RICHMOND - Sen. Mark Warner says Virginia needs to diversify the economy in the wake of sequestration cuts, which have hit the military-heavy commonwealth hard.

"Sequestration was about the stupidest option possible, and Virginia, we bore the brunt of sequestration cuts more than virtually any other state," he said. The 2011 Budget Control Act's spending cuts could take nearly 3,000 Army and civilian jobs at Fort Lee.

Warner appeared via Skype at Wednesday's AP Day at the Capital program, a gathering of journalists sponsored by the Associated Press Media Editors, Capitol Correspondents Association and Society of Professional Journalists Virginia Pro Chapter.

 "We're asking our military to do more abroad, as we see threats from ISIL, when we see our troops deployed to Africa for Ebola," Warner said. The trouble will be finding additional funding for defense.

"The idea that that's going to come at the cost of cutting education, infrastructure and research isn't a good business plan for the country," he said. He thinks reform of the national tax code, and entitlement reform, are key to the budget issue.

The Army is in the planning process of downsizing from a wartime peak of 526,000 to about 420,000 troops. Under the latest Army report, Fort Lee would lose 2,794 troops - including 879 already cut in the deactivation of the 49th Quartermaster Group - and 746 civilians. That worst-case scenario would ding the region's economy by an estimated $338.4 million in sales and $243 in income, for a total of $581 million.

Warner also discussed Virginia's dependence on defense spending, highlighted in recent years locally by sequestration and the government shutdown. He thinks Virginia can take a prominent role in the areas of cybersecurity, unmanned aerial systems, commercial space operations and advanced manufacturing.

"I concur with the governor and others… we've got to think about diversification of Virginia's economy," Warner said.

"We have assets in Northern Virginia, Central Virginia and Hampton Roads. We've got expertise at Virginia Tech," for cybersecurity. Read Full Arrticle.

President Barack Obama released a memo in January asking regulators to avoid imposing heavy burdens on small companies and to search for ways to minimize these burdens.  Obama wrote in his memo, “Agencies must carry out the regulatory law by allowing small businesses more flexibility in meeting the compliance requirement. They should take into account the resource available to small entities.”

A couple days later Senator Olympia Snowe (R-Maine) said she plans to introduce a bill to require government regulators to consider small businesses as they draft new rules. “I intend to offer legislation in the coming weeks requiring the federal government to fully consider the economic impact on small businesses during the federal rulemaking process,” she said.

The legislation should be introduced in the next couple of weeks and small businesses should keep this on the radar.

On January 27, 2011 - U.S. Transportation Secretary Ray LaHood announced a final rulemaking that will help economically and socially disadvantaged businesses take advantage of opportunities to participate in federally funded highway, transit and airport projects. This final rule will also hold state and local agencies more accountable for including disadvantaged businesses into their transportation plans.

“When we help small businesses, we’re helping to get the economy going,” said Secretary LaHood. “This rule will help small and disadvantaged businesses get a fair shot at participating in state and local transportation projects.”

The rulemaking also included provisions to ensure that prime contractors fulfill commitments to use Disadvantaged Business Enterprise (DBE) subcontractors. Another major change with this rule is all states will be required to accept DBE certifications obtained in other states, unless the state finds good cause to not accept it.

The SBA will award $5 million in grant funding to assist undersized firms compete for large contracts. The grant recipients will be asked to find teaming partners to bid on large contracts with them. This will include identifying the team, preparing proposals and submitting the bids.

“The Small Business Jobs Act provides critical resources to help small businesses continue to drive economic recovery and create jobs,“ SBA Administrator Karen Mills said.  “The teaming pilot program will help put contract dollars into the hands of small businesses, create job opportunities through the teaming arrangements, help drive innovation and promote economic growth for our nation’s economy.”

The SBA is projecting to make 10 – 20 grant award of $250,000 - $500,000 for FY 2011. The awards will have a base project period of one (1) year, with four (4) option 12-month extensions. Applicants must:

• Private entity – profit or nonprofit
•  At least 3 years old
• Must have experience working with small business issues on a national level

The organizations that are awarded the grants will be required to coordinator their own assistance with the agency’s district offices and other federal, state, local and tribal government small business development programs.

All grants proposals must be submitted through the federal website www.grants.gov by Friday, February 25, 2011.

Department of Homeland Security Enterprise Solutions Office - EAGLE (Enterprise Acquisition Gateway for Leading Edge Solutions) contract – worth $22 billion. The EAGLE II solicitation will include two separate source selections – one unrestricted, and one specifically set aside for small businesses. The RFP for this contact is expected to come out during the first quarter of fiscal-year 2011.

The National Institutes of Health (NIH) - Chief Information Office Solutions and Partners 3 (CIO-SP3) - worth $20 billion. The RFP for this contract is expected to come out during the first quarter of fiscal-year 2011.

US Army – Program Manager, Defense Communications and Army Transmission Systems (PM DCATS) – worth $19.5 billion. The RFP for this contract is expected to come out during the third quarter of fiscal-year 2011.

U.S. Coast Guard – Technical, Acquisition and Business Support Services (TABSS) – worth $11 billion. The RFP for this contract is expected to come out during the first quarter of fiscal-year 2011.

US Army - Computer, Hardware, Enterprise Software and Solutions (CHESS) – worth $5 billion, with a percentage designated as small business set-asides. The RFP for this contract is expected to come out during the third quarter of fiscal-year 2011.

Teaming Tip:
The dollar value of some of these opportunities may be daunting. That’s where teaming comes in. As a small business in the government contracting world, some of your best opportunities will be through teaming arrangements.
 

