Monday, April 13, 2009

Don’t Feel Scammed By Uncle Sam

With any administration, there will always be a group of people that feel discontent or a certain animosity towards those in power. Especially with the complete make-over that the Federal Government has recently endured, now more than ever, people are expressing their opinions on the state of affairs. I decided to see what people on Twitter thought of when they heard/saw the words “government contracting” – something I write and read about everyday.

I wasn’t surprised with some answers. It appears that everyone’s first thoughts immediately go to mercenaries, transport, or weapons systems. Typically, people think of big businesses that are known as big business government contractors, such as Lockheed Martin or Boeing. While they do receive a large portion of the contracts, smaller businesses are reserved at least 25% of all government contracts. It just seems like a lot because when analyzing charts showing how much government contracting companies made annually, it appears drastically divided. However, I can assure you that many government agencies are looking for small business owners to work with—for example, the Air Force is actively looking for businesses to increase competition and innovation for their benefit and spends roughly $9 billion a year on small businesses.

My only argument for that is how many small businesses do you know that hire aerospace engineers? Well, there is one that I know about the created a GPS navigation system for the Air Force, and was sub-contracted out by a bigger business that had won the original contract. A problem that arose from this instance was that they were scammed out of winning the bid themselves and the prime contractor left them out of the loop. While this example might be what most small business owners fear, some good came from the experience.

A new act is being created in order to prevent something like this from happening again. United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu (D-La) states, “Sections 205 of the Weapons System Acquisition Reform Act will go a long way toward protecting small businesses from conflicts of interest while eliminating waste and inefficiency at the DoD. Section 203 of the bill would also help to maximize competition for defense acquisition contracts, which will help small businesses because it creates more potential opportunities for them to participate.” While this is a small victory for the technology driven sector of the small business community, it is proof that Uncle Sam is starting to force himself to take care of small business.

Another opinion about government contracting is it is an over-budget, red tape bureaucratic institution, full of earmarks, campaign donations, lobbyists, and corruption. While there is truth to that statement, there are inaccuracies as well. For instance, the US tried a contractor in Iraq who committed widespread fraud on US dime in Richmond, VA on Monday and will be required to pay back every penny to the US Government. Originally, the judge in Alexandria, VA had made two rulings that would have allowed the contractor to forgo repaying the government. The Richmond court found the contractor guilty under the False Claims Act—creating fake invoices and inflating his costs significantly. The government does not actively pursue corruption, but just like anyone doing business, finds it along it’s way. This is just one example of how Uncle Sam tries to fix his mistakes—because who is perfect?

The final opinion I came across was that government contracting is a long process, involves lots of compliance documents, long decision period, but once you get it, it PAYS! I think that’s true with any business venture. You have to build a reputation before people begin to come to you and the profits begin to show. However, with government contracting, not only do you have to show that you are willing to work with the government, i.e. prove that you can wait the 3-6 months for payment, but that you offer quality services and/or products. In addition, the compliance documents usually refers to the contracting and bidding process that we can help you with at a minimal fee, unlike other companies that typically charge anywhere from $135 to $235 per hour!

There are many negative connotations with the words “government contracting” and it really shouldn’t be that way. The US government is the largest buyer in the world and just because the media mentions the nastier sides of it doesn’t mean your business shouldn’t benefit. As this article proves, while there is corruption, red tape, and big businesses involved in federal contracting, Uncle Sam tries hard to favor small businesses, punish the corrupt, and allow the red tape be a barrier against future fraud.

1 comment:

  1. There is no question that the general public does not under government contracting. What is disconcerting is the misconceptions and outright inaccuracies of the federal contracting process by federal government. This does not even include Congress, which clearly does not understand government contracting, yet continues to create further burdening regulations and policies that only exacerbate problems and further stress an already over stressed acquisition workforce.

    The negative opinions of government contractors are also aligned with these biases. The mentality with government is adversarial, in which large government contractors are inherently bad and out to rip off the government. However, the view of small businesses is not that positive either. A government official I spoke to last week viewed small business as a risky endeavor for government, and often cannot deliver quality goods or services or be able to provide talented personnel.

    It is these types of biases and misconceptions that I encounter every day, and make me wonder how the government intends to be productive and perform their mission when they often do not trust the very people they have contracted to help perform the mission. Most large contractors provide very important services and act ethically. Furthermore, small businesses often provide a needed flexibility and commitment to service that many large businesses do not. Small businesses create 2/3 of the jobs created in this country, yet it seems like the past 30 years have created an acute epidemic of shutting small businesses out of opportunities in a rigged system that favors big business at all costs. This is where the army of lobbyist, influence, and corruption come into play that you point out.

    Contracting is the business of government management. I, along with the National Contract Management Association (NCMA), work very hard at providing those in both government and industry the information needed to make informed decisions about the federal procurement process and government contracting. My hope is that the media would realize that very dedicated people are placed into impossible situations with little oversight, leadership, or the resources to perform their jobs. However, when all you look for is fraud, abuse, and corruption, that is all you will see.