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How to Select a Value-Add Test & Measurement Supplier

How to Select a Value-Add Test & Measurement Supplier

Prime contractors are those companies that work directly with the federal government, and in this capacity the projects they service can often be very significant, long-term programs. In 2019 federal contract spending was nearly $600 billion, mostly from the Department of Defense.

To make it possible for small businesses to have a realistic opportunity to compete for these contracts, and to encourage a strong supply base, the US Small Business Administration (SBA) established “small business set-asides.” These set-asides are designated for companies that meet certain socioeconomic criteria, including small businesses, HUBZone-certified small businesses (businesses that operate in Historically Under-utilized Business Zones), Women-Owned small businesses, and Service-Disabled Veteran-Owned Small Businesses (SDVOSB).

The requirements of these set-asides depend on the value of the contract and break down this way:

Contract Value

Small Business Set-Aside Requirement

$3,500 - $150,000

Automatically and exclusively set aside for small businesses

$150,000 or more

Set aside if there are two or more small businesses that could do the work.

$700,000 or more

If not set aside for small business, must have a subcontracting plan if awarded to a non-small business

$1.5 million or more

If not set aside for small business, must have a subcontracting plan if awarded to a non-small business

     US Small Business Administration

 

These set aside requirements add to the challenges facing procurement professionals who are tasked with not only finding and sourcing the right technology solution, but doing so in a way that satisfies the SBA’s goals. After 16 years of working with prime contractors, TEVET has had the opportunity to work with hundreds of procurement professionals on projects large and small. Here are some best practices we’ve observed over the years about what is important when considering a small business procurement partner.

 

Find a Small Business Partner that Doesn’t Act Like a Small Business

First, it’s important for a small business partner to be in a financial position that can support multi-million-dollar programs. It’s also necessary to have sophisticated technology and systems in place, and small businesses don’t always have access to the enterprise tools like their larger counterparts. The benefit of working with a small business goes beyond just checking the SBA box; it also comes with the ease of working with a small business. Having a dedicated team and regular, familiar contacts mean the procurement partner can respond appropriately when things come up. A larger organization might not be able to move as quickly or be as familiar with your business. The difference between being able to call someone directly when an issue comes up versus calling a general 800 number could mean the difference in getting an immediate response and waiting days for an answer. For mission-critical government programs, time is virtually always one of your most valuable resources, so sitting around waiting for a response can be very damaging to a project. At TEVET, we pride ourselves on being responsive to the needs of the customer and our responsiveness has garnered us industry-wide recognition from the customers we support. Our customers have dedicated teams that they come to know and trust, and these relationships set us apart in the industry.

Beyond those benefits that come from working with a small business, there are some very practical benefits that come from partnering with a procurement expert that is also a HUBZone-certified small business and an SDVOSB. Obviously being able to meet multiple SBA requirements with a single supplier simplifies the buying process, but there’s also the benefit of knowing you are supporting the economic development of an underutilized area and contributing to the growth of underserved communities. Prime contractors are interested in working with HUBZone certified companies, but, beyond simply meeting the requirement, they want to know the partner is genuinely engaged in their communities.

 

Find a Vendor that Can Consolidate Purchasing and has Access to the Right Solutions

Second, the cost of procurement is high and trying to manage the process internally is disproportionately costly. For large government-focused programs, it’s not uncommon for each project to require hundreds of individual components from dozens of manufacturers. Managing this internally would require an individual purchase order (PO) for each element, plus the logistical headaches of managing each item. Between the overhead of having dedicated procurement staff and the processing costs, from beginning to end, it might cost hundreds of dollars per PO to handle this in-house. Multiplied across a few dozen POs or more and the cost gets out of control fast. Reducing all of these POs to a single order means resources can be dedicated to areas of the business that drive innovation. Consolidation also cuts down on poor utilization of expensive engineering talent. Having an engineer spending time tracking down the equipment they need to build a system instead of actually building the system is highly inefficient.

Finding a small business partner that can work directly with OEMs as well as their authorized distributors is also going to increase the number of solutions and purchasing options available. Instead of just going to a single distributor and hoping they can provide everything needed, by expanding your supplier network you can increase the odds of finding what you need when you need it. The relationships TEVET has formed across the Test and Measurement industry allows us to have access to the largest selection of in stock equipment.

 

Find a Partner that is a Authorized

Finally, authorized suppliers can offer advantages because they have contractual agreements with manufacturers that can translate into lower prices, increased technical support, identical warranty offerings, and other benefits. But one of the challenges for procurement professionals is not always having insight into which suppliers are authorized. They are looking for the tool that will do the job and whether or not the manufacturer is an authorized supplier might not even be considered. Purchasing from an unauthorized supplier means you're almost guaranteed to pay a premium, as much as 30 percent more. Your warranty may be compromised, or the small business supplier might not have the financial stability to support the purchase in the first place. Another potential issue is managing all of the quality requirements that need to be reviewed for each order. Unauthorized suppliers may not have an adequate system in place to review these, if they get reviewed at all. TEVET has a dedicated quality team that makes sure all requirements are properly reviewed from every supplier we work with.

Selecting and acquiring the right technology to meet your specific challenges requires a partner that can add value every step of the way. TEVET brings years of experience to the acquisition of technical products, systems, and instrumentation - with support from identification to sustainment. Protect your project by selecting an acquisition partner with the foundation, processes, and certifications in place to meet your requirements now and in the future.

If you’re interested in learning more about TEVET, or have a procurement challenge, we’d love to hear from you.

 

For more information on how TEVET adds value to System procurements check out:

Deliver Fully Capable Test Stations Without Costly Overhead Blog.