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Monday, May 29, 2023

A Thank You and 4 Gifts from Ken Larson

With well over a decade in volunteer small business consulting, I appreciate the many individuals who have contacted me for advice. 

You have come from many venues through the Micro Mentor and SCORE Foundations, LinkedIn and other social media sites.  It has been a pleasure serving small business. 

My work with you has kept me active in retirement, in touch with my profession and engaged in a continuous learning mode.

Please feel free to download any of the 4 free books available at the BOX in the right margin of this site.  Although originally written some time ago, these Adobe downloads contain live links to the latest updates for any given article. 
(If the books do not appear, please use a browser without an ad blocker or go to - for your free downloads).  

My best wishes for success to you in your small business enterprises. 

Ken Larson


Friday, May 26, 2023

Remember the Small Business Instant Depreciation Tax Break

"New York Times"

“Nearly all small businesses, even the very tiniest, should consider taking advantage of the deduction.

The deduction is essentially limited to small and midsize companies. It begins phasing out when a company spends more than $2 million a year on qualifying purchases, and is eliminated entirely for those that spend more than $2.5 million.

The deduction works like this: If a company has a $90,000 profit and decides to spend $50,000 of it on new computers, the company would normally write off the cost of the equipment gradually, deducting a portion of it each year over the span of the computers’ useful life. But Section 179 allows the business to deduct the entire $50,000 cost at once in the year the equipment is purchased, reducing the company’s taxable profit to $40,000. (The deduction cannot exceed a business’s total net income.)

Section 179 was once a fairly limited tax break, with an annual cap of $25,000 or less. But in 2003, Congress temporarily raised the limit to $100,000, and in 2008, as the recession set in, it raised the cap again to $250,000. In 2010, hoping to stimulate more spending, Congress increased the limit to $500,000, allowing businesses to use the deduction toward expensive items like factory machinery and trucks.

But each increase was a temporary measure requiring annual reauthorization to prevent the cap from returning to $25,000 — and Congress developed a habit of waiting until the very last days of the year to make a decision. In 2012, it missed the calendar deadline completely and passed legislation on Jan 1, 2013, retroactively raising the deduction limit for equipment business owners had purchased the previous year.

“The uncertainty drives my clients up a tree,” said Paul Neiffer, an accountant with CliftonLarsonAllen in Yakima, Wash., who specializes in the agricultural industry. “Not knowing each year if it will be extended prevents a lot of our farmers from pulling the trigger on buying equipment.”

From now on, they will know. The 233-page tax deal includes in its myriad tax breaks one that permanently sets the Section 179 cap at $500,000, subject to inflation adjustments.

“You can’t plan to spend that kind of money with just two weeks left in the year,” she said. “We might see some activity this year, but the real benefit for us will come next year, when customers can plan ahead for it.”

Some companies do try to jam in qualifying purchases before the calendar year ends. Last year, Congress raised the Section 179 limit for the year on Dec. 16. The next day, the prices farm machinery sold for at auctions increased compared with just a few days earlier, according to Greg Peterson, the owner of Machinery Pete, a site that tracks equipment auction prices.

“The response is nearly Pavlovian at this point,” he said. “The farm audience had grown so used to this annual silly dance of wait-and-see on our friends in Washington.”

Making Section 179’s higher limit permanent will cost taxpayers $77 billion in foregone revenue over the next 10 years, according to a government estimate. The tax break’s aim is to stimulate spending — but does it work?

An analysis by the Congressional Research Service found that expensing allowances like Section 179 appear to “have a minor effect at best” on how much businesses spend on capital goods. Expectations for future sales growth, not tax considerations, motivates most of the investment in the kinds of assets eligible for expensing.

The main advantage of expensing allowances, the report suggests, comes from simplifying the tax accounting business owners face on their capital purchases.

Still, owners like Mr. Kortesmaki see the tax break as a crucial one for helping their small business grow a bit bigger.

