Protecting Our Homeland...and Making Money
Get a piece of the government pie by finding out if the products or services your business sells might be needed by the Homeland Security effort.
It's official--Congress has budgeted more than $30 billion for the nationwide Homeland Security effort, and actual spending over the next few years may well be more than 10 times that. Given that this is the federal government we're talking about, a lot of that money will be earmarked for small businesses (the definition varies from agency to agency) and enterprises owned by women, minorities, veterans and the disabled. If you fall into one of those categories and think you have a product or service that will advance the Homeland Security program, how do you let the government know you are out there?
Peter Provenzano, CEO of SupplyCore Inc., a Rockford, Illinois-based supplier of facility maintenance items for the Defense Department (everything from heating and air conditioning equipment to the wire fencing laid around military bases), is looking at his entire product line to see if there might be Homeland Security applications. According to Provenzano, the first step in finding out if your products or services qualify for the Homeland Security budget is to contact your local Procurement Technical Assistance Center, or PTAC (pronounced "PEE-tack"). PTACs, which are sponsored by the U.S. Defense Department in co-operation with state and local chambers of commerce, provide free advice and counseling to small businesses in all aspects of doing business with the Defense Department and other involved Homeland Security agencies. To find the PTAC nearest you, click on www.sellingtothegovernment.net.
John DiGiacomo, the director of the PTAC in Rockford, Illinois, and the co-author (with James Kleckner) of Winning Government Contracts for Your Small Business ($24.95; available at www.wingovcon.com), says that PTACs "were designed to make sure that the government would never again have to buy $100 hammers or $500 toilet seats because there weren't enough companies bidding for the contract."
According to DiGiacomo, the PTAC program is designed to enable small businesses, particularly those owned by women, minorities, the disabled and veterans, to sell their products and services to the government. "A lot of people are afraid of doing business with the government because they think it's going to be complicated, difficult, and not very profitable," says DiGiacomo, "but they shouldn't be." Last year, the government wrote about 10 million contracts for goods and services, and 95 percent of those were for amounts less than $100,000. Asks DiGiacomo: "Who better to get those contracts than small businesses?"
When calling a PTAC, you'll be asked to describe your products and services, and then be assigned to a specialist who understands your industry. The PTAC specialist will then (without charge) help you identify which of the 1,200-plus federal government agencies will be most interested in buying your products and services, and will help you prepare all of the necessary paperwork.
DiGiacomo admits that the process is not a walk in the park. "It's a lot harder for start-ups and homebased businesses to do business with the government; there are a lot of new restrictions to ensure that only 'real businesses' will apply for government contracts. For example, if you want to sell information technology services to the government, you have to have been in business for at least two years." Still, DiGiacomo feels that small businesses with potentially useful Homeland Security products and services won't know unless they contact their local PTAC.
Once you become a Homeland Security contractor, you have to be prepared to comply with some fairly stringent compliance rules. For example, says Provenzano, "our contracts require us to maintain a 'surge capability.' We have to be able to supply twice the normal demand in case of an emergency, and the government has been aggressively testing that since September 11. They'll call us with 'make believe' requisitions for a lot of materials at such-and-such a place, date and time, and we have to show that we can fulfill and ship the order, although they inform you up front that it's 'just a test.' Still, it puts a strain on our supply chains, and the government grades us on our performance. If we slip up, we may lose the contract."
Isn't there a risk, though, that having to jump through hoops to meet a government emergency demand will cause you to default on other contracts with private-sector customers? "Not really," says Provenzano. "Yes, there could be a short delay in processing other customers' orders, but nothing that would be protracted, because we use just-in-time inventory and would just add more resources to make everyone as happy as possible. Most of our customers would understand, and believe me, they want us to put Uncle Sam first."
One more thing: The toughest part of getting the Homeland Security program up and running will likely be getting smaller communities (those with fewer than 1 million residents) linked into the system. AllianceAmerica is a nonprofit organization that was recently formed to provide technology solutions for municipalities, counties and small cities that don't have the budgets or the high-tech staffs to solve their post-9/11 security problems. The AllianceAmerica organizers are looking to buy or license computer or communications technology products and services that will help emergency services (such as water, hospitals and transportation) in smaller communities better coordinate their responses to security threats.
Cliff Ennico is host of the PBS television series MoneyHunt and a leading expert on managing growing companies. His advice for small businesses regularly appears on the "Protecting Your Business" channel on the Small Business Television Network at www.sbtv.com. E-mail him at firstname.lastname@example.org.
Cliff Ennico is a syndicated columnist and author of several books on small business, including Small Business Survival Guide and The eBay Business Answer Book. This column is no substitute for legal, tax or financial advice, which can be furnished only by a qualified professional licensed in your state.