The Positive Impact Of Government Contracting For Small Businesses July 30, 2018July 3, 2018 by admin The Positive Impact Of Government Contracting For Small Businesses Small businesses lead in creativity and innovations and employ a huge number of the working population in the US. The federal government recognizes the impact of small business on the country’s economy. It is the reason why spirited efforts have been made to encourage small business to apply for government contracts. The US government spends over five hundred billion dollars each year, the biggest in the world. For the government, contracting with small businesses makes economic sense and five percent of the spending is allocated for small businesses. It is a win-win situation where the small businesses get revenues to create employment that drives the economy forward while government through different agencies and departments get creativity and innovations to accomplish various missions. More than three decades ago, the Congress decided to set a portion of Government contracting for small businesses. Some of the targeted businesses included those owned by women, armed forces veterans and socially and economically disadvantaged individuals. Although the program has benefited millions of individuals, since 2006, the government has failed to achieve considerable collaboration with small businesses. Eliminating barriers is the only way of increasing the chances of small businesses accessing federal contract. In the recent past, the federal government has made effort to increase opportunities for small businesses. The government has introduced online training for individuals interested in contracting with the government. For instance, last summer, the Department of Commerce collaborated with Small Business Administration (SBA) on a wide effort of sensitizing and training to ensure small businesses are awarded federal contract. Furthermore, the government has put more focus on women-owned small businesses especially in industries where women are misrepresented. Benefits to Small Businesses Federal Acquisition Regulation (FAR) requires contracting officers in government to set aside certain funds for contracting small businesses at fair market prices. Initially, government contracting involved the cost of contract performance. However, in 2016, Small Business Administration made several changes in government contracting requirements mainly focusing on total payments made to the contracting business as opposed cost of performance originally used. Business Accounting: 7 Accounting Tips for Small Business Additionally, the revised regulations allowed small businesses to use work performed by similar entities as opposed to work performed by SBC. This regulation helps to determine compliance with the limitation on contracting. Apart from setting the necessary regulations, SBA also provides various mentorship programs. For instance, the mentor-protégé program is aimed at developing strong firms through development assistance to successfully compete for government contracts. In 2016, SBA made several changes into the mentorship program where large business are required to provide assistance to small business for instance management and technical assistance, trade education etc. On the part of the small business, complying with the necessary requirements and the terms and conditions of the contract can provide long-term stability. This is due to several reasons. Firstly, the government is reliable in their payments compared to other partners. Additionally, the government’s spending history on small business is readily available and can be used to find past similar engagements. Finally, the government is involved with numerous agencies and departments, therefore providing limitless opportunities. Christopher is an author who is passionate about helping local communities and supporting small businesses while working with the Cherokee Nation for small business administration government contracts in Oklahoma. 10 Best CRM Software for Small Business in 2018 Leave a Comment Cancel replyCommentName Email Website Notify me of follow-up comments by email. Notify me of new posts by email.