The Advantages to Being Small

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You might say Segue is like the mighty ant that can carry three times its body weight and accomplish great feats. Competent small IT companies like Segue can provide services that are often more innovative, cost effective, and agile than their mega-size competitors; small size can yield operational efficiencies. Categorizing companies by size allows companies like Segue to be competitive amongst other capable peers, without larger companies dominating the federal market space. It also encourages innovative solutions that might be otherwise overlooked. In addition, the government provides advantages to small businesses (SB) when they compete for work. Overall, being small definitely has its advantages!

The Department of the Defense (DoD) and the entire Federal Government, places special emphasis on hitting certain percentages of contracting dollars that will go to small businesses like Segue. For example, the Air Force goal is 14.5% in FY2012 (they are currently way behind on their goal and have been for several years). To meet their goals for this year, the Air Force must award upwards of $800M more than they are currently tracking. One result is that the Air Force and other services look for ways to achieve their small business goals and identify large acquisitions that they can break up into smaller SB friendly acquisitions. When the acquisitions do remain big, then large prime contractors are incentivized to seek out SB companies like Segue to provide specialized support on their team and perform a designated percentage of work.

Within government contracting, small companies often carry a special socio-economic status, such as Small Disabled Business (SDB), 8(a), Historically Underutilized Business Zones (HUBZone), Service Disabled Veteran Owned SB (SDVOSB), and Economically Disadvantaged Woman Owned (EDWOSB). These socio-economic distinctions allow further refinement in creating competitive pools for small businesses. Segue has no special socioeconomic status; we’re identified generically as a small business by the amount of revenue we generate. This is enough of an advantage though, as it allows us to purse many opportunities that have been set aside for restricted competition amongst only small businesses. The government assesses projects for suitability as a small business set aside, and when they find sufficient competition, they do so. In fact, the recent NETCENTS-2 award is a small business set aside in its entirety. Under this contract Segue has the privilege to compete for subsequent task orders with 11 other small prime contractors, totaling nearly $1 billion dollars.

From a delivery perspective, small companies tend to have greater agility than their large peers, quickly adapting to customer needs. This is certainly true with Segue and we use this to our great advantage when projects entail changing and evolving requirements during the project execution.  Small companies tend to be flatter with minimal management layering, further enhancing agility, quicker decisions and shorter response times. Principal members of Small Businesses are also the subject matter experts for the work they perform, so they are able to align their staff with the changing needs of their customers.  Given the right culture in a small company, this flatter organizational structure can also accelerate innovation and new ideas.  The net effect is that this agility and adaptability becomes a differentiator when proposing on new work.

As you can see, there are indeed advantages to being small.  Some are provided by the government to encourage small business entrepreneurialism.  Other size advantages are operational and are realized during project implementation.  Large companies have their own advantages, but remember, they also have their own weaknesses. For federal contracting, one size does not fit all, so there is a time and place for small companies. Like the mighty ant, Segue can accomplish big things when we leverage our strengths.

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About the Author

David Hart is Segue's Senior Director of Business Development. He primarily works in the DoD space with a focus on Air Force work. He is an expert in team building, collecting market intelligence, identifying pursuits, managing pipeline and partner relationships, and supporting proposal teams to capture federal contracts. Read more from David Hart