Whenever I’m talking to my friends about a news story and I can’t remember the exact source, I tell them to Google it. I don’t say it’s in the Free Lane Star or the New York Times; no, it is always Google it. With my parents, though, they always reference the local newspaper, The Journal. I think it only serves three very small counties. The other day I tried finding it online and when I did, the site was pathetic. No up-to-date status on stories; they literally posted the same thing that they put in their paper. The problem with this is that The Journal is only printed once a week. Usually the information is outdated or strictly local.
Most of these small town newspapers are failing in today’s internet journalism. Journalism is still alive and thriving; however, newspapers are dying rapidly. The Tucson Citizen in Southern Arizona will be closing it’s doors after 140 years this Saturday. They aren’t the only ones that are having issues keeping their paper afloat. The LA Times, Chicago Tribune, and Philadelphia Inquirer have all sought Chapter 11 bankruptcy protection in the past year.
The question shouldn’t be “Why aren’t people reading the news anymore?” but “Why aren’t newspapers going online?” My friends all have subscriptions to washingtonpost.com and it’s daily e-mails. I still get the real paper delivered to my apartment though. The only reason I have it isn’t habit, but because the subscription was free when I moved in. Now the only thing I use the paper for is kitty litter clean up. Fewer and fewer people still rely on newspapers as their go-to source. I know my Dad is one of them. It might be a generation difference, but more and more there are people in their fifties that prefer to go online and read the stories simply because it cost less.
Journalism won’t be a long-lost art because of the internet. If anything, it’ll make the job better because the information can always be up-to-date instead of eleven hours old. "The overall move to online has been big," IDG chairman Patrick McGovern said. "Print editions are yesterday's news. If it is news, people want to hear it as soon as they can." Journalism has evolved to fit this need of current news being, well, current. The newspapers that are failing aren’t following suit; The Washington Post and The New York Times are still doing well, serving both the traditional newspaper and one online with RSS feeds set-up to the most up-to-date information. These two companies have evolved with journalism; they took the leap from offline to online.
Newspapers aren’t the only companies that are faced with a decision to move online though. Radio made the move as well with sites such as Pandora allowing commercial free music channels that the user creates or iTunes. YouTube, Hulu, Break.com and other sites all have made television or funny videos available to you at any time. The digital age is upon us and being on the internet is critical to survival. Even if it is the simplest site ever, just having it up will help people find your business. I don’t use the phone book to look up businesses; I go to Google and look. The point is that if you don’t evolve, you’ll be left behind with the newspaper stands, yellowing in the sun.
Tuesday, March 17, 2009
Thursday, March 12, 2009
Not Down For the Count: Citigroup’s Round Two
Think about last year, 2008. What comes to mind? For many Americans graduations, vacations, and anniversaries are the first things that pop into their head. However, quickly following these happy thoughts are ones focusing on the declining stock market, job loss, and the economy. I think I’m the only one who thinks it was the year of the rat, which I’m sure no one else but Chinese food lovers know, thanks to the free Christmas calendar. Last year also marked a key time in America’s history—the government didn’t let big businesses fail. Multiple American-based corporations received bailouts to try to keep jobs within the company. One of the recipients was Citigroup and they didn’t just receive one, but two bailouts in 2008 totaling roughly $45 billion.
Not all of the companies that received a bailout have turned a profit since the check came in. However, Citigroup did make a profit for the first time in five quarters. At the end of 2008, Citigroup declared that they had lost $8.29 billion in just the fourth quarter of the year. The government gave them a second chance. The first time around, Citigroup received $25 billion from the Troubled Asset Relief Program, TARP, which barely covers the total loss for 2008 or the five consecutive quarters that the company declared a loss instead of a gain. They got another $20 billion in November of 2008 from the government and yet, Citigroup still declared a loss by the end of the year.
