WOBs got
it. SDBs got it. SDVOBs are getting it. What about the VOBs?
By Mike
Woelflein Birth right, minority, disability? NO!
Deserving? Yes! Veteran Business Owners fight for their shot
at a Federal Procurement Goal.
For more than a year,
TJ Parro has been trying to do business with the Department of
Veterans Affairs. So far, the owner of Windsor Software
(www.windsorcorp.com), a technology and Internet consulting
firm in Woodbury, Minn., hasn’t succeeded, but he’s not giving
up. Parro, a retired Navy E-5 who flew on search and rescue
helicopter missions in the Pacific from 1973 to 1977, focused
his government contracting efforts on the VA because the
agency says it wants to award seven percent of its contracts
to veteran-owned small businesses. That goal has been around
for almost 20 years, but the agency has never come close to
fulfilling it.
“It’s very frustrating,” he says. “The
VA as a market should be low-hanging fruit for us. But we have
no advantage, nothing that sets us aside from any other
company, even though we have veteran-owned status. The VA has
taken the right step with the 7% goal, but there’s no
contracting vehicle, no mechanism to meet it.”
Parro
has voiced his frustration to Anthony Principi, secretary of
the VA; to the VA’s Office of Small and Disadvantaged Business
Utilization; to members of Congress; to just about anyone who
will listen. He’s heard back that the VA tries, annually, to
get some legislation going to help non-disabled veteran
entrepreneurs, but that it never gets anywhere because the
lobby for minority and women-owned businesses doesn’t want to
lose any of the pie.
But now, Parro believes he’s
found a sympathetic ear. Sen. Norm Coleman (R-Minn.), has
promised to look into drafting legislation similar to last
year’s Public Law 108-183, which gave service-disabled,
veteran-owned businesses set-asides and limited competition in
federal procurement — the tools to award contracts based on
SDVOB status.
He knows he has a fight on his hands.
“It will not be easy,” Parro says. “But I personally know
scores of veteran-owned businesses who feel the same way I do,
and I think we can muster enough passion to get this done. I
believe that people with passion equal power, and that people
with passion can establish change.”
Pushing the
goals Whether there’s anything in the pipeline to help
Veteran Owned Businesses (VOBs) depends on who you ask.
Veterans’ advocacy groups are lobbying for something like the
seven percent goal for all VOBs across the federal government.
And the VA is trying to give its contracting officers the
tools and authority to fulfill the agency’s goal. But nothing
seems close, especially in light of PL 108-183. That law
followed up 1999’s PL 106-50, which set a three percent SDVOB
goal, but veteran advocates point to just how long that took,
how little effect it seems to have had, and how it remains
largely unenforceable.
According to the VA’s Office of
Small and Disadvantaged Business Utilization (OSDBU), the
agency has never awarded more than 4.47 percent of contracts
to VOBs. That was in fiscal 1998, and the average has been
3.07 percent since, compared to a 0.26 percent average for
SDVOBs, which had a high of 0.61 percent in fiscal 2002.
Rick Weidman, a Vietnam vet, co-chair of the Task
Force for Veterans Entrepreneurship, and director of
government relations for Vietnam Veterans of America, would
love to see the VA live up to its promise, to see other
agencies establish veteran-owned goals, and to see legislation
that helps non-disabled VOBs. But for now, his focus is on
making the SDVOB goals effective.
“Veteran business
owners are on the radar screen,” Weidman says. “But we’ve got
to take care of the statutes we have. If we can breach the
wire, if you will, with disabled veterans, then we’ll turn
right back around and pull the other veterans through that
hole.”
There are some success stories, and some hope.
Growing with the VA Ninety percent of Bill
Finch’s business is federal, and about 40 percent of it comes
from 67 VA medical centers from Maine to California and Alaska
to Florida. Finch, a Navy vet from 1967 to 1972, owns
Northeast Office Supply (http://www.northeastofficesupply.com/) in
Canaseraga, N.Y.