The government has a contracting goal of 5% with women-owned companies and to date the federal government has never met this goal. Starting in early 2011, the Small Business Administration (SBA) will have procedures in place to help women-owned companies gain access to more federal contracts. 

The program will allow contracting officers to restrict competition in 83 industry categories to women-owned small businesses. When the program was being defined 45 industries were deemed “underrepresented” and 38 industries were deemed “substantially underrepresented” by women-owned companies.

"Women-owned businesses are one of the fastest growing sectors of our nation's economy, and even during the economic downturn of the last few years, have been one of the key job creation engines in communites across the country," SBA Administrator Karen Mills said.

It is believed with this new program with federal government will achieve the 5% contracting goal with women-owned companies.

For more information click here.

Apple Corp is taking the beginning steps to formalize relationships with system integrator companies; Agilex Corp and Unisys Corp. Mobile technologies are stirring interest among government customers and Apple’s products can meet this demand. The iPad and iPhone are among the top mobile devices Apple will use in their authorize systems integrator program.  To learn more click here.

On November 17th, 2010, the U.S. Department of Transportation’s Office of Small and Disadvantaged Business Utilization (OSDBU) hosted an event to develop stronger working relationship between OSDBU’s Financial Assistance Division, Participating Lenders and Small Business Transportation Resource Centers (SBTRCs).

“We are very excited to have our SBTRCs and Participating Lenders from all over the country here at DOT Headquarters to learn and share ideas to help small businesses obtain working capital. The energy and enthusiasm of today’s event will be channeled to each region, increasing opportunities for small businesses to grow,” remarked Brandon Neal, OSDBU Director.

DOT OSDBU’s Short-Term Lending Program (STLP) helps small businesses gain access to the financing they need to participate in transportation-related contracts. STLP provides certified DBE's and other certified small businesses short term working capital financing at competitive interest rates for DOT or DOT funded contracts and subcontracts. The loan guarantee provides a revolving line of credit for work on transportation-related contracts.

The military has tested many new technologies in the past and the most recent are iPads and e-books. The main reasons to test these specific types of technologies are for the field manuals. If there any updates in the manuals the iPads or e-books would directly receive the updates reducing printing costs and distribution time.

The military is also testing smart phones. Smart phones have lots of memory, reception, applications and new operating systems. The smart phones are used in during basic training as a learning tool. There are also military affiliated contests for new iPhone Apps. The top 5 winning Apps are: a physical training program, a telehealth mood tracker, a disaster relief application, a movement projection tool for mapping routes and a program to provide information to prospective soldiers.

A huge drawback is the potential risk that the iPads, e-book and Smart Phones could get hacked as other military equipment has in the past.

The Defense Department’s need for unmanned aircraft continues to increase but the technology to operate them is reaching its limitation.

The automation will increase the number of platforms and missions while minimizing the number of personnel. Fewer pilots will be able to manage several unmanned aircrafts on missions using autonomous fight software. The new technology will also allow large amounts of data to be transmitted to personnel in the US instead of needing onsite analysts.

Initial reports estimate total spending over the next 10 years to be approximately $80 billion. 

There is a new Mobile Gov IT App. Designed by Winvale, this app has the latest Government IT news, CIO blogs, FY2011 IT budget forecasts and GSA’s IT Schedule 70 information. This FREE App is the first of its kind for Government Technology. Download it at the Apple’s App Store.

On Monday September 27 2010, President Barack Obama signed the small business bill into law! The law also sets up a lending fund for small business and $12 billion in tax breaks.

“It was critical that we cut taxes and make more loans available to entrepreneurs.” Obama said in remarks at the White House. “So today after a long and tough fight, I am signing a small business jobs bill that does exactly that.”

The government has a contracting goal of 5% with women-owned companies and to date the federal government has never met this goal. Starting in 2011, the Small Business Administration (SBA) will have procedures in place to help women-owned companies gain access to more federal contracts.

The program will allow contracting officers to restrict competition in 83 industry categories to women-owned small businesses. When the program was being defined 45 industries were deemed “underrepresented” and 38 industries were deemed “substantially underrepresented” by women-owned companies.

It is believed with this new program with federal government will achieve the 5% contracting goal with women-owned companies.

For more information click here.

It is first important to know the difference between prime contractor and subcontractor. A prime contractor sells to the government; whereas, a subcontractor sells to who sells to the government.

Prime Contractor
Some small businesses are not aware of what they are committing to when becoming a prime contractor for the government. The government views a prime contractor as the single point of contact, and is accountable for cost and schedule and performance.

One problematic area for a small company working as a prime contractor for the government is payment. A typical company invoices the government 30 days after starting a contract and the government has up to 90 days to respond to that invoice.  The government pays a prime contractor when it sees fit so it could take at least four to five months. Most small companies do not have a cash reserve to put front so much money  and wait months for payment.

Another problematic area is the language and clauses to a contract. Many small companies are unsure of all the terms, acronyms, clauses, references and requirements in a contract. These results in a poorly negotiate contract and the uncertainty of the contract itself.

Subcontractor
In most instances it makes sense for a small business to be a subcontractor. The advantage is the business relationship with the prime contractor and the face to face time.  The prime contractor can also pay invoices within days of receipt and as a subcontractor it will be easier to have access to the information you need to complete the job.

WashingtonTechnology ranked the Top 100 Government Contractors who won nearly $130 billion in prime contracts last year.

1. Lockheed Martin Corp
2. Northrop Grumman Corp
3. Boeing Co
4. Raytheon Co
5. Science Applications International Corp

To see the entire Top 100 List please click here.