“I’d rather invest that money in my business than pay taxes on it,” he said. “Having this become permanent makes my business planning for the next few years a whole lot easier.”

Small Business Gets Tax Break

Tuesday, May 23, 2023

Contract Closeout In Small Business Federal Government Contracting


If you are an off-the-shelf or purchased-finished supplier of goods to the federal government, your contact closeout is reasonably simple. You will make delivery at a firm, fixed price to the agency to which you have contracted and submit an invoice. The government will receive and inspect the delivery and approve your invoice for payment. Assuming there are no ongoing warranties, logistics support or similar contract line items involved, the government will then closeout the contract, as will you.

Contracts involving progress billing with retention, cost type contracts and those with intellectual property, government property, classified documents, provisional billing rates and similar more complex matters require astute attention to detail and considerably more administrative support and coordination between the contractor and the government for closeout. Successful contract closeout of these types of programs is an ongoing process beginning at contract award.

This article will discuss the principal features of the closeout process in small business federal government contracting and provide references for further process detail.


Below is a synopsis from the introduction to the Defense Contract Management Agency DCMA Manual 2501-07 Contract Closeout which is a free download from the  “References" File in the Box Net cube at the right margin of this site. The synopsis and the book should be read carefully by small business federal government contractors:

Communication and information sharing is key to timely contract closeout. Contract Closeout occurs when all the terms of a contract/order have been met and all administrative actions are completed, all disputes settled, and final payment has been made. This includes those administrative actions that are contractually required; i.e. property, patents and royalties" 


  • Consider the type of contact under which you are operating and locate that type in the manual Insure the processes specified in are followed in your contract administration from the onset of your contact. Government contract types are discussed at the following link:  Contract Types

Note the manual discusses both the role of the government and the contractor in closeout and the stages in achieving closeout. 

  • Support Cost-Type Contracts With Timely Incurred Cost Proposal Rates and Submissions – Several articles at this site have addressed the development of forward pricing rates and associated DCAA audits and submissions. Here are the most important articles with respect to contract closeout:

  • To close out a cost type contract that has been billed throughout its life at provisional rates, regular incurred cost submissions must be submitted by the contractor and verified by DCAA. Provisional rates must then be adjusted to audited applied actual costs and the final billing determined. This could result in net excess funding on the program that must be returned or a requirement for addition funding at closeout. In either case, the business impact could be substantial for a small enterprise.

Note the following Simplifying Techniques:

  • Verify payment accuracy and report discrepancies immediately.
  • Provide Contracting Officer with cost estimates of projected cost (usually 60 days in advance) in compliance with Limitation of Cost/Funds Clauses (FAR 52.232.20 through 21) for cost reimbursement and facilities contracts.
  • Submit patent reports on time to the Administrative Contracting Officer when required by the patent clause.
  • Submit Overhead Rate Proposals no later than 6 months after the end of the contractor's fiscal year.
  • Prepare final voucher no later than 4 months after settlement of overhead rates.
  • Consider Quick Closeout procedure when it's determined that normal closeout will be delayed.
  • Execute government property disposition instructions expediently.”

Becoming informed on government contract closeout steps and putting in place processes to support them in your business system is the most important general principal to remember. Consider the type of contract you are releasing for incurred cost. Bear in mind how an individual contract impacts on your business system and insure your business system supports the type of contact you are putting into play. Develop a good working relationship with your contracting officers, DCMA and DCAA.  For more on the roles of these government functions, please see the following link:

Federal Government Contracting Customer Relations

Thursday, May 18, 2023

Federal Government Contract Terminations

On occasion the government finds it necessary to terminate contractual arrangements with contractors. FAR Sub-part 49.5 governs such actions. Here are the two most common forms of contract termination, what you should know about them and how to manage them.


Certain conditions are usually present when contact termination is on the horizon. These factors range from product and services obsolescence to developments that change the direction and amount of agency funding. They may also include customer relations difficulties or changes in the mission of an agency.

