SBA Budget Increase: What's The Impact?

If you've been paying attention to the news and popular media in the past few weeks, you are sure to have heard about the meeting between Jon Stewart and Jim Cramer. Their debate is already going down as one of the most controversial in history. However, how many people are talking about the House decision on the SBA budget that came out at almost the same time?

Not many.

This is for the simple reason that, to most people, small business government contracting just isn't as 'sexy.' It is a dry, difficult topic which few people partake in and even fewer truly understand. However, it is just this topic with which you, the small businessperson, should be familiarizing yourself during these times.

As one of the benefits of the stimulus package, a House panel decided to approve a vastly larger budget for the SBA in 2010. This increase of over $700 million roughly triples the budget for next year, providing a wide array of advantages to the small business owners interested in doing work with the federal government.

The SBA is the small business owner’s best friend in the federal government. It is literally their job to make sure that you get contracts and money; adding to their powers is going to make it much more likely that a small business will be able to get a contract.

For one thing, the federal appropriation to subsidize SBA loans has been put back into place, which will make it easier to get funding and money from the Small Business Association. This will raise the overall amount of loans the SBA can back to over $28 billion. This is going to increase federal contracting opportunities over time.

By getting started now, your business can be perfectly positioned in time to get access to some of the stimulus billions. This decision to increase funding to the SBA is likely to add just that much more opportunity for your company!

Step 3: Price Yourself to Perfection

Hello everyone! Welcome yet again to another installation of Gateway to Government’s Seven Steps for Successful Contracting. Each day this week I will focus on ways you can gain an advantage over competitors and maximize your small business’s chances of getting government contracts. Each step will examine different aspects of federal contracting, all with the goal of increasing your business. Today is Step 3 of 7, focusing on how to price your bids for government work.


Step 3 – Realistic Pricing

As it would be with any business venture, the pricing of your product or service for government contracting is very important. With government, pricing is not always the only factor (some contracts are based on ‘best value,’ but it is always a strong consideration. Contracts worth thousands, even millions of dollars have been won or lost literally by a one-cent difference in bid price. Research your product and know what it is worth – but don’t cut so thin that you aren’t going to make any money! Remember to include your costs, overhead, time, and profit into the price, just as you would any other contract. However, be careful – in some circumstances, the government can come back to you and ask for documentation explaining how you can to your pricing.

The government always expects a discount; however, they don’t want you to sell yourself short. President Obama recently said “small businesses are the backbone of our nation's economy and we must protect this great resource.” His statement affirms that while the government does expect you to give a good price for your service or product – generally under the MSRP for goods, for example – it doesn’t have to be under its value. Many contracts are awarded solely on price, so be sure that you can be competitive! However, as you know, not all of them are. Gateway will indicate which projects are based on price, and which are on ‘best value,’ meaning that other factors are evaluated, and what they are. Factors can include delivery time, performance history, and a wide range of other possibilities, but all will be detailed in the bidding documents.