Why (and How) to Support Veteran-Owned Businesses

November 8, 2011

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In this Expert's Corner, GovPro.com's Mike Keating explains why it's important for state and local governments to support veteran-owned businesses with contracts, and highlights ways veterans can win government business.

Unemployment in the United States remains high for people who have served our country. Veterans who left military service in the past decade have an unemployment rate of 11.7 percent, which is substantially above the overall jobless rate of 9.1 percent, according to the U.S. Bureau of Labor Statistics. Yet there are signs that the private sector is stepping up.

On average, 23 percent of new hires at the top 100 military-friendly employers are military veterans, up from 20 percent last year and 17 percent in 2009, according to G.I. Jobs' 2011 benchmarking report.

Employ Veteran-Owned Businesses 199x129.jpgIn the public sector, veteran-owned businesses (VOBs) and service-disabled VOBs are winning government contracts. Federal agencies bought goods and services worth almost $13.7 billion from veteran-owned small businesses (VOSBs) in the latest fiscal year, the Federal Procurement Data System says. Top awarding agencies included the Department of Defense, Department of Veterans Affairs, the Department of Homeland Security and the General Services Administration.

"Public Law 106-50 requires the federal government to spend 3 percent of all contract and subcontract award dollars with veteran-owned firms. In addition, many state and local governments have implemented similar legislation," Matthew Pavelek, director of communications at the Coraopolis, Pa.-based National Veteran-Owned Business Association (NaVOBA), tells IMT. NaVOBA's State Tracker shows opportunities available to VOBs in each state.

According to Pavelek, city and county governments have been implementing preference and set-aside programs for VOBs in procurement contracts in Las Vegas, Pittsburgh, Indianapolis, Grand Rapids and elsewhere. Pavelek and NaVOBA urge VOBs to register their businesses at BuyVeteran.com.

More government funding is needed, according to Lourdes Martin-Rosa, American Express OPEN adviser on government contracting.

"To support veteran-owned businesses, the government should offer more grants to fund educational business opportunities for veterans. Through these programs, veterans will learn about how they can become successful business owners and run profitable businesses," Martin-Rosa says. "Florida State University and Syracuse University are examples of where this is happening."

Veterans should consider enrolling in the Rockville, Md.-based Veteran Institute for Procurement (VIP), a non-profit program that trains veteran-owned small business executives for success in federal contracting. A recent survey of 30 of the earliest VIP graduates found that they were responsible for 570 new jobs. Moreover, 85 percent of the graduates credited VIP with equipping them to make recent business decisions and avoid unforeseen business hazards.

Increased support for vets could help solve the current technical-skills shortage, according to Don Gonneville, owner of San Juan Capistrano, Calif.-based Gonneville Inc., a certified Service-Disabled Veteran-Owned Business Enterprise (SDVOB) and a small business that distributes generators, light towers and wet abrasive blast systems to the federal government.

"It is a fact that companies are finding it difficult to source, hire and retain skilled, technically qualified employees, in spite of the widespread unemployment," Gonneville says. "A public/private program to provide effective technical training to returning veterans could help to alleviate this situation. Such programs undoubtedly exist, and should be looked upon as a basis for expanding opportunities."

For veterans, landing government business doesn't happen overnight, Gonneville continues.

"It's important to understand that government contracting is generally a long process, sometimes taking years before receiving significant contracts. According to American Express OPEN's survey of government contractors, it took active contractors nearly two years to win their first federal contract," Gonneville notes. "Going after smaller contracts on a local basis is a good way to start, building on success after success on a limited basis. Teaming with or selling to government prime contractors is another way to get started."

Gloria Berthold Larkin, president of Columbia, Md.-based TargetGov at Marketing Outsource Associates, Inc., urges VOBs to understand the differences in selling to the federal market. Larkin, who discusses the subject at length in her book Veterans Business Guide, says selling to the federal government is different from any other market for three key reasons:

  1. The language is different;
  2. The buying process is much more complicated; and
  3. There are very specific and strict rules and regulations governing all transactions.

("Understanding the Federal Buying Process," chapter 4 in Larkin's book, details the unique differences and outlines a clear approach to winning federal contracts.)

"It is in the U.S. government's best interests to award contracts to qualified VOSBs," according to Timothy Woods, a retired U.S. Army combat veteran who works as a procurement consultant and master business development specialist in government contracting at the Small Business Development Center at the Dallas County Community College District.

"Small business is the economic engine that will get our economy going again," Woods explains. "Awarding contracts to veterans accomplishes two objectives: It helps fight unemployment, which, coincidentally, is highest among our veteran population, and it invests in restarting our economy."

For more information on helping veterans land government contracts, visit Woods' Veterans Business Resources Page.

Michael Keating is senior editor for Government Product News and a contributing editor for American City and County, both published by Penton Media Inc. His mid-year 2011 government budget forecast is available at GovPro.com and IMT. He's written about the importance of governments aiding veterans at GovPro.com. Keating has written articles on the government market for more than 100 publications, including USA Today, Sanitary Maintenance, IndustryWeek and the Costco Connection. Mike can be reached through his website, MikeKeat.net.

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