Funding Opportunities for Small Businesses Essay

Analyze funding opportunities for small businesses, including the role of the Small Business Administration (SBA). Then, evaluate the effectiveness of these funding opportunities in light of the current economy. In this time of economic challenges, suggest two ways that the SBA might be of assistance to your small business. Explain how you would request this assistance. Small businesses are leaders in innovation and drivers of the economy. Small businesses hold more patents than all of the nation’s universities and largest corporations combined, and create two thirds of all private sector jobs, employing half of all working Americans. The Federal government is the largest buyer in the world, spending over $500 billion each year. For the Federal government, contracting with small businesses is common sense. Small businesses get the revenue they need to create jobs and drive the economy forward, and federal agencies get the creativity, innovation, and technical expertise of small businesses to help accomplish their mission. When small businesses are excluded from federal contracts, the Federal government, American taxpayers and the nation’s economy lose out. Over 30 years ago, Congress set a goal of having a certain portion of all federal contracting dollars go to small businesses and established sub-goals for small businesses owned by women, socially and economically disadvantaged individuals, and service-disabled veterans of the Armed Forces, and for small businesses in Historically Underutilized Business Zones (HUBZones). The current government-wide goal for small businesses’ share of contracting dollars is 23%. Every year since 2006, the Federal government has missed the 23% small business goal and all but one of the sub-goals; the 2009 shortfall was greater than $4 billion. Removing barriers to federal contracting and increasing access for small businesses will go a long way in closing this gap. Over the past 18 months, the Federal government has taken important steps to increase opportunities for small businesses, from creating new online training for small businesses to issuing a proposed rule to create set-asides for women-owned small businesses in industries in which women are underrepresented. Last summer, the Department of Commerce and the Small Business Administration (SBA) co-led a government-wide effort that involved over 300 matchmaking and training events across the country to ensure American Recovery and Reinvestment Act (Recovery Act) contracts were awarded to a broad array of small businesses. With over 31% of Recovery Act contracting dollars going to small businesses, this initiative 2 Report on Small Business Federal Contracting Opportunities proved that, with committed leadership and the right tools, the government has the ability to meet – and exceed – the 23% small business contracting goal. Stronger rules. Insufficient guidance and gaps in current policy hamper the use of tools that provide contracting opportunities for small businesses. The Task Force recommends actions to strengthen and update policies where they are weak or outdated and develop policies where they are lacking. A better equipped, more informed and more accountable acquisition workforce. A lack of knowledge and agency accountability inhibits the government’s ability to meet and exceed small business procurement goals on an ongoing basis. The Task Force recommends increasing the knowledge base and efficiency level of the procurement workforce and providing appropriate incentives and accountability for agencies to meet small business goals. Improved outreach and better use of technology and data. The current data systems in the federal acquisition environment are cumbersome and not user friendly for many small businesses, especially for those who are new to the systems and trying to â€Å"get the ir foot in the door.† The Task Force recommends a one-stop shop for easier access to procurement information, as well as greater focus on the accuracy of procurement data. In the following report, the Task Force outlines the key recommendations and actions needed to meet these priority objectives. The Task Force will report to the President by December 30, 2010, on progress in the implementation of the recommendations in this report. SBA, Commerce, OMB, and the other members of the Task Force are committed to increasing opportunities for small businesses. Small businesses, including businesses owned by women, socially and economically disadvantaged individuals, and service-disabled veterans of our Armed Forces, must be able to participate in the Nation’s economic recovery. They must be able to compete effectively for federal contracts so our agencies, taxpayers, and the broader economy can reap the full benefit of their talents and services. 3 Report on Small Business Federal Contracting Opportunit ies REPORT INTERAGENCY TASK FORCE ON FEDERAL CONTRACTING OPPORTUNITIES FOR SMALL BUSINESSES Small businesses are leaders in innovation and the drivers of the economy– holding more patents than all of America’s universities and largest corporations combined, creating two thirds of all private sector jobs and employing half of all working Americans. The Federal government is the largest buyer in the world, spending over $500 billion each year. For the Federal government, contracting with small businesses is common sense. Small businesses get the revenue they need to create jobs and drive the economy forward, and federal agencies get the creativity, innovation, and technical expertise of small businesses to help accomplish their mission. When small businesses are excluded from federal contracts, agencies, small businesses, taxpayers and the broader economy lose out. For more than half a century, it has been the policy of the Federal government to provide â€Å"maximum practicable opportunity† for small businesses to participate in federal contracts. To achieve this objective, Congress established an aspirational goal in 1978 for the percentage of annual prime contract spending that should be awarded to small businesses each year. Congress later set the government-wide goal at 23% and created a set of sub-goals to support the participation of special segments of the small business community: small disadvantaged businesses (5%), women-owned small businesses (5%), service-disabled-veteran-owned small businesses (3%), and small businesses in Historically Underutilized Business Zones (HUBZones) (3%). These goals help ensure that a diverse set of small businesses share in the jobs and opportunities created by federal contracting. Since 2006, the Federal government has missed the 23% small business contracting goal and all but one of the sub-goals; the 2009 shortfall for the small business goal was more than $4 billion. This gap must be closed. The barriers to entry for small businesses are numerous: weak policies and rules that limit the effectiveness of tools that are supposed to facilitate contracting opportunities; inadequate workforce training to help contracting officers, small business advocates, and program offices understand how to successfully use contracting tools; and a lack of coordination among and accessibility to agency training and outreach events designed to help small businesses navigate the contracting system. Action must be taken to remove these barriers and ensure small businesses get access to federal contracts. A number of important steps have been taken or are underway to remove barriers and open more doors for small businesses in the federal marketplace. †¢ Later this year, the Small Business Administration (SBA) will implement a new rule on contracting with women-owned small businesses. For the first time, contracting officers will have a tool to set aside contracting opportunities for women-owned small businesses in 4 Report on Small Business Federal Contracting Opportunities industries where women are under-represented. This is a critical step toward increasing opportunities for women-owned small businesses. †¢ This year SBA conducted the first comprehensive review of regulations in ten years governing its 8(a) business development program for disadvantaged small businesses to ensure the program’s effectiveness and increase 8(a) firms’ capacity to obtain contracts. †¢ A series of new online training courses have been rolled out (www.sba.gov/training) to walk small business owners through the steps involved in becoming a government contractor. These tools help small businesses navigate the process. †¢ SBA is conducting a comprehensive review of its size standards for small businesses – the first in 25 years – to ensure they accurately reflect the state of each industry. †¢ SBA is working actively to identify and eliminate waste, fraud, and abuse in its business programs through a strengthened certification, eligibility and enforcement process.