It is best to manage the risks associated with terminations by viewing them in the light of funding and performance liability. We have previously discussed limitation of funds and funding exposure in the following articles:

Limitation of Funds and Funding Exposure

Contract Baseline Management

If it is generally known, for instance, that if the government is having funding challenges in terms of justifying the next phase of a program, your company should carefully monitor incurred costs and commitments so they do not exceed the existing funding on the contract.

Moreover, if performance on a particular contract has been sub-par, deliveries have been late and corrective action has not remedied the situation, the reality of a termination for default should be assessed from a liability perspective; particularly concerning costs the government may bill the contractor for inconvenience. Receipt of "Show Cause" notices or "Cure Letters" are signs the government is positioning a justification for contract termination.

Terminations for default are particularly harmful to a contractor's past performance rating on federal government contracts:

Contract Past Performance Record

The remainder of this article will focus on each of the two major types of terminations and how to manage each.


This form of termination arises from standard clause(s) in your government contract that give the government the right to unilaterally terminate the contract at any time with or without giving any reason. The contractor is generally entitled to a negotiated settlement for an equitable recovery of costs and losses incurred. Please see the following link for applicable clauses:

Subpart 49.5 Termination Clauses

A termination for convenience is the least risky form of termination to the contractor. Although receiving a notice that your contract is being terminated for convenience is never good news, it does offer the opportunity to recover costs you have incurred and those you estimate will impact your business due to the termination.

Actions necessary:

1. First, insure your costs to date, plus commitments have not exceeded the funding level of the contract. If they have, consider asking for a funds amendment to your contact to cover the overrun. It may not be granted by the government. Next, immediately notify departments internal to the company with regard to the termination and inform them that their charge numbers for the program have been closed. Close all charge numbers. 

2. Notify all suppliers and subcontractors with respect to the contract termination, direct that they cease work, discontinue deliveries and submit to you a termination proposal containing itemization and costs associated with terminating their order or contract. You will negotiate with your supply chain and include their costs in your termination settlement proposal to the government.

3. Open a contract termination charge number for selected use by those who are associated with the termination to charge related time and expenses for ceasing work, inventorying material, supporting a termination proposal, dealing with suppliers, handling special requests or other direct efforts to cease work. It makes no difference whether the individuals are direct or indirect in their normal time keeping. This special accounting charge number will be utilized to record the cost to your firm for terminating the contract and proposing a settlement to the government. 

4. Complete your contract termination settlement proposal and submit it to the agency contracting officer to meet the date specified by the agency for same.

5. When the contract termination settlement proposal has been negotiated and formalized with an amendment to closeout the contract in accordance with the following government approved practices:

Government Contract Closeout


A termination for default rises from standard clause(s) in your contract that give the government the right to unilaterally terminate the contractor if the contractor fails to perform according to the specified terms. The contractor is generally not entitled to any payment for the unfinished part of the contract and, instead, may be liable for (1) repayment of monies advanced, (2) liquidated and other damages and (3) excess cost incurred by the government in completing the contact under a new contractor. Please see the following link for applicable clauses:

Subpart 49.5 Termination Clauses

The Government contracting officer will terminate a contract for default when he or she determines that the contractor has failed to adequately perform in accordance with the contract. The Default clause applicable to fixed-price contracts limits the Government's liability for unaccepted work, subjects the contractor to actual (or liquidated) damages, and may subject the contractor for the excess cost of re-procurement. Moreover, the default becomes part of the contractor's past performance record which will harm the contractor's ability to compete on future contracts. Because the Government is not liable for work not accepted, the termination for default has a greater adverse consequence on supply contracts than service and construction contracts.

The government may terminate all or part of a contract for anything that was done that was not in the interest of the government, including:
  • Attempted fraud
  • Failure to meet quality requirements
  • Failure to deliver the supplies or perform the services within the time specified in the contract
  • Failure to make progress and that failure endangers performance of the contract
  • Failure to perform any other provisions of the contract.

