There's help for landing federal pacts

Looking to land a federal contract? A Liberty-based agency knows the ropes.
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
LIBERTY -- When it comes to doing business with the federal government, Steve Danyi has seen it all.
He's watched jubilant local business owners celebrating lucrative defense contracts.
He's also seen contracts fall through after months of preparation because of a tiny error or omission, or just because the the government changed its plans.
Danyi is a procurement specialist for the Mahoning Valley Technical Procurement Center, a government agency on Belmont Avenue funded partly by the Department of Defense. He helps small businesses land federal contracts, steering them through the sea of bureaucratic red tape that's become a prerequisite for most any government project.
The center helped eight local companies land $3.8 million in federal contracts last year, for projects that created 39 jobs locally. On average, he said, businesses in the region bring in $4 million to $8 million a year in federal dollars.
Small business fallacy
Small business owners seldom consider trying for a share of the federal spending pie because they think only large businesses can qualify or don't believe they have products or services the federal government wants.
They're wrong on both counts, Danyi said.
The federal government routinely sets aside any contract under $100,000 for small businesses, and about 23 percent of all government contracts are awarded to companies with 500 or fewer employees. Nationally, the average government contract totals $150,000.
He said the Department of Defense alone, with a budget expected to top $400 billion this year, will pay about 70 percent of that total to small businesses.
Large suppliers such as Honeywell and General Dynamics, what the government calls prime contractors, are also obliged to farm out segments of their jobs to smaller subcontractors. They have goals to meet for hiring women-owned businesses, small minority-owned businesses and businesses owned by veterans and disabled veterans.
None too small
No business is too small to qualify. Danyi said he's seen companies with one or two employees competing successfully for federal dollars.
He said the federal government's emphasis on small business is designed with a dual purpose: To preserve the industrial base and to keep prices down by encouraging competition.
Most business owners would be surprised to learn the variety of items the government buys.
"They buy just about everything," Danyi said, brandishing a list of 99 product and service categories. There are the expected items -- weapons, ammunition and explosives -- and the unexpected, items such as live animals, pontoon boats and woodworking equipment.
Fierce competition
Danyi's first step in helping a business land a federal contract is to evaluate the company. Competition for federal dollars is fierce, he said, and a company has to have a proven business track record and a documented quality control system before even trying to join in the game.
One successful example, he said, is Industrial Machining & amp; Design Services, a Youngstown business that recently clinched a $1.8 million contract to supply equipment to the U.S. Army's Tank, Automotive and Armaments command.
The company spent the past few years studying the market and perfecting its quality controls.
"It's an anticipatory program, and that company did its homework. They're very qualified to do that kind of work, but it has to be a combination of qualification and price," Danyi said.
One of the most unusual government sales Danyi can recall was a few years ago, a when a small Youngstown distributor got an order to supply drinking glasses for Air Force One. The company, Bilstro Supplies, has since moved to Canfield.
Just recently, he said, a local company got a contract to supply computer training for an Air Force base in Alaska, and a Trumbull County company went to Florida to provide a welding system for an Air Force base there.
Small business owners usually show more interest in government contracts when the economy lags, hoping to supplement their regular commercial contracts. Danyi said 60 companies showed up recently when the Procurement Center sponsored a government contract seminar with Congressman Tim Ryan of Niles, D-17th.
Combination is best
Although government work is great for the Valley because it brings new dollars into the region, Danyi said he always recommends companies maintain a healthy combination of government and commercial business.
It's risky for a business to depend too heavily on government contracts, he explained, because the government's needs always get priority. Contracts can be terminated in midstream "for convenience," leaving the supplier holding the unused products.
"We always recommend companies keep a good mix of government contracts and commercial contracts. You don't put all your eggs in one basket," he said. "That kind of helps them ride out the economic dips."
vinarsky@vindy.com