A common complaint among owners of small and disadvantaged (especially African-American owned) businesses is that “We can’t get our fair share of government contracts.” Allegedly, government purchasing agents respond that they can’t find enough “qualified” businesses to satisfy set-aside directives for purchasing from businesses having relevant preferences. For those wanting to sell to the government, though, do be careful. This business may be a helpful bootstrap, but it should not become the whole boot.
Registration to establish qualification for preferences and set-asides with purchasing authorities of city, county, state and federal governments can be perceived, at best, as a complex, time consuming and expensive process, and, at worst, outright scary. Despite encouragement to simplify procedures from regulations such as the Paperwork Reduction Act, the volume and nature of information requested is often intimidating. Forms for each agency are different, and qualification criteria are not necessarily the same. The situation is very frustrating.
There is someone, though, who is developing a solution to benefit all parties. James W. (JW) Stokes, Jr., Chairman and CEO of J.W. Holding Group and Associates, Inc., (Porter IN) has for the last 10 years been recruiting other minority businesses to form an alliance capable of “playing with the big boys.” In 1996 JW consulted with senior procurement officers from the Department of Defense to improve their new “Prime Vendor” program. Now a significant amount of military procurement activities are being outsourced to private sector distributors. Using that “Prime Vendor” strategy J.W Holding administered a contract worth more than $50 million and covering more than 18 months to provide food products in support of U.S. troops in Bosnia. JW and J.W. Holding have won several awards for this work.
To compete with large, “white-owned” distributor companies JW has formed a “virtual” organization composed mostly of relatively small companies which qualify for preferences (as J.W. Holding itself does) under federal and many state and local government procurement guidelines. J.W. Holding and state affiliate companies respond to bid requests and RFP’s (requests for proposals). J.W. Holding also qualifies sources. (And, more are still being sought.) An affiliate, eQuality Seal Corporation, manages warehousing and transport activities. Qualified sources (at least 51% being small and disadvantaged companies) provide the products and transportation. JW’s Operation Pride offers administrative support services (i.e., accounting and human resources help) to members of the team. The “virtual” organization provides the opportunity for the owners and employees of each small business to profit from the fruits of their own labor. For customers (whether government or private sector) there are no hidden costs.