For St. Louis-based Pangea Group, government contracts are its lifeblood. The environmental and remediation construction company has flourished catering to agencies such as the Department of Defense, Department of Energy, General Services Administration,and various Army and National Guard entities nationwide. Last year, the company reported revenues of $31 million, 70 percent from federal contracting.
Michael Zambrana, Pangea Group's CEO, says his company's path to procurement success was paved with a series of Small Business Administration-endorsed mentorships with larger government contractors such as The Washington Group International and the company's current partner, The Shaw Group. Through such mentorships, the company was able to gradually increase its knowledge of the procurement process.
"Working for a large defense contractor, where they will flow down certain provisions of the government contract, is like dipping your toe in a little bit at a time as opposed to diving in head first," says Mr. Zambrana, whose company is No. 145 on the Hispanic Business 500 directory of largest Hispanic-owned companies and a member of Hispanic Business' Redwire network. "It gives you a look at the process and requirements before actually getting into the contract itself."
Pangea Group is one of thousands of Hispanic-owned companies competing for a slice of federal funding each year. And the competition is fierce: From 1996 to 2001, the percentage of federal contracts awarded to Hispanic-owned companies fell to 24.4 percent from 27 percent – an estimated $370.5 million less.
Still, some Hispanic-owned businesses such as Pangea Group have learned how to tap federal dollars consistently, and say the learning process is key to success. Mr. Zambrana says mentorships have been an invaluable part of that process. The best mentorships, he says, are based on genuine concern, providing advice and comfort for first-timers dealing with what can seem like overwhelming requirements of filling a government contract. Still, he suggests businesses considering such mentorships should develop legal agreements with their mentors to ensure everyone benefits.
"You have to have a formal written plan, especially with larger companies. If you don't have a contract, good intentions could be lost," says Mr. Zambrana. "[But] if you do it right, you learn a new trade, you get to exercise the new trade and the government wins a new subcontractor."
Mr. Zambrana also recommends business owners stay current on procurement policy and spending trends by getting in touch with national organizations like the SBA or industry-specific organizations like the Society of American Military Engineers, which offer members insight into upcoming contracts and trends.
Matthew Martinez, CEO of Networx Inc, a New Mexico-based information technology services provider that has contracts with Los Alamos National Laboratory, White Sands Missile Range, and The Department of the Air Force, agrees with Mr. Zambrana.
Mr. Martinez, whose company had revenue of $6 million last year ranking it No. 476 on the HB500, credits the SBA and the 8(a) program with putting him in contact with key decision makers at federal agencies, and he says mentorships have given his company new access to contracts worth more than a half-million dollars.
"We're looking at contracts where we can provide tech support to different facilities nationally. We're looking at 50 to 100 technicians on a site as opposed to 5 to 10, as well as having a large company supporting us with their resources," says Mr. Martinez, whose company also is a member of Hispanic Business' Redwire network.
He suggests businesses seeking government contracts maintain aggressive marketing on a national scale, and hire employees with previous experience working for federal agencies or dealing with the complex procurement process. "Sales is about relationships; it's about being able to work closely with our customers, and it's about gaining their trust. The biggest thing that helped us was persistence," Mr. Martinez says. "My first real contract took about four years and that was [after] actively marketing almost on a daily basis."
Joseph Diamond, director of the Air Force Office of Small and Disadvantaged Business Utilization, says marketing efforts and a strong written proposal are two of the most overlooked tools businesses can use in their efforts to win contracts.
"Marketing is one of the greatest challenges that small businesses don't really recognize," says Mr. Diamond. "Market your capabilities to small business specialists and then write a proposal that answers fully and completely all of the solicitations the agency is looking for. That will make it a lot easier to compete."
Like Mr. Zambrana and Mr. Martinez, Mr. Diamond says businesses also should start by bidding to become subcontractors for larger, more-established government contractors. It's a move, he says, that allows businesses to focus on developing a track-record of dependable performance.
"The best way to enter is to really network with similar large or small businesses that have contracts right now, and work-teaming abilities," says Mr. Diamond. "Become a subcontractor and get some experience. We focus on [businesses] with experience with federal contracts and a good past performance record."
View the Hispanic Business Mentorship Assistance Guide >>
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