For us, the biggest problem was the sales cycle. For a $30k project we were looking at a ~10 month sales cycle. With normal clients, we could have closed a $30k sale in six weeks.
Why Can't Startups Get US Government Contracts?
41–50 of 71 posts
Re: Why Can't Startups Get US Government Contracts?
#42Like 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.
I've never seriously pursued it, but at SLCC, there is a guy whose specific job is to help little companies break into government contracting. You can meet with him and he'll tell you where to register your company and how to get the ball rolling on becoming eligible for contracts. He'll help you bid on specific contracts afaik.
You don't necessarily have to navigate the "incredibly difficult and needlessly complex" infrastructure without help.
Re: Why Can't Startups Get US Government Contracts?
#43These 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
The ridiculous situation isn't using endangered wood, it's doing business with the government entity as a startup. And if you want to do business in Delaware, or Chicago, or the DoD, or Vermont, you need to figure out 50 other things.
Here's the thing -- all of these things are at some level logical. Companies shouldn't discriminate against people and cut down rain forests. But the proposition asked by this article and thread is "Why can't startups get government contracts?"
End of the day, to do business with big government entities, you need to spend many dollars on attorneys and lobbyists before you make a cent. And after closing the sale, you need to maintain staff to be SMEs on all of the various compliance regimes that you need to comply with. You need to be big to swim in those waters.
Re: Why Can't Startups Get US Government Contracts?
#44Earlier 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?
The concept of "fairness" that I talked about in my previous post applies here. If two companies submit proposals in response to an RFP seeking to acquire 1,000 Widgets and Company A responds with a price of $10,000 while Company B responds with a price of $20,000, the government is required to chose Company A because they are cheaper. However, if Company B is a small business/minority-owned business/service-disabled-veteran-owned-business/etc, the contracting officer can choose Company B because it fulfills other requirements to support those types of businesses.
I could see some small cases where the government would restrict the size of the company responding to an RFP, but there are also ways around that. The small business can contact the contracting office and protest saying they were unfairly considered for that acquisition and usually will win.
The key to the Federal Acquisition Regulations (FAR) is that they try in earnest to support and encourage fairness when awarding contracts. Furthermore, the government goes out of its way to give the "underdog" a better-than-equal chance at winning the contract.
As another poster said, the small business can't lose out on other reasons (i.e. certifications, financials, etc). It could be that they're losing contracts for very different reasons.
Here are some links for reference:
SBA size standards: https://www.sba.gov/content/small-business-size-standards
GSA Small businesses: http://www.gsa.gov/portal/content/202261
Small business set asides: https://www.acquisition.gov/?q=browse/far/19/5&searchTerms=s...
Protests: https://www.acquisition.gov/sites/default/files/current/far/...
Re: Why Can't Startups Get US Government Contracts?
#45Earlier quoted context omitted.
> 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.
I've never seriously pursued it, but at SLCC, there is a guy whose specific job is to help little companies break into government contracting. You can meet with him and he'll tell you where to register your company and how to get the ball rolling on becoming eligible for contracts. He'll help you bid on specific contracts afaik. You don't necessarily have to navigate the "incredibly difficult and needlessly complex"…
Yup, there's an entire cottage industry that has developed just to help companies through the procurement process. I get spammed by them every day.
Re: Why Can't Startups Get US Government Contracts?
#46Earlier quoted context omitted.
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?
The concept of "fairness" that I talked about in my previous post applies here. If two companies submit proposals in response to an RFP seeking to acquire 1,000 Widgets and Company A responds with a price of $10,000 while Company B responds with a price of $20,000, the government is required to chose Company A because they are cheaper. However, if Company B is a small business/minority-owned business/service-disabled…
> If two companies submit proposals in response to an RFP seeking to acquire 1,000 Widgets and Company A responds with a price of $10,000 while Company B responds with a price of $20,000, the government is required to chose Company A because they are cheaper.
They aren't required, but not doing so will necessitate a good justification. The Small Disadvantaged Business (SDB) designation is basically an automatic justification, but not the only one. Contractor past performance, the reasonableness of the bid, and other considerations can drive the government to actually choose a higher bidder. It also matters whether Widget is off-the-shelf or bespoke; the contracting officer tends to get more discretion in the latter case.
Re: Why Can't Startups Get US Government Contracts?
#47'Why Can't Startups Get US Government Contracts?'
Simple: startups represent market disruption, and bureaucracy by definition can't deal with disruption.
Re: Why Can't Startups Get US Government Contracts?
#48These 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
> Is it really "ridiculous" to not use endangered tropical woods
Let's say that I buy an antique desk. I might have an endangered tropical hardwood, but it was cut LONG before the law even existed!
Or what if I buy reclaimed teak from an old steamship deck and turn that into a lovely couch. It was harvested 150 years ago, perhaps even before the US civil war. But I wouldn't be able to certify, would I? How is that reasonable?
The point isn't that it's crazy to expect people to behave like good citizens, it's that there are a ton of corner cases that the requirements don't address because they were written as "feel good" not as "this is actually good"
Re: Why Can't Startups Get US Government Contracts?
#49Startups 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…
" The federal government's Small Business Administration (SBA) attempts to help companies with fewer than 1,500 employees win government contracts. The SBA's goal was to award 23 percent of all federal prime contracts, and 38 percent of all federal subcontracts, to these kinds of businesses. But Holman says they have "failed miserably in getting anywhere near that goal.""
As a former employee of an SBA favored, minority woman owned business, let me make something very clear: The entire SBA small business process is itself gamed and owned by former employees (and their still employed buddies) of the big government contractors.
Case in point: My particular "start-up" was "owned" by my COO's wife. She was CEO in name only, but had 51% ownership because she was of Fillipino descent, and therefore qualified as a minority-woman. My COO was a white male who was truly the CEO. His wife was a stay-at-home mom, but on the company's pay roll. Since the other SBA stipulation was that there was a maximum profit limit for the company, the COO and his other buddy both had their wives listed as employees to pay them each the maximium allowed salary of $300,000 a year.
Think that was ugly? Then there was the other peace:
My company would bid on contracts, and when we won them, would simply sub out large portions of the work to the same giant defense contractors. This is not the exception, but the norm.
It is a rigged system with numerous bureaucratic rules which are exploited by the people who know the rules best. Whether or not your company actually knows how to do work is separate from the true qualifier for winning work, which is knowing the system and gaming it.
Fuck all of that. I'm so happy to be in the private sector now.
Re: Why Can't Startups Get US Government Contracts?
#50Startups 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…
My understanding is that it's entirely possibly for just the contract pursuit process to overrun a project before one jot of work is expended on actual fulfillment.
That's less likely than in transactions with private companies - although for IT projects...