However, the company acknowledged they needed change. Originally, Sanford I. Weill formed Citigroup in 1998 when he combined the insurance company Travelers Group and the nation’s largest bank, Citigroup Inc. It was a revolutionary idea that was supposed to combine insurance, Wall Street business, and traditional banking together; what most of its shareholders quickly found was that it was a flop. Since Citigroup merged, its stock price has fallen more than 76%. Due to its faults, whatever they may be, Citigroup announced in January of 2009 that it would split the company into two facets: Citicorp and Citi Holdings.
Since Citigroup announced the idea for splitting up its company, it has given the government more control over the stocks; the taxpayers technically own up to 36% of them. Before March 10, analysts were predicting that Citigroup would require another loan from the government down the line, but they might be changing their tune soon. On March 9, 2009, the company received an internal memo stating that the first two months of the year were at an $8.3 billion profit before taxes in February. Citigroup’s profit announcement caused the DJIA to soar on March 10 379.44 points to 6926.49; it was the largest one-day gain this year and one of the biggest since World War II.
The spike in Citigroup stock does not mean that their troubles are at an end. Like most companies, big or small, there are difficulties that we all must face. By splitting the company into two, making it easier to manage, and allowing the management to prune the unnecessary waste within the corporation, the company cut back on its early losses in 2009. Small businesses can learn from the big businesses failures. By accepting that what their company originally did wasn’t working, Citigroup took the help that the government offered and tried fixing themselves. They didn’t continue on the same downward path, but tried something a little different. Small businesses will not have as massive of a bailout as Citigroup received, but there will be more opportunities within the government contracting arena that weren’t there before. Taking advantage of what the government offers and implanting change might be the key lesson that needs to be learned by the business community.
Not all of the companies that received a bailout have turned a profit since the check came in. However, Citigroup did make a profit for the first time in five quarters. At the end of 2008, Citigroup declared that they had lost $8.29 billion in just the fourth quarter of the year. The government gave them a second chance. The first time around, Citigroup received $25 billion from the Troubled Asset Relief Program, TARP, which barely covers the total loss for 2008 or the five consecutive quarters that the company declared a loss instead of a gain. They got another $20 billion in November of 2008 from the government and yet, Citigroup still declared a loss by the end of the year.
However, the company acknowledged they needed change. Originally, Sanford I. Weill formed Citigroup in 1998 when he combined the insurance company Travelers Group and the nation’s largest bank, Citigroup Inc. It was a revolutionary idea that was supposed to combine insurance, Wall Street business, and traditional banking together; what most of its shareholders quickly found was that it was a flop. Since Citigroup merged, its stock price has fallen more than 76%. Due to its faults, whatever they may be, Citigroup announced in January of 2009 that it would split the company into two facets: Citicorp and Citi Holdings.
Since Citigroup announced the idea for splitting up its company, it has given the government more control over the stocks; the taxpayers technically own up to 36% of them. Before March 10, analysts were predicting that Citigroup would require another loan from the government down the line, but they might be changing their tune soon. On March 9, 2009, the company received an internal memo stating that the first two months of the year were at an $8.3 billion profit before taxes in February. Citigroup’s profit announcement caused the DJIA to soar on March 10 379.44 points to 6926.49; it was the largest one-day gain this year and one of the biggest since World War II.
The spike in Citigroup stock does not mean that their troubles are at an end. Like most companies, big or small, there are difficulties that we all must face. By splitting the company into two, making it easier to manage, and allowing the management to prune the unnecessary waste within the corporation, the company cut back on its early losses in 2009. Small businesses can learn from the big businesses failures. By accepting that what their company originally did wasn’t working, Citigroup took the help that the government offered and tried fixing themselves. They didn’t continue on the same downward path, but tried something a little different. Small businesses will not have as massive of a bailout as Citigroup received, but there will be more opportunities within the government contracting arena that weren’t there before. Taking advantage of what the government offers and implanting change might be the key lesson that needs to be learned by the business community.