Cure Notice

Before terminating a contract for default because of your failure to make progress or to perform, the contracting officer will usually give you a written notice, called a "cure notice." That notice allows you at least 10 days to cure any defects. Unless the failure to perform is cured within the 10 days, the contracting officer may issue a notice of termination for default.

Show-Cause Notice 

If there is not sufficient time for a cure, the contracting officer will usually send a show-cause notice. That notice directs you to show why your contract should not be terminated for default. It ensures that you understand your predicament, and your answer can be used in evaluating whether circumstances justify default action.

If a contractor succeeds in appealing the termination for default, the default is usually converted into one for the convenience of the Government.

Actions Necessary:

1. When a termination for default is at hand, contact a law firm that specializes in government contract terminations and proceed within the guidance offered by them in pursuing any part of the termination that could be converted to a termination for convenience or other form of relief with respect to conditions over which you may not have had control or for which you may be entitled to a request for equitable adjustment or contact claim.

2.  You should also proceed in accordance with paragraphs III. 1. through III. 3. above to limit your internal and supplier liability as well as isolate costs associated with the termination for a potential settlement or claim.  

When the contract has been amended by termination for default, close out the contract in accordance with the following government approved practices:

Government Contract Closeout


Contract terminations should be avoided if at all possible. They are expensive on the part of both the government and the contractor. The negative aspects of a termination for default, in particular, can last for years in government contractor past performance data bases.

Wednesday, May 17, 2023

Are Startups Missing Out By Not Bidding On Federal Contracts?


By Kayleigh Alexandra

If you run a startup, the thought might never have crossed your mind to seek out contract work with the government. After all, it isn’t the conventional way forward, and you might well figure that federal contracts will invariably go to companies with well-established government links.

But are you missing out by not making an effort to seek out federal contract work? Let’s go through some reasons why you might want to give it more consideration.

You can’t get what you don’t apply for

The notion that government contracts will always go to giant corporations is something of a self-fulfilling prophecy, as it spurs small enterprises to hold back from applying for them. Despite this impression, it’s generally quite viable, especially since the Federal Government sets a goal every fiscal year for contracting a percentage of its work to small businesses.

In 2020, the Federal Government awarded 26.01 percent or  $145.7 billion in contract work to small businesses, exceeding the yearly goal of 23%  and at a $13 billion increase from the previous fiscal year.
Given this ongoing commitment to diversifying the awarding of government work, now is as good a time as any to pitch for available contracts. If you succeed in getting one, you may be able to parlay it into an ongoing working relationship.

The field is becoming more open

The main difficulties with landing federal contracts are not technical but procedural and organizational, and the problem with high-level bureaucracy is that it’s incredibly difficult to dislodge. The flexibility in approach, then, must stem from the applicants.

While this is undoubtedly a frustrating notion to small businesses everywhere, consider that it also wards off a lot of possible competition, and that the benefits of securing federal work are extensive.

Another thing worth noting for programs set aside for small business is that medium and large businesses are both precluded from assuming prime roles and limited in their participation as subcontractors. The government’s mandate for a small business set-aside contract caps participation by firms other than the small business prime awardee at 49% of the project effort (factoring in work scope, cost, and time). While this does mean that a small business must demonstrate (during the proposal and site survey phases) the ability to carry out 51% of the work internally to win a contract, it does ensure that a majority of the work genuinely goes to small business workers.

The advantages of government work

Even disregarding the intimidating process involved in securing government work, a lot of startups may well think that it isn’t the right fit for them, particularly given the common perception that federal contracts are dull, expensive, or overly complicated. Brand image is very important in the social media age (and more important than people think for contract bidding), and pitching to popular brands might feel like a better option.

The big advantage to working on government contracts is that it lends your company a great deal of credibility and cache. People understand that it’s a difficult marketplace to operate in, and will view your ability to do so as an indication of your professionalism.

