catch 22 of any business. If you don't know something, either you hire people with that knowledge or you contract it out. If you can't properly supervise the work/project/acquisition because you don't have enough depth of knowledge, then it's very hard to get a good solution. In the end, the government is at the mercy of private industry because the government can't be the best at everything.

Re: Why Can't Startups Get US Government Contracts?

#32

Post by a8da6b0c91d »

mtberatwork wrote: post #23
ejcx wrote: post #12

Like others have mentioned, in my experience small startups can and do win Government contracts. Most founders have intimate knowledge of the contract process and a large network from previously working at a large DoD contractor. Once they have this information and rolodex, they normally have an easy time running a small defense contracting firm as a sub on large contracts and winning their own through contract vehic…

> Most founders have intimate knowledge of the contract process and a large network from previously working at a large DoD contractor. That's precisely part of the problem. Without a clearance, prior past performance or any other form of insider access, it's incredibly difficult and needlessly complex to navigate your small business through the maze of the procurement process.

The single largest weight in SBIR award evaluation is previous success in commercializing SBIR funded technology. It's a blatantly ridiculous catch-22.

Re: Why Can't Startups Get US Government Contracts?

#33

Post by keenerd »

et2o wrote: post #19
csense wrote: post #17

> "the Federal Acquisition Regulation, which is 1,895 pages long." > "We're passing laws within an election cycle, and when administrations change, our tendency is to layer in more laws instead of reforming the ones we already have" The problem is that our laws are simply too complex. If I was President, I would refuse to sign a law that didn't (1) expire if not explicitly renewed in 20 years, (2) fit on 10 pages (wi…

Not to side on the side of onerous regulations, but this is a little naive. There is good reason that many of these laws are as long as they are. Things have to be explicitly laid out in legal language.

Still, laws must be written before they can be enforced. Some adjustment should be expected. I've occasionally wondered if it would be possible to have a "Deletionist Party" who's sole political aim is simplification of the legal code.

Re: Why Can't Startups Get US Government Contracts?

#34

Post by ryandvm »

et2o wrote: post #20
Spooky23 wrote: post #13

These good government groups complain about this stuff, but they are the reason we have this ridiculous situation. Google "New York State Appendix A" for a good example of standard contract terms that you need to comply with to do business with that state government. Examples include: - You must certify that you don't use certain tropical hardwoods. - You must report on minority and female employees in some circumsta…

Is it really "ridiculous" to not use endangered tropical woods, or to report minority or female employee statistics? I understand it's a headache, but these seem pretty logical. Here is the link: http://ogs.ny.gov/About/appendixa.asp

Yes, certifying against every possible negative that some arbitrary entity had the wherewithal to lobby for is silly.

You make laws and prosecute the offenders, you don't make everyone you do business with pay money to prove that they don't engage in every possible negative activity.

Re: Why Can't Startups Get US Government Contracts?

#35

Post by Quequau »

mynameismonkey wrote: post #22
drewpc wrote: post #8

Startups can and do get government contracts, but the government isn't going to come court you. You (the startup) have to figure it out yourself. Selling to the government is very similar to selling to any other industry/company: you (the seller or maker) have to understand the customer's acquisition process. The big difference is that the federal government is the largest customer--millions of people and trillions o…

We run a data/dev shop inside a non-profit 400 person company that is mostly gov contracting. _We_ will come courting. Most of our contracts require us to satisfy some percentage from five to 20% small business/woman/minority-owned. This could be services, consulting, pencils, you name it. We. Cannot. Find. You. The small businesses we know and love are not suitably registered with the fed/state certifications. We ro…

I have a good friend who has run his own 2-5 person shop for years and lately he says that they're often excluded by decree because the contracts stipulate some sort of minimum size of business that is acceptable.

Do you have any suggestions I might pass on?

Re: Why Can't Startups Get US Government Contracts?

#36

Post by mynameismonkey »

Afforess wrote: post #26
et2o wrote: post #20

Earlier quoted context omitted.

Is it really "ridiculous" to not use endangered tropical woods, or to report minority or female employee statistics? I understand it's a headache, but these seem pretty logical. Here is the link: http://ogs.ny.gov/About/appendixa.asp

Yes, it is ridiculous. I can not imagine how the choice to use tropical woods, or the number of minority employees would impact the final result of a business contract . The government should be concerned with the end result, not the minutia. This sort of detail-peddling is why only massive corporations can attain government contracts. Regulatory capture is the inevitable end result.

