Benefits of Federal Assistance to Small and Disadvantaged Businesses

For defense and federal agencies, national security efforts, and agency missions, SDB are important to delivering agile innovation and localized service.

FREMONT, CA: With new SDB contracting goals, the current administration is continuing the federal government's longstanding commitment to small and disadvantaged businesses (SDB). This is welcome news for small business owners who have faced significant challenges during the pandemic's volatile economic environment. Partnerships with SDB support racial equity and socioeconomically disadvantaged businesses, but there is another reason for federal entities to emphasize such partnerships: It makes good business sense.

Defense and federal agencies, national security efforts, and agency missions rely on SDB for agile innovation and localized service. For these initiatives to be successful, agencies need proven tools and innovations.

Leveraging construction and real property projects: To meet the mission needs of federal agencies, it is critical to nurture the small business pipeline, especially in the construction sector, which continues to experience an uncertain rebound amid supply chain challenges. For the last four years, the federal government has been undertaking USD 15-17 billion worth of real property maintenance, repair, and alteration each year. Facilities construction and services are an ideal entry point for small businesses entering the federal market since they are accessible to emergent firms. These businesses may be unable to get this work due to contractual and operational constraints.

Reconciling SDB support and category management: It has been a longstanding goal of federal contracting offices to optimize expenditures by consolidating them under category management principles to deliver more for less. Many believe those practices are at odds with SDB support, and they can indeed be. Consolidating work requirements correctly - into long-term multi-project contracts that small businesses can handle - can result in a small business growth engine.

SDBs are freed from constant bidding cycles with this method of category management. While many small businesses are recovering from the pandemic, this program builds much-needed execution capacity.

Training and technology enablement for SDB: A few challenges remain before SDB execution of job order contracting (JOC), and sole-source Mini-JOC can be fully realized. Evaluating a large set of unit prices and developing coefficients can be challenging, and the government must fully know the pricing to negotiate a fair and reasonable rate. A large contract can require a large data, software, and training investment, which can drain a company's cash flow. SDB can make JOC more accessible through turnkey, consumption-based JOC support systems; with training, they can better understand it and participate in these programs. The government can pilot these programs with a very low level of risk. To ensure success for all parties, the JOC consultant plays a key role in coaching the SDB.

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