Small Business Matters

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Doing business with one of the largest purchasers of goods and services in the world - the U.S. Department of Defense (DoD) - can seem like a daunting business strategy for many small business owners. Many often mistakenly believe that only the "big guns" can really compete for DoD business.

The truth is that the government designates a significant amount of procurement contracts to small businesses each year. For example, in fiscal year 2009 (ending Sept 30, 2009) the Department of Defense set aside over 22% of its prime contracts to small business and over 37% of its sub-contracting opportunities (source). This doesn't even take into account the set asides given to small businesses owned by veterans, women, minorities and disadvantaged businesses.

That's a large chunk of change!

But whether you are selling a service, reselling a product, or marketing your own proprietary product to the federal government, the procurement process can be challenging for a small business to navigate.

Aside from treating defense contracting as a long term business strategy, there are many other considerations that you will need to navigate through and check off on your way to securing your share of what can be a very profitable line of business. Here are some resources from the government and small business expert communities that can help you get started.

Understanding Federal Government Contracting

Before you delve into the world of defense contracting, it's worth getting an understanding of government contracting in general. A good place to start is the government's Business.gov Web site for small businesses. Its Federal Contracting Guide can guide you through how to become a federal contractor, find business opportunities, and the rules and regulations that federal contractors need to follow.

Another excellent resource is this brief downloadable PDF from *OPEN Forum - *The Essentials: Securing a Share of Government Business - which summarizes best practices for selling to the government plus how you can use government resources, such as the Small Business Administration (SBA), to your advantage.

The Ins and Outs of Defense Contracting for Small Business

From registering to do business with the DoD to finding your target market to finding and securing contract opportunities, the DoD's Office of Small Business Programs (DoD OSBP) should be your one-stop source for everything you need to become a defense contractor or sub-contractor.

Check out the Guide to DoD Contracting Opportunities - A Step-by-Step Approach to the DoD Marketplace for easy-to-read information on how to establish yourself as a defense contractor.

If you know which defense agencies you wish to target, take advantage of the numerous small business offices and comprehensive Web sites - such as www.sellingtoarmy.info - maintained by at least 15 DoD agencies to help small businesses explore opportunities and resources.

Government Rules and Regulations that Impact Defense Contracting

While navigating the defense contracting maze presents its own challenges and opportunities, depending on the nature of your business you may also encounter regulatory practices that apply to the aerospace and defense industry.

For example, if you wish to pursue contracting opportunities that involve overseas deployments, such as Iraq or Afghanistan, you will need to familiarize yourself with the Defense Base Act, which provides workers' compensation protection to civilian employees working outside the U.S on U.S. military bases or under a contract with the U.S. government for public works or for national defense.

There are also restrictions on the sale of products grown or manufactured outside the U.S. as stipulated by the Berry Amendment.

More on these and other laws and regulations that govern aerospace and defense contracting here.

Security Clearances - Do I need One?

Whether you are a defense contractor or sub-contractor, you don't necessarily need a *security clearance.  However, having one can certainly open up more opportunities for your small business, including the option for working on a variety of contracts, in particular ones that involve cutting-edge technology programs and projects.

Read up on security clearances for government contractors including "Getting a Security in a Nutshell" on Business.gov here as well as this SBA information sheet: "Obtaining a security clearance for your 8(a) company and/or employees".

Additional Resources

• Doing Business with the Department of Defense: The Basics (DoD Office of Small Business Programs)
• *Five Tips for Finding Federal Contracting Opportunities (Allbusiness.com)
• SBA to Host 200 Events to Help Women, Veteran and Minority-owned Businesses Get Access to Informatio... (SBA Press Release)

*Note - Hyperlink directs reader to non-government Web site.

Message Edited by CaronBeesley on 08-20-2009 08:13 AM

Message Edited by CaronBeesley on 08-20-2009 08:20 AM

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I suggest getting involved with the local chamber of commerce in your town where a military base is present.  They usually have a military defense council of some sort whih are attended by military and DOD personnel.  Use every opportunity advertise your business and stay in front of your prospects.

Take into account military holidays - Memorial Day, Veterans Day, POW/MIA Remembrance day, etc.  Thank a Veteran for their service and it'll go a long way!

-Jeff Tomczak

USAF Honorably Discharged Veteran

<a href="http://www.sycflags.com">

Message Edited by NicoleD on 09-30-2009 10:59 AM