We are pleased to announce yet another milestone in the success of our client, CEEPCO Contracting, LLC. CEO Harold Charles’s achievements were recently recognized by the US Small Business Administration and by Digicell. CEEPCO demonstrates how consistent, focused execution on a strategic plan for growth nets solid, measurable results–particularly in federal markets. WCC is proud to have been part of CEEPCO’s strategic development team and looks forward to assisting the company in its continued march forward.
This post is the final installment in a series on understanding government contracting and maximizing opportunities to participate in government contracts.
In order to explore which niche markets would be available for small businesses, it is important to understand how the U.S. government views its procurement activities. Generally, the government uses North American Industrial Classification System (NAICS) codes to classify and group its purchasing activity. Using information gathered about these classification codes, we can identify the products and services where small businesses should concentrate their efforts for the highest probability areas for successful procurements.
Over the last ten years, the sectors with the most spending are sectors 31-33 (manufacturing, $1.61 trillion) and sector 54 (professional, scientific, and technical services, $1.27 trillion). This gives us some preliminary directions in which to investigate as to where small businesses should concentrate resources. However, this information can be misleading for small businesses searching for opportunities as some have very large single contract values.
Small businesses are likely to have more success competing for contracts in areas that have higher numbers of contracts overall. It is assumed that the more contracts issued within an NAICS code, the more likely that the average contract value will be smaller and within the price/cost range of a small business to bid on and provide that service. For example, over the last decade, the most government contracts were executed under NAICS code 424490, “other grocery and related products merchant wholesalers,” at approximately 170,000 contracts. A table with the top industries in terms of total number of government contracts can be found below.
|NAICS||NAICS Description||Number of Contracts||% of Total No. of Contracts||Cumulative % of Total No. of Contracts|
|424490||OTHER GROCERY AND RELATED PRODUCTS MERCHANT WHOLESALERS||171316||15.21%|
|424210||DRUGS AND DRUGGISTS’ SUNDRIES MERCHANT WHOLESALERS||131551||11.68%||26.89%|
|336413||OTHER AIRCRAFT PARTS AND AUXILIARY EQUIPMENT MANUFACTURING||70785||6.28%||40.79%|
|236220||COMMERCIAL AND INSTITUTIONAL BUILDING CONSTRUCTION||45037||4.00%||44.79%|
|541519||OTHER COMPUTER RELATED SERVICES||30064||2.67%||47.46%|
|517110||WIRED TELECOMMUNICATIONS CARRIERS||28400||2.52%||49.98%|
|541712||RESEARCH AND DEVELOPMENT IN THE PHYSICAL, ENGINEERING, AND LIFE SCIENCES (EXCEPT BIOTECHNOLOGY)||26598||2.36%||52.34%|
As can be seen, more than half of all government contracts have been executed within only 8 industries within the past 10 years. This means that small businesses are more likely to win contracts in these areas as the annual dollar amounts of the contracts will be lower (usually less than $500k). The total contract may last for 3 to 5 years, having a total value of approximately $1.5 to $2.5M.
Teaming or Selling to Other Companies to Establish a Presence in the Market
After careful evaluation of its alternatives, a small business can improve its procurement opportunities by seeking teaming and sub-contracting opportunities with established government contractors.
Teaming and subcontracting offers many advantages, among them expanding in areas already covered by GWACs and MACs. This provides an opportunity for the small business to build on past performance and experience under US government subcontracts and provides access to small business set-asides.
Most contractors are already used to teaming and subcontracting for competing for or performing government contracts. As with any other company company, they will look for companies that add value to them through technology, price, and service competitiveness.
Carol O’Riordan and Pam Bethel, two of our awesome Directors will be attending next week’s DMBE Conference on creating more access to business opportunities for small business. We are excited!
Brought to SWaM and DBE Firms, The Access to Opportunity Conference: Creating a Cornerstone for Change is been organized by the Virginia Department of Minority Business Enterprise with the City of Hampton and Hampton University. For one day, you will have to will:
- Talk to representatives from regional government agencies and businesses
- Learn how to bid for state and local government contracts
- Discover strategies for success and business growth in 2013
The Conference next Tuesday, March 26th from 8 am to 5 pm at Hampton University in Hampton, Virginia. If you are looking to get in contact with potential partners and potential buyers, this is going to be the place to be. Thanks to DMBE and its partners, attendees will have the opportunity to attend training session with VDOT, VASCUPP and be part of Business Matchmaking sessions based on their specialties.
For those businesses trying to access capital, there will be numerous bank representatives there to speak with you and help better position your company.
Admission is only $50 and you need to register ahead, so don’t wait and visit http://www.dmbe.virginia.gov to fill out the registration form.
See you There!