Your manager has informed you the company needs to consider small businesses as part of the contract solicitation process. Your company has just recently been asked to perform services for a government agency and consideration for small business participation in your company’s subcontract awards will be part of your company’s proposal to the agency
Using information from an Internet search on small business administration, discuss the benefits of considering small businesses in government contract solicitations, including the following:
What benefits can be expected by your company if small businesses are considered in the subcontract solicitation process?
To what extent will adding these requirements mean additional costs will be incurred in administration and reporting of compliance?
Very few businesses have all the resources they need to accomplish all the tasks that they encounter. It is not unusual for a company to realize that it does not possess the required expertise within its ranks to achieve the needed results. Based on this fact, the management is tasked with the responsibility of soliciting for specialized external suppliers in particular fields to accomplish the task and at a cost that is lower than if the company could have done it by itself. This is what is meant by subcontracting. As a possible option, the company looks for a small business that has the capacity to bridge the gap where it is disadvantaged.
A company considering subcontract solicitation process stands to benefits in variety of ways. They get the empowerment to take on projects that are more complex for them to handle by themselves. Additionally, the business earns a profit from sections of the project that the subcontractor has handled and this ensures that they grow their overall revenues substantially. Nonetheless, the parent company must first ensure that all the loopholes are sealed to avert the high risks that are associated with large projects. The risk of substandard performance by a subcontractor and coordination can be a big headache to the parent company. As a result, the company must ensure that it asks for sufficient revenue for worthwhile profit realization (Grandori, 2013).
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