He sells 7,000-plus products, from
computer supplies to pencils and coffee filters. While he’s
also a HUBZone (for Historically Underutilized Business Zone)
business, he says his veteran-owned status is the key to
opening the door for VA business. Most of his VA orders come
in from employee’s purchase cards, meaning they’re $2,500 or
less. And while he’s on a GSA schedule (a “hunting license”
for federal business from the GSA, a government-wide
procurement agency), it’s Northeast’s customer service and
marketing that bring the customers in and keeps them coming
back.
“You have to have a niche because the big guys
are also in the government arena and I can’t beat their
prices,” he says. “You have to find some way of getting their
attention.”
With a staff of three people, Northeast
builds relationships with VA buyers. Finch hits all his
customers and potential customers with a brochure or catalog
every two weeks, offering services that Staples or Office
Depot don’t offer. A great example? VA’s supply software
tracks an item complete with the ordering number from the
previous vendor to make it easy for buyers to re-order. Once
Finch gets the ear of a prospective purchaser, he’ll offer to
cross-reference that number to his own, saving the customer
time.
He’s also relentless, working the phones to
develop new customers and never taking “no” for an answer.
“Even if I don’t get a contract, I get my name out there,” he
says. “I’m a marketing person, and I know it takes eight times
knocking on the door for them to even realize you’re there. A
lot of people don’t get past the second or third knock.”
Hope from Primes Groups such as the Supplier
Diversity Pharmaceutical Forum represent hope. Part of the
Institute of Supply Management, the forum was established in
the late 1990s to help its 14 member companies, all pharma
giants, create opportunities for small, disadvantaged and
minority businesses in their industry. And because the VA is
one of their biggest clients, all the companies are audited
annually by the SBA for their purchases — and good faith
efforts to purchase — from VOBs.
“We want to take the
lead,” says Charles Gillean, supplier diversity program
manager for the U.S. operations of U.K.-based AstraZeneca.
“We’re committed to meeting the goals, and showing good faith
efforts to do so.”
The group meets quarterly, working
to identify and develop VOB vendors, and shares best practices
on a more regular basis. Members attend many trade shows, and
will sponsor a Veteran Business Training and Outreach
Conference on Oct. 25 in Malvern, Pa. (The conference will
include seminars on PL 108-183, reverse auctions — a prime
invites bids from multiple vendors, and then negotiates for
the lowest bid — e-catalogs to sell to large companies, and
financing sources for VOBs. Six or more hours of it will be
webcast. For more information, visit http://www.sepaptap.com/.)
According
to Gillean, AstraZeneca’s business with VOBs “has grown
substantially because we’ve been trying to grow it for years.
The sales cycle is long, so we look at events like the Oct. 25
one as a way to make that initial contact and start the clock
ticking.”
AstraZeneca is working with veteran firms
that offer clinical trial management, general construction,
chemicals and distribution of physician samples.
Frustration With any government work come
hurdles and red tape, all of which can be frustrating. Parro
started thinking about the VA more than two years ago as a way
to build his technology and Internet consulting business after
the tech bubble burst and after 9/11. He was told he should
get a GSA contract, and did. “It took me six months to write
the proposal, and another six months for them to evaluate it
and authorize it,” he says.
The schedules are broken
down by business segment, and Parro got his under the heading
of Management, Organizational and Business Improvement
Services, or MOBIS. But when he tried to use it, he found the
VA has a policy for MOBIS contracts: If they’re more than
$100,000, they have to be approved by the deputy secretary, a
process that takes about four months, Parro says.
“That’s an obstacle for the contracting officer, so
they’re reluctant to use MOBIS,” he adds. “Now I’ve applied
for a GSA schedule in IT products and services, but it’ll take
three to six months to get authorized, and I can’t sell
anything until then.”
