Small business has a place in Massachusetts

Before an audience of more than 1,000 people, Sen. John Kerry, Gov. Deval Patrick and Mayor Thomas M. Menino publicly pledged their support for small businesses in Massachusetts during the second annual Procurement Conference and Business Expo, held at Northeastern University’s Curry Student Center.

The conference was designed to help Massachusetts small businesses obtain federal contracts and included contracting officials from federal, state and local government procurement offices. Also included were hospitals, colleges and universities, as well as independent franchisers. Several banks and other lending institutions were available to discuss loans and financial structuring.

Kerry, chairman of the U.S. Senate’s Small Business Committee and co-sponsor of the conference, made it clear that the future of the state’s economy lies in the hands of small business. Roughly 98 percent of the state’s companies with employees — 175,000 out of 179,000 — are small firms, he said. They earn the state $30 billion a year in tax revenues and employ about 1.5 million people.

“Prosperity doesn’t happen by accident,” Kerry said. “The reality is that the supposedly ‘invisible hand’ of economic growth has never been quite so effortless. It has always taken tremendous effort from the entrepreneur to be in the right place at the right time to be pushed along by it. We’ve always had to fight to level the playing field, and we still have to work to maintain fair competition.”

Toward that end, Kerry wants to increase federal contracting opportunities. A big part of that is enforcing rules protecting small businesses that are already on the books.

“The only way that’s going to happen is through aggressive oversight of federal agencies until they meet their contracting obligations under the law,” said Kerry. “There’s been fraud and abuse, and that needs to end.”

According to the senator, fewer than 20 percent of federal contracts are going to small businesses, and nearly $2 billion in federal contracts that should have gone to small businesses went instead to large companies. Kerry also noted that growing small business is one of the best tools to develop and improve underserved communities.

“Minority entrepreneurs are among the fastest-growing businesses in the country,” said Kerry, pointing out that minorities, women and veteran entrepreneurs are still far behind. “We need loan and counseling programs to bridge the gap.”

When Patrick took the stand, he put some of the focus on the state’s young people, encouraging them to explore their own small business dreams in Massachusetts after they graduate from college “because this is where the action is.”

Patrick mentioned that the state has $3 billion to $5 billion in open contracts and pledged to cut down on paperwork to help improve the access for small businesses to government contracts.

In addition, Patrick’s office issued a statement announcing it was formulating a Small Business Incentive program, which would reserve a portion of state procurement funds for small firms, with emphasis on businesses owned by minorities and women.

“It is our goal to help you understand the contracting system and help you cut the red tape, so you can do your best [to] provide top-notch goods and services, create jobs and drive our economy,” said Kerry.

In a related matter, Patrick plans to begin modernizing and reforming the Commonwealth’s procurement process to simplify how businesses participate and expand the pool of companies who compete to provide Massachusetts with goods and services.

Currently, Massachusetts has more than $4.1 billion in open contracts, doing business with thousands of firms who provide goods and services each year. The bidding process is competitive and open but very cumbersome.

“The success of small businesses is critical to the future of our economy. We want to expand opportunities for them, too,” Patrick said. “A more business-friendly procurement process means requiring fewer forms and making it easier and faster for businesses to sign up and compete.”

Patrick has directed the Operational Services Division of the Executive Office of Administration and Finance to streamline the procurement process by eliminating redundant or unnecessary forms used by businesses to become eligible to participate. The state will also expand the use of online registration and bid submissions and simplify the bidder response requirements.

The administration is also formulating a Small Business Incentive program to encourage locally-owned small businesses to participate in the bidding process in order to provide to the Commonwealth a range of goods and services. This sort of small business certification program would reserve a portion of state procurement funds for small firms in the Commonwealth to encourage their participation. Doing so would give a boost to entrepreneurs and positively impact many businesses owned by minorities and women. Eight other states, including Illinois, Georgia and New Jersey, already have similar programs in place with preferences ranging from requiring all statewide contracts to include at least one certified small business to sending all small procurements of less than $50,000 to at least one certified small business.

Under the governor’s plan, a small business would be defined as an independently owned Massachusetts-based company employing less than 25 people and having gross annual revenues less than $10 million.

The administration also is expanding business procurement training for businesses statewide to better explain how to do business with the Commonwealth. The free workshops will be held in every region of the state with the intention of increasing the number of potential state vendors — large and small. The first workshop, “Pathways to Procurement,” already is sold out, with 50 firms booked to attend the Feb. 14 session on how to find bidding opportunities and how to use the Commonwealth’s Procurement Access and Solicitation System or Comm-PASS electronic procurement system.