The federal government is not a for-profit corporation intent on profit. Consider it more as a social service mission driven non-profit. Federal contracting is mission-driven by specific regulation, whether it be defense or health or transportation or whatever. The US govt. is not about end results, it's about process which hopefully leads to end results. The US, as a people, through the voice of the elected federal government, has determined that taxpayer dollars should not fund tropical hardwoods but should fund the growth of minority-owned businesses. Agree or disagree on the goals, that is the mission of those tax dollars.

As a contractor seeking to spend those tax dollars, you are effectively signing up to help execute on the US population's stated goals as a people, not achieve the best business result for a government agency. Until you understand this, government contracting is not for you.

As for disruptive start-ups, in my 15 years working on state and federal contracts, every single agency that has requested "innovation", "disruptive change", "modern technologies" in fact means "please do this 95% of the way we did it last time, but add some shiny magic so we can feel good about progress".

As with any customer, your goal should be to give the customer what they want, while educating them about what they need. At the end of the day, you need to make your customer happy, and for a federal agency that often means don't fail, don't get their name in the paper. Which generally comes from doing it in a predictable fashion with incremental change.

Re: Why Can't Startups Get US Government Contracts?

#37

Post by bane »

There's a ton of startups that get U.S. government contracts. It's not hard and in fact the government specifically sets aside something like 30% of contract awards to small businesses and other disadvantaged businesses. There's an entire industry of forming startups that only chase after small business set asides, then sub in a major government contractor to perform the work -- acting as a pass through. Startups that are very good at this end up "owning" lots of large contracts and then end up being acquired as a division of a larger defense contractor so they can squeeze the last few percent out of the contracts the startup holds.

Rinse, recycle and repeat. There's lots of very wealthy Beltway residents who's career is just spinning up businesses to do this. It's a kind of a parallel system to what goes on in the Valley.

Re: Why Can't Startups Get US Government Contracts?

#38

Post by douche »

I've worked for a company that had a handful of relatively lucrative defense contacts (not multi-million $ deals, but significant cashflows, especially considering how low-maintenance they were from a support perspective).

It was a husband-wife owned startup, but I believe actually incorporated under the wife (the CFO), which gave a leg up in certain DOD bidding processes, through various woman-owned-business grants and policies.

Re: Why Can't Startups Get US Government Contracts?

#39

Post by mynameismonkey »

Quequau wrote: post #35
mynameismonkey wrote: post #22

Earlier quoted context omitted.

We run a data/dev shop inside a non-profit 400 person company that is mostly gov contracting. _We_ will come courting. Most of our contracts require us to satisfy some percentage from five to 20% small business/woman/minority-owned. This could be services, consulting, pencils, you name it. We. Cannot. Find. You. The small businesses we know and love are not suitably registered with the fed/state certifications. We ro…

I have a good friend who has run his own 2-5 person shop for years and lately he says that they're often excluded by decree because the contracts stipulate some sort of minimum size of business that is acceptable. Do you have any suggestions I might pass on?

Follow the RFPs he would like to work on, see who wins them, call them, pitch product/service. Bring along certification of small business and make the small business vehicle the pitch, not the product/service.

Let's say I need data analysis. Thousands of companies can service this need. Very few have the specific certification for the fed agency/state/municipal requirements du jour. I have no solid way of searching all holders of all these certifications by service line.

So, I search online, I call peers, I dredge for vendors. Vendors who approach me and can quickly communicate their contract value with small business/minority-owned/women-owned whatever, and can demonstrate their knowledge of the particular market the RFP is for means they know and are ready to be added to a larger RFP and can document their claims.

For me, this saves me time and money, and brings value.

Re: Why Can't Startups Get US Government Contracts?

#40

Post by [deleted] »

Afforess wrote: post #26
et2o wrote: post #20

Earlier quoted context omitted.

Is it really "ridiculous" to not use endangered tropical woods, or to report minority or female employee statistics? I understand it's a headache, but these seem pretty logical. Here is the link: http://ogs.ny.gov/About/appendixa.asp

Yes, it is ridiculous. I can not imagine how the choice to use tropical woods, or the number of minority employees would impact the final result of a business contract . The government should be concerned with the end result, not the minutia. This sort of detail-peddling is why only massive corporations can attain government contracts. Regulatory capture is the inevitable end result.

[deleted]
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