Here are some more advantages:

     Scheduling Consistency
     A lot of contract work extends to substantial periods of time, meaning you plan your financial year around it and allocate your resources efficiently.
     Industry Networking
     You’ll have the chance to meet people in very important positions in your industry, providing you with the opportunity to network and establish useful contacts.
     Financial Certainty
     Government payments will always be issued on time and in accordance with the agreed terms. You will never face the prospect of chasing them for payment.

Meeting the requirements for contractors

There are specific requirements that prospective contract work suppliers must meet in order to be granted consideration, and meeting those requirements is the most challenging part of the process (with the possible exception of formulating the pitch).

Typically, you’ll need to ensure that your business system meets government standards for job cost accounting (each job is unique and must be costed accurately), be fully prepared to deal with thorough audit requests, and have the capacity to produce project proposals of a sufficiently-high quality and that your business system meets government standards

You’ll also want to make sure your company has adequate insurance. Basic commercial insurance likely won’t cut it— you should pursue a suitable custom policy that covers everything needed, such as Defense Base Act insurance if you use overseas employees. The government is very risk-averse in awarding contracts and you won’t stand a chance if your proposition seems a little rocky.

To navigate those murky waters, it’s generally best to consult a specialist. This website offers a great deal of information for free, but there are also paid consultants you can hire to help get your business ready to be viable for contract bidding. Here are a couple of you can consider:

     Mark Amtower:

Working with a prime contractor

Given the complexity and expense involved in becoming a government contractor, it’s often worth considering the option of working as a subcontractor for a prime contractor. A prime contractor is a business that has been granted full control of a government contract, allowing it to delegate parts of the work should it wish to.

If your startup isn’t ready to battle with much larger companies for huge contracts, subcontracting work could be a great first step to take. Most of the advantages we covered earlier still apply, as well, so it gives you the chance to make some influential contacts.

In summary

It isn’t easy to acquire a government contract, especially if your business is just getting started, but it isn’t impossible, and the benefits can be substantial.

If it’s an option you’d like to pursue in the future, make an effort to begin preparing your organizational structure to meet federal requirements, and seek out subcontracting work to help you establish the connections that could help you in the right direction.


Kayleigh Alexandra is a content writer for Micro Startups — a site dedicated to giving through growth hacking. Visit the blog for your latest dose of startup, entrepreneur, and charity insights from top experts around the globe. Follow us on Twitter @getmicrostarted.

Saturday, May 13, 2023

Meeting Veteran & Employer Challenges During Transition from Military to Civilian Work

Expectations and Reality are Far Apart on Both Sides of the Employment Spectrum
By Ken Larson 

Aside from the legal and moral obligations to employ returning veterans, there is a third, vital challenge in the employment transition equation: understanding the vast difference between the military and civilian work environments.  The expectations of both parties must be carefully assessed and communicated with realistic processes for effective transition from military to civilian employment by the veteran.

Civilian Knowledge of the Military Environment Has Diminished

As a country, America has been at war nonstop for the past 20 years. As a public, it has not. A total of about 2.5 million Americans, roughly three-quarters of 1 percent, served in Iraq or Afghanistan at any point in the post-9/11 years, many of them more than once.

War was much closer to home when the draft existed and military participation ran higher during WW II and the Vietnam Conflict.

The Nature of Today's Wars and a Cynicism with Regard to Their Outcome Impacts the Veteran and the Civilian Outlook

Ultimately, the military’s discontent may stem from dissonance between the commitment to, and pride in, the mission in Iraq and Afghanistan and the knowledge that these sacrifices have not yielded the desired results.

The wars in Iraq and Afghanistan arguably have prompted a crisis of confidence within the military itself.

Despite a six-year, $287 million effort to make troops more optimistic and resilient, an Army survey found that 52 percent of soldiers scored badly on questions that measured optimism, while 48 percent reported having little satisfaction or commitment to their job.