Tuesday, March 10, 2009
Trending Towards Transparency – How the Internet is Forcing People to be ‘Real’
Twitter, Facebook, MySpace, YouTube, and LinkedIn. What do all these sites have in common? They have created a startling new trend among people – being transparent. More and more there are adults on these sites and they are sharing with the world many things that only true friends would know about them. For instance, on Twitter I follow people that I have never met in person; I can tell you where they live, their style of music, what makes them laugh, and their favorite animal. It isn’t just ‘regular folk’ either; politicians, corporations, artists and more are on these sites in an effort to connect with the public and make their business seem more real and trustworthy. I commented about our recent post on innovation on twitter and within an hour I had an UPS employee contacting me to tell me that he has given up left turns in his real life as well!
The best part is that when politicians do anything, others pass along the information. Good, bad, funny—we’ll all know before the 6 o’clock news. That’s a scary thought. President Obama used Twitter and YouTube to his advantage during his campaign by keeping them constantly updated and personal. Someone in his employ understood the importance of instant, transparent access to information, giving him a decided advantage. President Obama has continued using these ideas to be more transparent now that he is in office as well.
According to Las Vegas Sun, the administration has created multiple ways for the public to monitor the stimulus spending. The president thinks that the public must know how government is spending the tax-payer’s money. “The White House created a Web site — www.recovery.gov — for citizens to track progress of spending. And the stimulus bill… contains $330 million for oversight, including $221 million to strengthen the inspectors general and $25 million for the Government Accountability Office…” Another way that the Obama administration is monitoring spending is through the creation of a special faction called the Accountability and Transparency Board, which will be headed by Earl Devaney, former Interior Department inspector general. Devaney states that he will work to stop fraud and waste, not merely detect it as previous administrations have.
This is a huge improvement from previous administrations that have been known for trying to hide what they’re actually doing. Maybe Obama is learning from some of the best Social Media experts who stress constantly that the best way to gain people’s trust and respect is to simply be yourself and hide nothing. Contrary to comedian Lewis Black’s popular skit, Americans don’t want to be lied to anymore. With the internet providing so many sources of instant information, people don’t want to wait to know anymore. While not everyone approves of the action taken by the Obama administration, they aren’t hiding anything; they let everything show on the internet in a wide variety of venues.
The best part is that when politicians do anything, others pass along the information. Good, bad, funny—we’ll all know before the 6 o’clock news. That’s a scary thought. President Obama used Twitter and YouTube to his advantage during his campaign by keeping them constantly updated and personal. Someone in his employ understood the importance of instant, transparent access to information, giving him a decided advantage. President Obama has continued using these ideas to be more transparent now that he is in office as well.
According to Las Vegas Sun, the administration has created multiple ways for the public to monitor the stimulus spending. The president thinks that the public must know how government is spending the tax-payer’s money. “The White House created a Web site — www.recovery.gov — for citizens to track progress of spending. And the stimulus bill… contains $330 million for oversight, including $221 million to strengthen the inspectors general and $25 million for the Government Accountability Office…” Another way that the Obama administration is monitoring spending is through the creation of a special faction called the Accountability and Transparency Board, which will be headed by Earl Devaney, former Interior Department inspector general. Devaney states that he will work to stop fraud and waste, not merely detect it as previous administrations have.
This is a huge improvement from previous administrations that have been known for trying to hide what they’re actually doing. Maybe Obama is learning from some of the best Social Media experts who stress constantly that the best way to gain people’s trust and respect is to simply be yourself and hide nothing. Contrary to comedian Lewis Black’s popular skit, Americans don’t want to be lied to anymore. With the internet providing so many sources of instant information, people don’t want to wait to know anymore. While not everyone approves of the action taken by the Obama administration, they aren’t hiding anything; they let everything show on the internet in a wide variety of venues.
Friday, March 6, 2009
Obama Charges Administrators to Reform Contracting
President Barack Obama on Wednesday ordered a much-needed look at and reform of the processes surrounding government contracting and procurement. This is to include virtually all agencies and branches of the federal government, including the Department of Defense, usually exempted from such measures. The following quote is from President Obama via the White House executive memorandum:
“I hereby direct the Director of the Office of Management and Budget (OMB)… and the heads of such other agencies as the Director of OMB determines to be appropriate… to develop and issue by July 1, 2009, Government-wide guidance to assist agencies in reviewing, and creating processes for ongoing review of, existing contracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency’s needs, and to formulate appropriate corrective action in a timely manner. Such corrective action may include modifying or canceling such contracts…”
What does this mean for the small business owner?
