Greater pressure on the federal government to offer more contracts to small companies is leading to an increased need for large and small PR firms to work together to stay competitive.
In July, the Small Business Administration said the federal government failed to meet its goal of awarding 23% of its contracts to small businesses in fiscal-year 2012, though it was close at 22.25%. That's up from 21.65% in 2011.
To meet its quota, it's likely that there will be even greater pressure from the government that small companies work on communications contracts. However, there may not be enough eligible companies to receive contracts for other types of work, said James Krol, executive director of the Small Business Government Communicators Network, at a recent Industry Leaders Teaming panel discussion. For instance, there may not be many small companies that can build a fleet of planes, he noted.
There is already evidence of this procurement method. At the end of fiscal year 2011, 32% of government communications contracts went to small businesses, compared with 21% of all federal contracts, according to the Small Business Government Communicators Network.
The mandate to work with small contractors is not only the responsibility of the US government. In some instances, large firms are expected to sub-contract smaller companies after they win work. Potential partners include women-owned, multicultural, and veteran-owned companies.
On the panel, representatives from the Ad Council, Booz Allen Hamilton, FleishmanHillard, Porter Novelli, and PricewaterhouseCoopers shared what they look for in these instances.
For Fleishman, which has worked with federal departments such as Health and Human Services and Treasury, there is the expectation that small companies will approach them with a concrete understanding of the client need and clearly articulate how they can meet it.
“If you're looking to grow, really to partner and not just a handout, we will be interested in partnering,” said Patricia Lomax, SVP of government contracts at FleishmanHillard. “That's what ruins the whole thing for me, when people are just looking for handouts.”
While many connections are made via cold calls, some large entities have formal channels in place to establish teams. For instance, Booz Allen Hamilton has a web resource that allows a small company to register as a potential partner. However, companies need to put in a bit of elbow grease to bring potential working relationships to life. This involves networking and building relationships with people within the company.
“You don't want to register and then just sit by the phone,” said Shawn Ralston, mentor-protégé program manager at Booz Allen. “If you're going to sit and wait for someone to call, you might be waiting a while.”
On the flipside, it's becoming increasingly common for business to be awarded to small firms. In such an instance, it is the larger companies that need to reach out.
Panelists expressed varying levels of comfort with being put in this position. Lomax said for her firm, “business is business.”
At Porter Novelli, “it's been a tougher sell,” said Rosy McGillan, an EVP at the firm. She noted that for an agency that does it all, it must come to a decision on whether it makes business sense to work on projects where it does not have control.
“However, because there is a lot of business value in being a sub, we're doing that more and more,” she added.