Does Contracting with Small Businesses Provide a Cost Savings to the Federal Government?

Does Contracting with Small Businesses Provide a Cost Savings to the Federal Government?
Author: Cassandra McGee Stuart
Publisher:
Total Pages: 96
Release: 2019
Genre:
ISBN:
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The U.S. government spends hundreds of billions of dollars annually in contracting, which includes a 23% small business goal (GAO, 2017a) (SBA, 2018b). There is minimal existing literature about the cost to the government to use small businesses versus large businesses in contracting. Gansler, Lucysyn, and Burdg (2015) stated that small businesses are costlier to the government due to higher labor rates, while Richwine (2017) indicated that overall, small businesses charge lower rates than large businesses in certain categories. The theoretical basis for this study is Wernerfelt’s (1984) resource-based view (RBV), which stated that the assets of a firm are its resources, such as its available technology, knowledge base, and other attributes. This research compared 382 labor categories of large and small businesses taken from available government contracts data. A Wilcoxon Signed-Rank test showed that the labor costs of small businesses are significantly less expensive than large businesses. An online survey of small business owners also showed that the major hurdles faced are due to the paperwork required to respond to bids and a perceived lack of communication from government contracting officials, among other issues. While the government stands to save money by increasing contracting with small businesses potentially, work must also be done to simplify the contracting process.

New Entrants and Small Business Graduation in the Market for Federal Contracts

New Entrants and Small Business Graduation in the Market for Federal Contracts
Author: Andrew P. Hunter
Publisher: Rowman & Littlefield
Total Pages: 78
Release: 2019-01-04
Genre: Political Science
ISBN: 1442280921
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This paper garners information crucial to understanding business growth for new entrants and small businesses who contract with the federal government by utilizing publicly available contracting data from the Federal Procurement Data System (FPDS) to track new entrants from 2001-2016. This information is then used to evaluate entrances, exits, and status changes among federal vendors with the purpose of comparing challenges faced by small businesses with those of larger ones. Measuring market trends over time and in multiple sectors shows how the challenges facing small businesses, such as market barriers to entry and imperfect competition, keep them from growing. The final results compare the survival rates between small and non-small new entrants contracting with the federal government and analyze the graduation rates for those small new entrants who grew in size during the observation period and survived after ten years. The study finds that around 40 percent of new entrants exit the market for federal contracts after three years, around 50-60 percent after five years, and only about one-fifth of new entrants remain in the federal contracting arena in the final year of observation. Across the six samples studied, thegraduation rates of small businesses consistently decrease.

Analyzing Information on Women-Owned Small Businesses in Federal Contracting

Analyzing Information on Women-Owned Small Businesses in Federal Contracting
Author: National Research Council
Publisher: National Academies Press
Total Pages: 110
Release: 2005-03-28
Genre: Political Science
ISBN: 0309181569
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It has been clear for at least 50 years the disadvantages that small businesses face in competing for U.S. government contracts. The Small Business Act of 1953 created the Small Business Administration (SBA), an independent agency in the executive branch that counsels and assists specific types of small businesses including firms owned by minorities and other socially and economically disadvantaged individuals and firms owned by women. Women-owned small businesses, however, are underrepresented or substantially underrepresented in some industries. In 2002, the SBA Office of Federal Contract Assistance for Women Business Owners (CAWBO) organized a draft study containing a preliminary set of approximations of the representation of women-owned small businesses in federal prime contracts over $25,000 by industry. Because of the past legal challenges to race- and gender-conscious contracting programs at the federal and local levels, the SBA asked the Committee on National Statistics of the National Academies to conduct an independent review of relevant data and estimation methods prior to finalizing the CAWBO study. The Steering Committee on Women-Owned Small Businesses in Federal Contracting was created and charged with holding a workshop to discuss topics including the accuracy of data and methods to estimate the use of women-owned small businesses in federal contracting and the definition of "underrepresentation" and "substantial underrepresentation" in designating industries for which preferential contracting programs might be warranted. Analyzing Information on Women-Owned Small Businesses in Federal Contracting presents the committee's report as well as the recommendations that committees have made.

Federal Contracting and Subcontracting with Small Businesses

Federal Contracting and Subcontracting with Small Businesses
Author: Kate Manuel
Publisher: CreateSpace
Total Pages: 38
Release: 2014-10-31
Genre:
ISBN: 9781503009028
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Congress has generally broad authority to impose requirements upon the federal procurement process (i.e., the process whereby agencies acquire supplies and services from other entities for the agency's direct benefit or use). One of the many ways in which Congress has exercised this authority is by enacting measures that encourage agencies to contract and subcontract with "small businesses." For purposes of federal procurement law, the term small business generally denotes a business that (1) is independently owned and operated, (2) is not dominant in its field of operations, and (3) has fewer employees or annual receipts than the standards that the Small Business Administration (SBA) has established for the industries in which the business operates.

Winning Government Contracts

Winning Government Contracts
Author: Malcolm Parvey
Publisher: Red Wheel/Weiser
Total Pages: 240
Release: 2008-02-15
Genre: Business & Economics
ISBN: 1601637861
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The United States federal government is the biggest customer in the world. It buys 20% of all the services and products produced in the U.S. But of the 22 million registered U.S. companies, fewer than 2% of them seek out this market. Why? Because small business owners don’t know where and how to get these contracts. Winning Government Contracts will change that. It begins at the beginning, assuming no prior knowledge of the government marketplace and its sometimes complicated terminology. Written in a clear, easy-to-understand language by experienced sales and marketing professionals, this book takes you through the registration and bidding process step-by-step. All the terms used in government contracts are explained in plain English. Winning Government Contracts shows you where to find the sales opportunities on the Internet, then guides you through every step in your quote, whether submitted electronically or on paper—explaining the jargon and outlining the exact information that needs to be entered. You will learn how to download drawings and specifications, understand shipping and packaging requirements, and find out how much the government is currently paying for an item before you submit an offer. The book also highlights areas where beginners need to be particularly careful, such as remembering to include shipping costs when you offer the government your best price! After the offer has been submitted, the book explains how to find the results of the bid—which company was awarded the contract and its price, as well as the names and prices of all the other bidders. Included is the government’s system of inspection, acceptance, invoicing, and payments, as well as the specific requirements for service contracts such as Statements of Work, Wage Determinations, and Technical Proposals. Whatever your business, the federal government is a marketplace you can enter. Winning Government Contracts will you show the way.