Well, that depends. If you have a long-term contract currently in place, immediately make sure that your processes are well documented and defensible. Excess waste should be cut out proactively and inefficiencies need to be addressed – nobody wants a contract canceled so be sure to take a look at what you can do to prevent it.
On the other hand, for companies looking to break into contracting, this is potentially a tremendous opportunity. As of July 1, 2009, existing long-term contracts will begin to be reviewed. Many incumbent contractors could be hoisted out of their positions, which means that many contracts will have to be refilled. Over the coming year many businesses will be tapped to replace the companies who have their contracts cancelled, so now is a great time to start positioning your business to take their place!
Obama also said he wants to “open up the bidding for contracts to small businesses,” which will help drive even more potential growth to the small business owner!
“I hereby direct the Director of the Office of Management and Budget (OMB)… and the heads of such other agencies as the Director of OMB determines to be appropriate… to develop and issue by July 1, 2009, Government-wide guidance to assist agencies in reviewing, and creating processes for ongoing review of, existing contracts in order to identify contracts that are wasteful, inefficient, or not otherwise likely to meet the agency’s needs, and to formulate appropriate corrective action in a timely manner. Such corrective action may include modifying or canceling such contracts…”
What does this mean for the small business owner?
Well, that depends. If you have a long-term contract currently in place, immediately make sure that your processes are well documented and defensible. Excess waste should be cut out proactively and inefficiencies need to be addressed – nobody wants a contract canceled so be sure to take a look at what you can do to prevent it.
On the other hand, for companies looking to break into contracting, this is potentially a tremendous opportunity. As of July 1, 2009, existing long-term contracts will begin to be reviewed. Many incumbent contractors could be hoisted out of their positions, which means that many contracts will have to be refilled. Over the coming year many businesses will be tapped to replace the companies who have their contracts cancelled, so now is a great time to start positioning your business to take their place!
Obama also said he wants to “open up the bidding for contracts to small businesses,” which will help drive even more potential growth to the small business owner!
Thursday, March 5, 2009
Innovation and Turning Left
Businesses that stay the same never seem to do well. Take Nokia – they started as a paper mill, but over time evolved into the communications giant they are today! Any good business course will tell you that with changing technology comes the need for your business to be flexible. If it isn’t, chances are your business won’t do as well as you’d hoped. And what brings on change?
Innovation.
Innovation is what keeps businesses going, growing, and running. Particularly in tough economic times like these, new ideas are what give any business the edge to remain afloat and ahead of their competition. Competitive advantage is what all business is about: ideas, practices, concepts, business methods, or anything else that gives your business the opportunity to outperform over others.
On any given day, a company we all know well, UPS, delivers almost 16 million packages, documents, and letters to countries around the world. They have almost 100,000 vehicles in their fleet, composed of cars, vans, tractors, motorcycles, and the iconic signature brown UPS trucks we see everywhere! It is virtually impossible not to see them rounding corners and parking all over the place while the driver runs in to drop off whatever parcel they are delivering. One thing you may not have noticed, however, about UPS trucks:
They. Don’t. Turn. Left.
…What?
Photo Credit to Flickr Member zyphbear
That’s right. In 2004, after evaluating rising transportation costs and their environmental impact via CO2 emissions, UPS implemented a novel idea: cut out left turns. They plan delivery routes to avoid the need to turn left; simply by eliminating the time spent idling and waiting for the light signals to turn left, they managed to dramatically reduce fuel costs and several other expense factors. Obviously, in some cases it isn’t possible to totally eliminate it, but by planning to avoid it, UPS estimates that in 2006 they saved over 28.5 million miles of travel and over 3 million gallons of fuel – at 2006 prices (roughly $2.60 per gallon) that would be equivalent to about $7.8 million – just on fuel costs. Include the decreased labor hours, 28.5 million miles less of maintenance, reduction in accidents (left turns have high-accident occurrence rate), reduced environmental impact, and everything else, and UPS saves tens of millions of dollars per year with this one, simple, innovative change.