Veterans bring these issues home and find a civilian employment environment that does not have a focus on combat life and death, but rather an emphasis on long term thinking, collaboration, viewing actions with respect to the impact on internal and external customers and politically correct human resource considerations.

The assumption on the part of the employer is that the strength and training of the individual coming out of the military environment permits a reasonable transition. It does not.

We Must Educate and Develop Programs to Bridge the Gap from Both Ends.

A transition partnership between the veteran and the company is necessary. Expectations must be adjusted to reflect the differences in both venues.

Military core values such as – oaths, the Uniform Code of Military Justice (UCMJ), a culture of direct command, and a narrow focus on the task at hand are no longer available when the veteran leaves the military. 

In the civilian environment political correctness, strategic group awareness, tact, organization factors, and a broad view of mission and achievement are required.

A veteran is therefore is not so much entitled to a job as he or she is entitled to be understood, and to be allowed to understand the civilian job environment, growing into it.

Professional Roles are Vital

There are two important types of professional roles to consider when hiring and managing military veterans in the business venue.

As a veteran who made the transition to civilian professional work and ultimately owned a small enterprise, and as a counselor who supports veterans in becoming business owners, my experience over several decades indicates military men and women do well in Role 1 below. They have the most challenges with Role 2.

Role 1 Technical - Scientific, engineering, logistics, electronics, design and similar skill sets where direct supervision, team building, corporate policy compliance and human resource planning and utilization are not major factors.


Role 2- ManagementFunctional process capacities responsible for hiring, evaluation, supervision, compliance with civilian law and department activities involving group dynamics, customer relations and sensitive human factors.

Image: The Military Wallet

I came out of the military having had a leadership role in engineering, base development planning and combat support. I served in war zones in Southeast Asia and on highly classified missions. I was not a manager. I was a military leader in specialized skill sets under Role 1 above.

I knew how to direct people who followed orders without question because the Uniform Code of Military Justice to which we swore an oath said they must do so.

I felt uncomfortable in jobs involving Role 2 above because they were foreign to me. I later adjusted, learned the venue and became skilled as a manager in the corporate world. I preferred staff assignments, however for most of my career.

The corporate venue seemed enormously political and bureaucratic to a former war fighter like me. I was not that tactful. I cut to the chase often and did not always take everyone with me when I made a decision.

Once I grew into a Role 2 performer, I found in interviewing, hiring, evaluating and managing young veterans, even seasoned ones, who had retired and joined the civilian work force, that almost all were better suited for Role 1. It took years and effort on my part to fit them into Role 2 and some never made it.

Management Analysis  and Moving Forward

The principal reason for the logic conveyed above is that the military environment may seem to be structured in a way that fits Role 2, but the military does not turn out individuals who are suited in the knowledge and experience necessary in the civilian environment and they are not very good at it without extensive training and adaptation.

Enterprises have multiple-faceted challenges and they require multiple- faceted people. Even though individuals may hold a specific position job title, success in the civilian work force demands avenues where the human resource can contribute in multiple ways.

If a contributor has experience and training in several areas the business can utilize, that makes him or her a valuable resource and it is likely they will be professionally fulfilled and rewarded from doing so. Military personnel have specialty training and focus; few have a wide view of what is in front of them, particularly with respect to military vs. civilian professional settings.

It all comes down to the workers having an element of control in the future success for both themselves and the company and having the opportunity to realize their potential in that regard.

If the professional is in a narrow, technical discipline and his or her expectations are to have others support them in that role or if they are more comfortable in a "Stove-piped" professional setting and not attuned to group dynamics and the often politically correct nature of the civilian organization, they perhaps belong in technical roles and they do not belong in management roles at the onset of their employ.


In fairness to veterans and to our hopes for them in the future, we must understand these above distinctions, build on Role 1, understand the risk in Role 2 and assist wherever possible.Above all,  a respectful partnership and realistic expectations must evolve between the veteran and the company for success in transitioning  former military personnel into the civilian work force. This must be achieved through education, training, communication and assessment of both the veteran and the company personnel.