Parro has had success partnering
with 8(a) (socially disadvantaged or minority-owned)
companies, but he doesn’t think that as a veteran he should
have to follow that route. And like many other veteran
entrepreneurs, he says he’s been told he should “do whatever
it takes to get disabled status.”
“I don’t want to do
that,” he says. “I don’t need a handout. Thirty years ago
flying helicopters, rappelling out of them from 75 feet, I had
a very hard landing and hurt my back. Sure, you get hurt. But
I never went in to sickbay then because you’re young; you suck
it up and go do it again. I’ve felt the pain for 30 years.”
Plus, I would never want to take anything away from someone
who really needs it. Why can’t the government just do the
right thing, and give us a little set-aside to show thanks
from a grateful nation for the service and sacrifice to this
country?”
Possibilities Can that happen? The
answer is political. Any legislative help for vets likely
would spark opposition from women-owned, minority-owned and
even HUBZone advocates. All three have set-aside and
restricted-competition goals, and would howl if they sense
shrinkage in their piece of the pie.
Weidman thinks
it’s worse than that. He even points to such agencies as the
SBA, which had no contracts with SDVOBs in fiscal 2003.
“If there were no contracts with African-Americans,
would anybody accept that?” Weidman asks. “If there were no
contracts with women-owned companies, would anybody accept
that? Or Latino business owners? It’s just absurd. You’re
never going to convince me that that’s just the way it works
out.”
Right now, Weidman isn’t convinced that
non-disabled VOBs will ever get sole-source contracts. He
hopes to see a government-wide goal similar to the VA’s, but
he’s painfully aware that the goals — from 108-183 to the
seven-percent overall target — haven’t worked, and admits to
being “flabbergasted” by the amount of time and effort it’s
taken to get 108-183 into procurement regulations. Ask him to
talk about VA not meeting the seven-percent goal, and he says
he’s “speechless.” But he never really is.
“When we
served, we took a step forward to pledge life and limb to
defend the Constitution of the United States,” he says.
“Nowhere in the Constitution did I see any reference to an
unaccountable fourth branch of government of federal managers
who don’t follow the rules. We have got to start holding
people accountable.”
Looking ahead For VOBs,
accountability probably won’t come until there are tools to
reach the seven-percent goal. The VA has presented such a plan
to the Office of Management and Budget, and each year, when
the VA offers its legislative agenda to Congress, trumpeting
the seven-percent goal is part of it.
The agency’s
OSDBU campaigns to raise awareness at VA, but Scott Denniston,
head of that office, says it’s a tough climb: “Most people in
government are risk-averse. Any new vendor is going to have
risks associated with it, and if you’ve been dealing with the
same stable of vendors for years, you’re satisfied with their
products and services, you’re satisfied with their price and
delivery, then there’s not a lot of incentive to change
vendors.”
Still, good contracting officers are finding
ways to get veterans in the door, often through the other
socio-economic designations. “There are tools available to
target what we’re trying to do,” Denniston says. “There are a
lot of veterans in the VA, and in the Defense Department, and
there’s a connection there that we’re trying to build on. It
is happening.”
Parro, of Minnesota, said Sen. Coleman
told him he’d put a top aide on the matter, and the aide told
Parro he’d focus on it. “They seemed really interested. I told
him this is something that could be done without costing the
government a lot of money, and could be a real win-win for the
person who sponsors it, politically.”
Sen. Coleman and
his office wouldn’t get into specifics, but the senator did
say he is “absolutely committed to making sure that the
American men and women that have served in uniform have fair
and competitive access to federal contracts. This is an
important issue and my staff and I are looking at it closely.”
So as the months go by without VA business, Parro
remains hopeful. “It shouldn’t be that difficult,” he says.
“If anything passes the common sense test, it’s that the
federal government should thank veterans, the people that are
keeping us free and keeping the government in power. They’ve
got to find a tangible way to help us.”
By Mike
Woelflein