UPS looked at their existing business and found a new way to improve it. This gives them more money to grow their business, explore new avenues, and find other ways to grow! The UPS example illustrates the power of taking innovative, out-of-the-box, off-the-wall, even crazy ideas – ones which your competitors might scoff at – and Take a look at your business – what areas are going to help you grow? How can you improve your offerings, reduce your unnecessary costs, or add value to your products? Are there any new niches you might want to expand into?
Innovation is what keeps any business running. You already have several competitive advantages - you know what they are. Be they you business model, government sales, a particular patent, that special client, or an unusual business practice, there’s always room for improvement or expansion – who knows, maybe you can discover your own ‘turn-about’ idea!
Innovation.
Innovation is what keeps businesses going, growing, and running. Particularly in tough economic times like these, new ideas are what give any business the edge to remain afloat and ahead of their competition. Competitive advantage is what all business is about: ideas, practices, concepts, business methods, or anything else that gives your business the opportunity to outperform over others.
On any given day, a company we all know well, UPS, delivers almost 16 million packages, documents, and letters to countries around the world. They have almost 100,000 vehicles in their fleet, composed of cars, vans, tractors, motorcycles, and the iconic signature brown UPS trucks we see everywhere! It is virtually impossible not to see them rounding corners and parking all over the place while the driver runs in to drop off whatever parcel they are delivering. One thing you may not have noticed, however, about UPS trucks:
They. Don’t. Turn. Left.
…What?
Photo Credit to Flickr Member zyphbearUPS looked at their existing business and found a new way to improve it. This gives them more money to grow their business, explore new avenues, and find other ways to grow! The UPS example illustrates the power of taking innovative, out-of-the-box, off-the-wall, even crazy ideas – ones which your competitors might scoff at – and Take a look at your business – what areas are going to help you grow? How can you improve your offerings, reduce your unnecessary costs, or add value to your products? Are there any new niches you might want to expand into?
Innovation is what keeps any business running. You already have several competitive advantages - you know what they are. Be they you business model, government sales, a particular patent, that special client, or an unusual business practice, there’s always room for improvement or expansion – who knows, maybe you can discover your own ‘turn-about’ idea!
Tuesday, March 3, 2009
Budget Cuts and Penny Pinching – Why the Government Isn’t Like Everyone Else
March marks the first time that I have ever actually forced myself to plan a budget. I recently bought a car (Bambi thought my old one wasn’t hip enough and totaled it for me). I’m also looking for a home to purchase; if I stay in my apartment past May, rent increases almost by half! Over the past month’s I’ve found that with my car insurance spiking, rent payment, and everything else, I can’t afford to eat out as much or purchase frivolous items such as bottled water, funny shirts, or DVDs. So, I’m hunkering down, forcing myself to stay in on Friday nights to play monopoly, drinking lots of tap water, and watching cable that’s already paid for.
I’m not here to give finance advice – I’ll leave that to the experts. But I am noticing a trend amongst my friends and coworkers. We’ve all cut back on things that cost money that we used to do on a regular basis without thinking and are saving money as if it’s a precious commodity. Well, for many (and more each day) it is! I’ve been reading more and more in the news about middle-aged individuals losing their jobs and dipping into their 401(k) accounts early or draining their savings to make ends meet. Getting a job isn’t easy either right now, especially when I know people who have applied to dozens of jobs and if they get a response at all it is a rejection. Like many people, I’m planning for the worst and squirreling away anything I possibly can.
So why is the government implementing an economic stimulus package that entails spending nearly a TRILLION dollars instead of saving money?