About the Author: 

Ken Larson is a 2 Tour US Army Vietnam Veteran, retired after 36 Years in the Defense Industrial Complex, having worked on 25 major weapons systems, many of which are in use today in the Middle East. He concluded his career with his own consulting firm. As a  MicroMentor Volunteer Counselor Ken receives many inquiries from small companies wishing to enter or enhance their position in federal government contracting. 

Thursday, May 11, 2023

Your Capability Statement For Small Business Federal Government Contracting


Federal government contracting is all about relationship development.  Marketing to influential agency personnel, industry partners, prospective team members, employees, associate contractors and others who can help you requires a hard hitting synopsis of what your firm brings to the table.

Place into a capability statement (CAPE) the specific information others need to know for a sound decision about your company qualifications. This information includes such items as a D&B Number, government registration numbers, North American Industrial Classification System (NAICS) codes and the like. These items are elected or determined when you register your company for government contracting.


An electronic capability statement (CAPE) for government contracts should be short and hard-hitting. It should be 1 -2 pages and should highlight the salient points of products and offerings, personnel and qualifications.

Below are examples of two good capability statements in the public domain.  The first is a services company, the second example is for a company selling off-the-shelf products.




A good CAPE  will be a promotional brochure that on paper and through the electronic media advertises who you are, what you do and why the government or prime contractors should buy from you. Major elements of your capability statement, in addition to your small business designation and certifications, are as follows: 

(1) Company overview

(2) Supplies and services description couched utilizing your marketing ideas and strategy.

(3) Past performance of your enterprise or your personal background and qualifications 
(experience, education, etc.).

(4) Facilities or capabilities overview (How you perform your service couched in a manner that will appeal to your target market).

(5) Explanation of the positive results the client should expect.

(6) Points of contact and ways to contact you for meetings, placing an order and contracting your services. 


The document itself should be created with graphics, photos, themes and sales pitches. A picture of your product and your personnel adds dynamics. 


Your capability statement should be distributed on paper to your target market as a brochure, emailed as an attachment and linked into related industry web sites or partner marketing to get the word out about your product or service. Your CAPE targets contracting officers and prime contractor buyers who are seeking to fulfill their small business buying goals. It is a way to get you in the door and speak to, or correspond with, the management and technical personnel who are the decision makers in sourcing small business buys. 

A good quality CAPE is the spearhead of your marketing campaign and your visual image;  focused and direct, it must be informative, concise and a snapshot of the very best you can offer.

Monday, May 8, 2023

Your Small Business Government Contracting Business Plan

Infrastructure funding, world events and the fast pace of technology are venues in which federal funding programs are enacted, grown and made part of the culture.  

They are on the way.  There will be dramatic roles for small business. 


 When visiting the SBA website on business planning, there are major topics in the business planning process which, when addressed in a plan, will insure the success of an enterprise and assist  in determining and supporting the amount of funding needed. SBA Write a Business Plan

This discussion addresses the unique aspects of federal government contracting that will yield a successful plan and more importantly a successful execution of that plan in the federal contracting venue.  

Marketing, advertising, competitor analysis and financing must be addressed.  Free articles on strategic planning and developing a marketing plan are at the “References” Box Net Cube at the top right margin of this site. They address evolving an operations vision for an enterprise showing its potential to present to a banker or to an investor.

Here is a site with free business plan samples:

Business Plan Sample

It may assist in visualizing business growth to look at an example of how someone else addressed a given topic.


Product entrepreneurs all face the same challenges. Those who succeed recognize they need to visualize themselves in the product development business, structuring an enterprise, generating a business plan, protecting intellectual property and then seeking industry partners and investors to bring the product to market.

In the process, copyrights, patents and royalty issues may come into play and development and distribution agreements are formed. Pricing is finalized based on cost and expense projections and competitive factors unique to the company as negotiation results are achieved with industry teaming partners, developers, manufacturers and distributors.

