"In my opinion, the Board once again showed its utter disdain for the little guys and gals of the world."

Slice of pie

Give the little person a slice of the pie!

by Joseph Hawkins

On Tuesday, February 10, 2015, the Montgomery County Board of Education hired Hazard, Young, Attea & Associates (HYA) to search for a new superintendent for the Montgomery County Public Schools (MCPS). HYA will be paid $35,000 for its work. HYA is the same firm that conducted previous MCPS superintendent searches.

The Board awarded the HYA search contract without a competitive bid process. In my opinion, the Board once again showed its utter disdain for the little guys and gals of the world.

Since 1998, I’ve worked as a research contractor. I’ve lost track of how many contracts I’ve bid on, but to make things simple, let’s just round up and say I’ve been involved in over 100 competitive bids. The bids have been both small and large. The bids have included governments (local, state, and federal), foundations, and private companies.

Over the years, I’ve noticed that some government agencies take competitive bidding very seriously, including making sure that small, women-owned, and minority-owned businesses receive a fair share of the contract dollars awarded.

I once had a contract with the state of Pennsylvania and the state required me to share 25% of the contract dollars with a pre-approved minority-owned business. I ended up using a certified small-business located in Washington, D.C., owned by a black woman (this business also was certified in the state of Pennsylvania). A multi-million dollar contract with the federal government required me not only to have annual goals with a pre-approved minority-owned business, but I had to submit to the feds each year proof that I spent what I had agreed to spend with the minority-owned business. For this contract, I ended up using a certified small-business located in Silver Spring, Maryland, owned by a black man. In the end, both of these black owned businesses ended up with a fairly substantial slice of the contract pie.

In all honesty, I have learned that while it takes a little extra energy finding small-businesses, in the end, it has always been worth the extra time.

I’m totally disappointed that our Board of Education seems so calvalier about bidding contracts. At the end of the day, I believe HYA should have competed for that $35,000. And if our Board was serious about sharing the pie with the little guys and gals, it might actually award extra bid points to bidders that involve minority-owned businesses.

And why is competitive contract bidding some critical for small businesses, especially the women-owned, and minority-owned businesses? Because believe it or not fair and open competition is more likely to level the playing field for such businesses.

Below, is a 2010 interview I conducted with a black woman who owns her own small research firm. I think this person helps us understand why competitive bidding is so critical to the survival of such companies.

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(Note: This interview first appeared in the Rockville Patch newspaper.)

In 1998, when I resigned my Montgomery County Public Schools job, I went to work for the American Institutes of Research. When at AIR, we hired Crecilla Cohen Scott to work on a testing contract AIR held with the School District of Philadelphia. Crecilla was one of the smartest young researchers I had ever come across. She always had an uncanny instinct for asking great questions, and she could crunch numbers with the best of them. Since 1998, we have remained friends and colleagues.

Departing AIR in 2000, Crecilla took her skills to the U.S. Census Bureau. After working there for several years, she went into business for herself, establishing Infinity Research in 2007.  Infinity is a women-owned research social-science company. The company also is certified as a small disadvantaged business. Infinity is based in Bowie. Crecilla is African American.

Like all research firms, Infinity survives by bidding on what we in the industry call requests for proposals (RFPs).  Coming from both government and non-government entities, RFPs are a lifeline to business contracts, and they are the difference between staying profitable—surviving—and going out of business. For the most part, governments are extremely open and transparent when it comes to contracts, RFPs, and the bidding process. This openness—when it is consistently present—aids the “little guy,” including small businesses like Infinity.

Probably once a week, Crecilla and I talk shop. When we can partner, we partner—I personally believe in sharing the pie with the little guy. For example, several years ago, I used Infinity to help put workers on the ground so Prince George’s County Public Schools could restructure its database for the homeless students the district serves. And so I thought it was worthwhile to ask Crecilla a few questions about why being open and transparent is critical to small businesses and their ability to remain profitable. My questions and her answers (gathered via email and over a face-to-face lunch) appear below.

Question: In your opinion, as a small business, why is an open RFP process so critical to staying afloat?

Answer: An open RFP process is essential to small businesses because it provides an opportunity for us to showcase our capabilities, competitively bid on work, and increase awareness of our products and services. An open and transparent RFP process opens up the market and helps to level the playing field. Without an open and transparent process, many small businesses find it difficult to compete and generate sufficient revenue to remain profitable.

Question: Recession or not, it is my experience this region continues to spend money on research contracts. For a small research firm, what are some of your biggest challenges when trying to obtain contracts?

Answer: Our biggest challenge is establishing a professional relationship with decision-makers and building trust. Larger companies have the advantage of name recognition and long-established working relationships with government agencies. When decisionmakers are unfamiliar with a smaller company’s work, it is particularly challenging to establish trust. We have several clients that have provided repeat business, but in the beginning, there was a lot of work that went into establishing the relationship. We definitely benefit from and rely on partnerships with larger companies to build our portfolio—it adds to our credibility and helps build trust.

Question: Do you have any horror stories about bidding on contracts in this region? Perhaps a situation where it looked like an agency wanted a small business, especially one owned by a minority, but then at the last moment, the contract was awarded to someone else?

Answer: Once, we were asked to bid on a project that had the potential to generate significant revenue. We were awarded a very small contract to develop a high-level “blue print” (or Phase I) of the larger project. After delivering the “blue print,” we thought we would be a natural fit to be awarded the larger contract (or Phase II). As it turns out, the agency decided to go with a large company to execute the work that we designed.

Question: Just thinking out loud here, if you could sit with government officials and give them advice on how to making the bidding process work better to the advantage of small businesses, what are some suggestions you’d offer?

Answer: I would suggest that officials take the time to reflect on the value that small businesses bring not only to each project, but also to the U.S. economy. According to the U.S. Census Bureau, small businesses employ half of all (private sector) employees, generate 65 percent of new jobs, and pay 44 percent of U.S. private payroll. We are an important part of the U.S. economy. It is critically important to understand that small businesses have the ability to provide quality products and services. Given the opportunity, I would suggest that officials reduce the paperwork required to submit responses to RFPs. A simplified, on-line submission process would be more efficient and it would reduce the number of hours needed to competitively bid on projects. Also, I would suggest that officials increase the incentives to larger companies to partner with small businesses. Sometimes, the “piece of the pie” is so small, we wonder if we will make it another year.