Many conservatives on www.twitter.com frequently tweet about the stimulus package and how it “oddly” reminds them of the German attempt in the late 20s. I don’t agree. Even though the Obama administration in many cases isn’t putting in formal checks and balances to ensure that the money isn’t misappropriated or poorly handled, many Senators are doing what they can to increase transparency and oversight. Michael W. Brubaker (R-PA), for example, wants to create a nine-member panel in Pennsylvania made up of state officials to manage the economic stimulus money. His state alone is set to receive $10 billion of the money set-aside for state building. If his bill is passed, which hopefully it will be, this panel will help prevent corruption and boost the local economy within the state. However, PA is ahead of the senator and has created a website that will allow the public to monitor the spending.
One of the benefits of posting the spending online is the level of transparency it creates. The stimulus bill is something that the American people have heard about non-stop for the past several months. With the aid of the internet people have access to developing stories 24/7, letting those who are interested keep up-to-the-minute on the progress of governmental affairs, especially with www.CSPAN.com’s streaming feed to the House and Senate debates. This week some of the first expenditures from the stimulus package are happening, focusing mostly on information technology support and staff. Michael Carleton, Health and Human Services Department’s head officer, said, “There are provisions in the law that require the money in the Recovery Act to be subject to a higher level of transparency than is the convention.” Carleton thinks that these expenditures will help make that happen.
I like to compare the stimulus bill to Franklin Roosevelt’s New Deal, designed to create new jobs in the 1930s. Vast swaths of American infrastructure, schools, and even the Appalachian trial exist today because of that plan. States are spending wisely if they invest in IT first because in today’s society, information is the key to getting anything done. Without the necessary support of technology, the spending could in many cases go awry and unchecked. FDR focused on projects that kept the American public busy, while providing future generations with something free to enjoy when there is an economic hardship. We can still enjoy those trails today even though we are budgeting and that should make all of us happy. It makes me forget that I can’t see the latest movie, buy the newest computer, or eat out three times a week.
While it seems ridiculous to many people that the government is spending such tremendous quantities of money during a time when the general public has had to cut back, I think it’s necessary - as long as there is enough transparency with this act. It’s our money, we should see to it that it is properly spent on rebuilding our economy, eventually letting us spend our money as we wish again, hopefully leading us back into prosperity. Right now, the main reason we need the government to put money back into the public is that we can’t spend money to help other businesses out. As much as I would like to, I can’t go down the street to buy from the local farmer’s market; the huge grocery store chain is cheaper, and every penny counts. Businesses will benefit tremendously from the surge in money, especially those involved in government contracting. The more money the government spends on us, the more we’ll have to spend later, which will eventually boost everyone up, even those not involved in contracting who don't get it directly from the government.
The stimulus plan will work because we aren’t just printing money off and hoping for the best; we’re opening Excel, discussing, managing, and making everything transparent so the best decision is made. I’m glad the government is spending money, because I believe that it will lead to me being able to spend mine in the future on what I want, instead of what I need.
I’m not here to give finance advice – I’ll leave that to the experts. But I am noticing a trend amongst my friends and coworkers. We’ve all cut back on things that cost money that we used to do on a regular basis without thinking and are saving money as if it’s a precious commodity. Well, for many (and more each day) it is! I’ve been reading more and more in the news about middle-aged individuals losing their jobs and dipping into their 401(k) accounts early or draining their savings to make ends meet. Getting a job isn’t easy either right now, especially when I know people who have applied to dozens of jobs and if they get a response at all it is a rejection. Like many people, I’m planning for the worst and squirreling away anything I possibly can.
So why is the government implementing an economic stimulus package that entails spending nearly a TRILLION dollars instead of saving money?
Many conservatives on www.twitter.com frequently tweet about the stimulus package and how it “oddly” reminds them of the German attempt in the late 20s. I don’t agree. Even though the Obama administration in many cases isn’t putting in formal checks and balances to ensure that the money isn’t misappropriated or poorly handled, many Senators are doing what they can to increase transparency and oversight. Michael W. Brubaker (R-PA), for example, wants to create a nine-member panel in Pennsylvania made up of state officials to manage the economic stimulus money. His state alone is set to receive $10 billion of the money set-aside for state building. If his bill is passed, which hopefully it will be, this panel will help prevent corruption and boost the local economy within the state. However, PA is ahead of the senator and has created a website that will allow the public to monitor the spending.
