ReliAscent is a small business (as defined by the SBA). All of our clients are small businesses. The Small Business Administration’s Office of Advocacy has recently released statistics relative to small business that I think are encouraging to all of us small businesses. The overall statistic of interest to people in industry is the amount of government contracts being given to small business. The government wide objective is 23% of all contracts to go to small business. The report for FY 2013 shows that the overall government small business contract level at 23.9%, which meets the objective. What is a little misleading here is that not all agencies are above the objective. For instance, let’s look at 2 of the largest agencies in the government, the DoD and DoE. DoD is at 21% and DoE is at 5.71%. Both are below the goal. Other departments like Agriculture (at 54.88%) and Interior (at 59.16%) help make up the difference. It takes quite a few of the smaller agencies above the limit to make up a small difference in defense spending because the overall budget of the Defense Department is so large. Also, contracts in areas like the Commission on Civil Rights (at 100%), Commission of Fine Arts (at 100%) or the Agency for International Development (at 101.71%) probably don’t use any technical services. So a lot of the expenditures by the government in meeting the small business goal may be skewed to certain areas which mean not all industries (especially some of the technically oriented businesses) are going to receive 23% of the share in their area of expertise. Still, this is an achievement to reach the goal of 23%, which hasn’t happened in the past. The fact that 63% of the net new private-sector jobs have come from small business over the last several years is significant. 99.7% of the “employer firms” in this country are small businesses. From 2008 thru 2010 there were more small businesses that “died” than new firms created. That trend has changed and there were 800,000 new business creations in 2012 compared to 732,000 business deaths in 2012 (the most current year data is available). California leads, by far, all states in the creation of new small businesses. For 2013, California recorded 73,900 new businesses, more than twice the amount of the next state (Florida with 33,000). California also leads the country in small business employment with over 6 million employees in small businesses (Texas is second with over 4 million). What is encouraging to me is that the trend is up for government contracts going to small business. The number of new small businesses is again growing and employment from small business is growing. These are all solid signs of an economic recovery. Small business is definitely the driver in America’s economy and we are seeing the Federal Government recognize this. Yes, the way in which some of these statistics are measured is debatable but the fact of improvement cannot be lost.Read More
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I attended a briefing yesterday at our local NDIA Small Business meeting. The briefing was conducted by Doug Smith from the Air Force’s Space, C2 and Surveillance Division. Doug gave a very comprehensive overview of the Space, C2 and Surveillance division, a good presentation. One thing that he touched on that was news to me and a relative surprise was relative to the Defense Department’s Comprehensive Small Business Subcontracting Plan. I was not in tune with this test program for some reason and certainly not in tune with the recent implications to both large and small businesses from the expiration of the program.
First a little background. In March of 1998, the DoD issued a memorandum modifying the DFARS to incorporate a “test program” for a comprehensive Small Business Subcontracting Plan. This action was a result of a DFARS Case 97-D323 which allowed Primes to submit and negotiate a plant, division or corporate wide subcontracting plan for each contract instead of a separate plan for the individual contract. The impact to small business was significant. Since a large prime may have many contracts, some of them for less technical tasks like janitorial, construction or materials supply, they could fill their small business procurement goals on these other contracts and some larger contracts of interest to small business would not get much traction. This “test program” was originally scheduled to last from October of 1990 thru December of 2000. The program was extended several times in the annual defense authorization bills. The most recent extension came in the Defense Reauthorization Act of 2012 that extended the test program thru December 31, 2014. What is significant is that the latest Defense Reauthorization Act did not extend the test program and it will expire on December 31, 2014 (a little over 3 months from now).Read More
I attended a briefing this week by the Director of Small Business with the Air Force Space Command. It was very enlightening to see the status of small business contracting within this section of the Air Force. Yes, the budget cuts and sequestration has reduced the amount of money being spent in this sector. But the good news is that the small business goals are being met in a lot of areas despite the reduction in dollars (on a percentage basis). The Air Force is using some creative tactics to insure that small business has an opportunity and that the small business goals can be met. I think that the Air Force realizes that small business is the best hope for job growth as well as the best chance for new innovations.