Contract process full of pitfalls for small firms

Government specifications, timelines often overwhelming

Valerie Lilley‘s Navy coat contract was part of a government set-aside program aimed at growing small businesses. Since 1997 Congress has had a goal of awarding 23 percent of government contracts to small businesses.

But a study by a business credit card unit of American Express found that on average it takes a small business nearly two years of trying before it wins its first contract.

n this sputtering economy, the situation Toluca Tailoring found itself in wasn’t uncommon. Small businesses are more likely to count on winning a single big order after they run out of options, said Scott Testa, a professor of business administration at Cabrini College. That’s why he said small businesses should carefully read a contract to account for any potential payment lags.

“Some of these decisions that may be important from the small business owner’s perspective may not be a priority for these huge government agencies,” Testa said.

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