One of the benefits of posting the spending online is the level of transparency it creates. The stimulus bill is something that the American people have heard about non-stop for the past several months. With the aid of the internet people have access to developing stories 24/7, letting those who are interested keep up-to-the-minute on the progress of governmental affairs, especially with www.CSPAN.com’s streaming feed to the House and Senate debates. This week some of the first expenditures from the stimulus package are happening, focusing mostly on information technology support and staff. Michael Carleton, Health and Human Services Department’s head officer, said, “There are provisions in the law that require the money in the Recovery Act to be subject to a higher level of transparency than is the convention.” Carleton thinks that these expenditures will help make that happen.
I like to compare the stimulus bill to Franklin Roosevelt’s New Deal, designed to create new jobs in the 1930s. Vast swaths of American infrastructure, schools, and even the Appalachian trial exist today because of that plan. States are spending wisely if they invest in IT first because in today’s society, information is the key to getting anything done. Without the necessary support of technology, the spending could in many cases go awry and unchecked. FDR focused on projects that kept the American public busy, while providing future generations with something free to enjoy when there is an economic hardship. We can still enjoy those trails today even though we are budgeting and that should make all of us happy. It makes me forget that I can’t see the latest movie, buy the newest computer, or eat out three times a week.
While it seems ridiculous to many people that the government is spending such tremendous quantities of money during a time when the general public has had to cut back, I think it’s necessary - as long as there is enough transparency with this act. It’s our money, we should see to it that it is properly spent on rebuilding our economy, eventually letting us spend our money as we wish again, hopefully leading us back into prosperity. Right now, the main reason we need the government to put money back into the public is that we can’t spend money to help other businesses out. As much as I would like to, I can’t go down the street to buy from the local farmer’s market; the huge grocery store chain is cheaper, and every penny counts. Businesses will benefit tremendously from the surge in money, especially those involved in government contracting. The more money the government spends on us, the more we’ll have to spend later, which will eventually boost everyone up, even those not involved in contracting who don't get it directly from the government.
The stimulus plan will work because we aren’t just printing money off and hoping for the best; we’re opening Excel, discussing, managing, and making everything transparent so the best decision is made. I’m glad the government is spending money, because I believe that it will lead to me being able to spend mine in the future on what I want, instead of what I need.
Thursday, February 26, 2009
What’s Up, Doc?
If you’ve been watching the news at all lately, you have probably noticed the trend towards discussing the finer points of the stimulus package. The Obama Administration has successfully pushed their plan through both the Senate and the House in order to pump more money in the declining US economy. Among the issues many federal employees are fearing is that with the passage of this package their jobs will be outsourced, as the Bush administration did in 2003.
President Obama has stated numerous times that he will not outsource federal jobs. The stimulus package, for instance, is pumping money into repairing government buildings and facilities, actions that are traditionally contracted out and not completed by federal employees anyway. With that in mind, now is a great time to be a government contractor! However, on the flip side, it is also a difficult time to be one. As stated in The Washington Post by Joe Davidson, “The stimulus package will generate more business for government contractors at a time when government contracting is coming under greater scrutiny.” This scrutiny, which all contractors must face, is due to the past ten years of abuse that was allowed during the last administration. It is inevitable, but is much worse for companies that have already encountered difficulties within the field.
But how will the Obama administration fix and prevent the abusive tactics that many contractors have implemented? On Tuesday, February 24, 2009, President Obama discussed how lawmakers will be implementing different procurement processes for government contracting. The specifics have not been stated yet, but there is talk of cutting back significantly on overpaying individuals and on greater monitoring of award decisions and amounts.
