The Government May Be Your Best Customer
The U.S. Government is the world’s largest buyer. All over America it is constantly ordering big quantities of machinery, equipment, supplies, and services. As a buyer, Uncle Sam is not very cost-conscience and tends to spend top dollar. Instead of taking the lowest bid or best supplier, government agencies may be required by law to give a fixed percentage of their orders to small businesses.
Certain government orders are “set aside” for small business. Bigger companies aren’t allowed to bid on them, so small companies are competing only among themselves for these contracts. Over the years, small business has won about one-fifth of the military’s total dollar awards. It got $7 billion worth in one recent year. In addition, small firms make hefty sales to the Nuclear Regulatory Commission, the Department of Agriculture, and other big agencies. Lumber is a good example. The SBA persuaded the Department of Agriculture’s Forest Service to set aside parts of the contracts for cutting federal timberland, and the little logging companies survive only through that program.
If you think you might be interested in government contracts, get in touch with the nearest Business Service Center of the General Services Administration. It will give you lists of items the GSA buys for all federal agencies. And it will sell you “The U.S. Government Purchasing and Sales Directory,” a useful guide to doing business with the government.
The SBA will provide you with lists of military bases, laboratories, and other government installations that could be customers for your particular kind of work. If you meet certain standards, the SBA will also mail statements to the buyers at these installations, telling them that you are now an approved vendor for certain items. In addition, some SBA offices have salespeople who will peddle your product or service to government agencies. And you don’t pay them any commission or fee.
Even if you don’t think of yourself as a potential government contractor, it’s not a bad idea to become listed with the SBA as a qualified source. It may bring you subcontracts from prime contractors who deal with the government. You can build up a good volume of work if you’re known to big companies who need your production facilities. Subcontracting kept a lot of little shops busy during business recessions when private orders dried up. You may be able to rent idle government-owned machine tools if your prime contractor sponsors you. Subcontracting also qualifies you for financial assistance from the SBA.