Service contracting to the federal government is a natural venue for small business. It does not require a product with a niche market or capital intensive manufacturing facilities. Service contracting does require skilled management and labor resources capable of performing a scope of work for which the government has identified a need and for which outsourcing to an industry contractor has been selected as the means to fulfill that need. The venue demands strong human resources management, industry teaming and an enhanced business system to price, account and bill on a job cost basis under government service contracts.


Utilize the below link to register your company.  It provides excellent guidance and background, as well as access to the PDF file on NAICS Codes which are critical for you to choose before you begin the registration process.  Give these some careful thought when selecting them.  If there is a chance your firm may wish to be involved in a field, put the code in your registration.  No one will question your qualifications at this point.  That comes later during proposals. 
Note the requirement for a DUNS number up front.  You may already have one.  If you do - use it.  If you do not, follow the instructions on obtaining a DUNS free at the Dunn and Bradstreet web site.  
When you have completed your registration at the link below you will received a Government CAGE Code, uniquely identifying your firm and its location as a government contractor. 


As a small business becomes known in the federal government contracting community, successful marketing of sole source or group-designated business becomes easier, but it is always a challenge due to the need for taking early action in windows of opportunity. 
Find those windows and communicate capabilities to the decision makers and industry team members who can help you.  
If you are eligible for set aside designations make small business set asides or sole source procurements key elements in your marketing plan. 


Be straight-forward and honest with  industry teaming partners.

Do not violate share arrangements, teaming agreements or non-disclosure agreements. Such violations are a death knell for your reputation in the business.

Do not become known as a resource raider by hiring away from other firms with whom you have teamed.

Give it a best shot as a prime or a sub but involve the government contracting officer to resolve industry teaming disputes that may damage a past performance record.

Exclusivity is the practical way to go on any given program. Team early and exclusively and be a winner. 
Reputation is key, ethics count and  customers as well as the industry are observing.


Waiting for a contract award to achieve a government contracting business process is not advisable. A win may not happen at all without addressing the structure and process requirements in your proposal to convince the customer his business environment is understood.

If one is not prepared in advance and one is fortunate enough to win, then in a very short time frame one will have to evolve a business system to perform on the contract and submit a billing

This article will discuss a framework for a small enterprise to develop a business system in service contracting, which is the most frequent venue utilized to enter the government market.


Government contract proposal preparation is time consuming and can be costly. Meeting the agency Request for Proposal (RFP) requirements with a responsive proposal can be well worth the effort if a winning strategy can be formulated. When considering submitting a proposal to a given government solicitation, conduct a bid/no bid exercise.

By going through that process  a company  begins formulating your win strategy or it will discover that it should not bid this job for lack of such a strategy. The elements of the process are discussed below in the form of questions to ask  against topics for key consideration

This article offers guidance as a template to apply marketing operations for accommodating federal government contract proposal preparation. Proposals are special, sometimes exhausting projects, but a necessary part of doing business with government agencies. Like many other aspects of business, the more proposals that are prepared, the more that is learned and the more one can borrow from past practice for the next one.


Strategic thinking must be applied to structuring a government service contract project management capability in your company. It must involve long term planning and designing a business system as well as establishing rates and factors to bid new work and control it while interfacing with the customer.

When one plans in detail to define the product or the service one reduces performance risk. 

The project management challenge is not to launch significant and costly resources before the specification for the product is sufficiently defined, obviating the need for costly revisions or abandonment, yet knowing when the product definition and plan are suitable for release.

Good project management starts early.


Consider the advice herein when developing and maintaining your business plan. Overlay approaches unique to the company against the guidance offered and place it in the standard format for business planning.  It will yield a road map for success and can be further evolved for growth.

For additional  details on these topics and other important information in developing and executing a government contacting plan, download the free books and supplements available in PDF format at the “Box” in the top right margin of this site.

Seizing the Moment