There is a bright side to this scrutiny, though. For instance, bigger names have a harder time winning contracts, especially the smaller ones. Small businesses will be favored throughout the bidding process even more. However, and I cannot stress this enough, it is critical that contractors are aware of their market and product prices. In many cases, the federal employee goes into the negotiations with a set price range that he is allowed to purchase within that we the contractors are unaware of. One must ensure their price is competitive; if your price is above what the government is asking, they’ll automatically disqualify you and move on to the other bids. If it is too high, you may not even be eligible to compete on future contracts!
Recently, Senator Carl Levin (D-Mich) proposed a bill that would require defense contracts to be reexamined if they are over the original cost estimate by 25% or more. Many large contracts can be recalculated as needs change and over time, but the government wants to crack down on excessive increases. The Department of Defense awards contracts based mostly on weaponry and technology; if the government is taking a stand against overspending on DoD contracts, then ones awarded in other departments are undoubtedly soon to be significantly be cut back as well.
The government generally decides the price range based on what they feel the material and labor costs should be. Usually, the federal employee assigned to the contract has appropriate estimates. The government wants contracts to be done easily and cost-efficiently, however, they understand that there needs to be a profit or small businesses won’t work with the government any more.
While the Obama administration is cracking down on the problems typically associated with federal contracting, there is nothing stating they will stop hiring contractors. In fact, time and again they have explicitly stated they want to hire MORE small businesses. If anything, the process might involve more paper work or red tape, but for the most part, contacting will continue. So long as the small business contractor follows the bid guidelines and offers competitive prices, there will be no shortage of contracts for the small business owner!
President Obama has stated numerous times that he will not outsource federal jobs. The stimulus package, for instance, is pumping money into repairing government buildings and facilities, actions that are traditionally contracted out and not completed by federal employees anyway. With that in mind, now is a great time to be a government contractor! However, on the flip side, it is also a difficult time to be one. As stated in The Washington Post by Joe Davidson, “The stimulus package will generate more business for government contractors at a time when government contracting is coming under greater scrutiny.” This scrutiny, which all contractors must face, is due to the past ten years of abuse that was allowed during the last administration. It is inevitable, but is much worse for companies that have already encountered difficulties within the field.
But how will the Obama administration fix and prevent the abusive tactics that many contractors have implemented? On Tuesday, February 24, 2009, President Obama discussed how lawmakers will be implementing different procurement processes for government contracting. The specifics have not been stated yet, but there is talk of cutting back significantly on overpaying individuals and on greater monitoring of award decisions and amounts.
There is a bright side to this scrutiny, though. For instance, bigger names have a harder time winning contracts, especially the smaller ones. Small businesses will be favored throughout the bidding process even more. However, and I cannot stress this enough, it is critical that contractors are aware of their market and product prices. In many cases, the federal employee goes into the negotiations with a set price range that he is allowed to purchase within that we the contractors are unaware of. One must ensure their price is competitive; if your price is above what the government is asking, they’ll automatically disqualify you and move on to the other bids. If it is too high, you may not even be eligible to compete on future contracts!
Recently, Senator Carl Levin (D-Mich) proposed a bill that would require defense contracts to be reexamined if they are over the original cost estimate by 25% or more. Many large contracts can be recalculated as needs change and over time, but the government wants to crack down on excessive increases. The Department of Defense awards contracts based mostly on weaponry and technology; if the government is taking a stand against overspending on DoD contracts, then ones awarded in other departments are undoubtedly soon to be significantly be cut back as well.
The government generally decides the price range based on what they feel the material and labor costs should be. Usually, the federal employee assigned to the contract has appropriate estimates. The government wants contracts to be done easily and cost-efficiently, however, they understand that there needs to be a profit or small businesses won’t work with the government any more.
While the Obama administration is cracking down on the problems typically associated with federal contracting, there is nothing stating they will stop hiring contractors. In fact, time and again they have explicitly stated they want to hire MORE small businesses. If anything, the process might involve more paper work or red tape, but for the most part, contacting will continue. So long as the small business contractor follows the bid guidelines and offers competitive prices, there will be no shortage of contracts for the small business owner!
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