If you want to understand why the government talks a good game but fails to make progress on nuts-and-bolts issues, look no further than the Government Accountability Office report released Friday on barriers to non-traditional suppliers doing business with the Department of Defense.
In the Fiscal Year 2011 National Defense Authorization Act (NDAA), Congress directed the DoD to study this exact issue and recommend ways the government could expand the number of businesses, particularly small businesses, who supply goods and services to the department. The DoD’s Office of Small Business Programs contracted with the RAND Corporation to study the issue and transmitted its final recommendations to Congress in January 2014.
The RAND study is available online. ClearanceJobs has obtained a copy of the DoD report submitted to Congress. Did it fall into a black hole?
WHAT THE DOD FOUND IN 2014 IS WHAT THE GAO FOUND NOW
The legislation that spurred the RAND study defined a non-traditional supplier as a company that “does not currently have contracts and subcontracts to perform work for the Department of Defense with a total combined value in excess of $500,000.”
To narrow the problem, RAND identified three critical areas where small business innovators could be useful, and interviewed 16 firms in those areas that qualified as non-traditional. From those interviews, the researchers identified four common themes, which will sound familiar to any business owner trying to break into the federal marketplace:
- a lack of access to and communication from DoD
- an extensive, complex, and inefficient bid and selection process
- administration and management of contracts that created extra work and delays
- a lengthy funding timeline and final payments that often also involved delays and gaps.
DoD’s recommendations to Congress were not the most robust, and mainly focused on what was already in the two rounds of “Better Buying Power” initiatives. But the department did say it was working to professionalize its small business workforce in an effort to reduce the gap between expectations and capability.
The GAO study acknowledges this study only in a footnote, and repeats the same methodology of talking to some businesses who have had difficulties, and talking to DoD acquisition professionals about what they’re doing. Its conclusion? An almost identical list of barriers identified in the RAND study.
GAO IS LOOKING FOR INNOVATION IN THE WRONG PLACE
But what’s most damning is the stunning mistake GAO made in deciding who to talk to. It correctly points out that “DOD is not a significant customer for top innovative companies.” But it then assumes that the best innovation is coming from industrial giants like Apple, Amazon, and General Electric. GAO said that for its interviews, it “selected large companies that are on the Fortune 500 list and smaller companies that are not on that list to ensure that we considered various perspectives of the challenges faced.”
If the GAO thinks that the DoD will benefit from doing more business with the Apples and Googles of the world, it’s looking in the wrong place. The real advances in defense technology are coming through America’s small businesses which, according to the Small Business Administration, have provided “55% of all jobs and 66% of all net new jobs since the 1970s.” (The definition of what is a small business is different in different industries).
While the government has a long, long way to go towards tapping the power of small businesses, especially those who thing doing business with the federal government is more work than it’s worth, there are points of encouragement.
For instance, the Small Business Innovative Research and the Small Business Technology Transfer programs provide funding to allow small businesses to develop promising technologies with the potential for commercialization, and not just for defense. This year, any federal agency with an external research and development budget of more than $100 million must set aside 3.2 percent of that amount for the SBIR and STTR programs. For DoD, that translates to more than $1 billion.
The program has many proven success stories. One prime example is iRobot, maker of the popular Roomba automated vacuum cleaner. iRobot got its start through SBIR funding to develop small robots for the battlefield like the one featured in the opening sequence of the filmThe Hurt Locker.
If the government truly believes diversity in its industrial base is an issue that can be solved by attracting non-traditional suppliers to the party (and that seems like a fairly intuitive idea on its face), then the answer ins’t more studies and reports, it’s enacting legislation to reduce the massive amounts of red tape that these small businesses face when trying to win government contracts.
It’s time to fix it, not stare at it.
