Doing Business in L.A. (part 2): Small Business

by Tony Chavira

If we consider small businesses to be those with 100 employees or less, then most Americans are working in small businesses. But sometimes when you hear politicians talking about the small business community it almost seems farcical. Even if they believe deep down that small businesses are the rhetorical backbone of America or the engines that drive the economy forward, most of the time those phrases are only used to make voters happy. From a political mindset, small business owners appear to be the kind of people who are achieving the American dream. They’re making it on their own: if they do their jobs well and work themselves to the bone, they will someday become the owners of billion-dollar mega-conglomerates. Just like the gigantic corporate entities they seek to outbid.

Until then, they’re still small businesses, and in most cases make less than $500,000 annually. They may do a fantastic job at whatever their trade is, but they’re stretched for time. Probably don’t have enough to properly market their services or goods, search for requests for proposals from the government, or, in a lot of cases, conduct day-to-day managerial operations. Small business owners are simply too busy trying to make money doing what they love. Everything else just stresses them out.

With this in mind, the government created tons of incentives and certifications for small business owners to take advantage of when bidding on government jobs, in order to make things easier on them or give them a slight advantage in the bidding process. For example, most government agencies will tell you that there’s a quota for what percentage of their work has to go to small businesses, disadvantaged businesses, or micro-businesses. They also might have a quota for women-owned businesses, minority-owned businesses, and veteran-owned businesses. These certification processes are meant to help small business owners compete against large, scary super-corporations for work, and when projects are less than $100,000, it’s safe to say that a small business has a real chance of getting the job. Placing them fulfills the agency’s quota and makes the government procurement officers look like they’re doing their jobs. Politicians are happy and government agents are proud when they all refer to it later.

But when small businesses are already pressed for time to complete work and are still required to fill out the amount of paperwork governments require from companies that can afford to have accounting divisions, when exactly are these small business owners going to find the time to apply for these certifications? When will the small business owner have the resources to spend time filling out the complex and detailed forms required to get on government databases? How many times can a small business owner fill out a government request for proposals? Obviously some people get it done. It may take them months, but they’re determined enough to make it work, even if the fees may not be what they expected. It should work for you too, right?

The problem is that the government isn’t structured to give large sums of money to small businesses, especially since the average quota most agencies have for working with them is about 5%. If you had to put “ease of getting work” on a scale, getting government work would be somewhere between “difficult” and “completely, impossibly ridiculous” for most small businesses. The reason is simple: no two agencies procure alike. Each has completely different requirements, completely different motivations, and completely different internal structures for attaining business.

Still, these three things wouldn’t be so bad on their own, were it not for the fact that each government agency has its own database for vendors. This means that when you want to do work with the City of Los Angeles, you are going to have to sign up to be one of their vendors, and then apply for your certifications through their system. But if you need to work with the county of Los Angeles (even if the work’s also in the city of Los Angeles and you’re already working with the city government), you need to sign up for the county database and re-apply for all of the same certifications. And if you want to get work through the state of California, you need to apply to their database and for their certifications. Same with the federal government. Oh, and these databases are inconsistently managed, on both private and public websites. Oh, and government agencies that were specifically created to purchase goods and services from businesses (like the GSA) are completely inconsistent with how the advertise and receive information for jobs.

This may all be overly complicated, and it may also create a lot of extra paperwork, bureaucracy and government inefficiency (especially since there are a ridiculous amount of government employees whose jobs are just to check your certifications), but these things are problems that can be remedied. What makes this whole process so transparently full of shit is that not everyone has to do it. As unfair as the world already seems, large and handsomely-paid businesses don’t really have to take part in any of database mumbo jumbo. They simply need to pay off a politician to present their renderings, and (after a phony bidding process) are ceremoniously handed large projects. Maybe this is reflection of the level of comfort we Americans have with giving more money to those who already have a lot. (Like how we like to try and keep the wealthy from paying taxes.)

Let’s just assume that this cannot be changed: we want to give money to rich people, and nothing can be done about it. And let’s just say, for the sake of argument, that we’re fine with that. Even if we completely ignore the unfairness and greediness of the big business machine, government agencies should not be completely misrepresenting the process of getting work by claiming to be “business friendly.” If you’re forcing those with limited resources to waste hours of their lives filling out your forms, you are not business-friendly. If you have your own non-integrated system for vendors to register and apply for certifications and work, the very fact that it’s separate from other systems means that you are not business-friendly. Sorry.

There is, however, one important resource that will definitely help Joe Small-Business-Owner look for government work. Procurement Technical Assistance Centers (PTACs) are agencies administered by the Department of Defense in order to help small businesses navigate this wild and circuitous process, and their seminars and one-on-one training are actually very helpful, if you stick to their advice. They’re completely blunt about how hard it may be to find a government job, even if you work at it for hours every day. But at least there’s an office out there looking out for you throughout the maddening process of government contract hunting.

All that good stuff said, PTACs are completely ridiculous band-aid excuses for agencies that are supposed to make small business feel better about the bullshit explanation for why they cannot get government work in the first place. When you need a whole agency to help lots of people get government work, you’ve clearly made it way too hard to get government work. If government agents really wanted to make their offices business-friendly, they’d coordinate between one another. Small business owners would fill out one online registration form on one website, where they could apply for their certifications, detail their qualifications clearly, and bid on government jobs as they’re advertised on that database only. It may seem like a simple notion to align each government agency’s requirements to a single, huge vendor database (especially since the government basically buys everything under the sun), but no agency seems to recognize it as simple.

Maybe it’s because it’s not in the interest of “business-friendly” organizations like the U.S. Chamber of Commerce. As it is in the interest of large organizations that get trillions of dollars in government work, it is also in their interest to make the process of applying for government work increasingly overwhelming, overly complicate the requirements for getting that work, and structure the qualification system against small business owners. In that way, it would be easy for organizations like the U.S. Chamber of Commerce to advocate for and request increased funding to PTACs. PTACs only help to confirm exactly how hard it is for Joe Small-Business-Owner to break into the system (despite Joe’s amazing services or breakthrough products).

And the fact that PTAC’s managed by the Department of Defense says a lot about how the Reagan administration viewed fixing joblessness when the program was set up in 1985. Ronald Reagan believed in increasing war services while somehow fighting back government’s size, and PTACs are agencies meant to help small businesses “fight” government bureaucracy and get jobs. Symbolically, anyway. The irony, of course, is that using PTACs does not solve the core problem here: that government agencies are too confusing to navigate. Or, you know, that other irony: thatPTACs are government programs.

It’s strange that we’d need to employ a government agency to help us understand how complicated government agencies can be, but that’s been the logic since 1985. And look where the logic has gotten us. Maybe it’s about time to standardize government vendor databases and procurement processes, before the same three enormous companies are the only game in town. What will politicians say about helping small businesses then?

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