Is Certification Right for Your Shop?
Although obtaining government certification can be a hassle,
When you notice a government-marked automobile pass you on the highway or park next to you in a parking lot, do you ever pause to consider who might be responsible for maintaining and repairing these federal, state and local government vehicles?
In many cases small, independent automobile shops – just like yours – provide federal agencies and state and local governments with year-round fleet maintenance and repair services. Governments frequently outsource these critical vehicle services to contractors rather than self-performing the work.
For example, in 2011 the United States federal government spent approximately $41.4 million on annual vehicle maintenance and repair (excluding body work) for its automobiles, vans and light trucks, according to www.usa spending.gov, and by congressional decree 23 percent of all federal contracts are mandated to go to small businesses.
If you are a shop owner interested in cultivating government customers to diversify your client base or develop new sources of revenue for 2012, one of your first considerations should be whether or not your independent business qualifies for one of the many government certifications designed to help small shops expand through government contracting.
“These certifications can help your automotive shop overcome some of the limitations of being small or disadvantaged,” says Roger M. LaPlante, president of the Leesburg, Va.-based consultancy, Government Certification Specialists Inc. “For example, some of these certifications allow your contract bids to be priced slightly higher than the bids of the larger corporations that bid against you, giving you a competitive edge over the larger companies so that your small size is no longer a detriment to winning a fleet maintenance contract.”
Common government certification categories include:
Government certifications for small businesses are available at the federal, state and local government levels including through particular towns and municipalities; the options available to your automotive shop will vary from state to state in terms of what each certification is named and what benefits are conferred by each certification.
In addition to special pricing allowances when bidding on government work, other benefits of small business certifications can include being listed in exclusive government databases (so your company springs to mind first whenever government buyers have new automotive maintenance and repair requirements); access to special training sessions and networking workshops that allow you to meet government purchasing personnel face-to-face; and the ability to bid on special opportunities that are “set aside” for small businesses only.
To begin your search for certifications you and your auto shop might qualify for, visit the U.S. Small Business Administration website (www.sba.gov), which describes federal small business certification programs and their eligibility rules.
For example, for federal programs such as the minority-owned small business 8(a) certification and the Woman-Owned Small Business (WOSB) or “8(m)” certification (both of which are named after different clauses in the federal Small Business Act), your automotive service shop will have to prove to the government that 51 percent or more of the shop is owned and controlled by one or more eligible individuals in order to qualify.
To locate state-level certification programs you might be eligible for, visit your state government website (the Internet address of which is typically www.state.gov) and select the “Business” tab, then drill down to the small-, woman-, veteran- or minority-owned business pages for certification rules and requirements.
You can also visit your local SBA office or state-level economic development department to receive additional information about government small business certification options in your state. Another free government resource for information about small business certifications is your local Small Business Development Center (SBDC).
Be sure to also check your county, city, school board, water district, and other local government websites for other certification options that might apply to your shop; even water districts and school boards possess fleets of passenger cars and vans that require continual service.
Once you know which government certifications you are eligible for and want to apply for, begin locating, copying and organizing your company documents so that you can begin to file your applications. Most applications will take several weeks to several months to be processed.
“Because the paperwork requirements and eligibility reviews for government small business certifications can be intensive, plan ahead and budget enough time to find your company formation records, tax returns and financial statements, all of which will likely be needed for your certification applications,” advises LaPlante.
“Although there is some effort and even some annoyance involved in applying for these designations, they are often worth it. A small business certification indicates to regular and government customers alike that your company has been vetted thoroughly by the government to receive the certification, and as such it indicates your shop is stable, professional and ethical enough to be included in a government certification program,” continues LaPlante.
In addition to pre-qualifying and serving as a stamp of approval for your independent automotive service shop to perform government work, small business certifications operate like a “license to hunt” for special government contract opportunities that would otherwise be inaccessible to your shop.
For example, some fleet maintenance and repair contracts cannot be awarded to a private auto shop without a small business certification already in place to validate that the shop is capable of executing the work and performing to a high standard of quality. Many government contracts called “set asides” are restricted to small businesses that carry these certifications.
Generally speaking, the harder it is to obtain a particular government certification, the more lucrative the benefits of that particular certification will be for your business.
Many companies that serve the federal government, for example, consider the “crown jewel” of all certifications to be the SBA 8(a) program, which while difficult to attain, allows for 8(a)-certified companies to receive “sole source” (without competition) set-aside contracts up to $4 million in value, a tremendous benefit. Of course, this also means that SBA 8(a) certification often requires months of detailed paperwork and correspondence with the government to gain admission, and not all applicants meet the stringent requirements.
“In an ultra-competitive community in which you have a lot of rivals, a government-issued small business certification can help your shop stand out, providing you with access to contract opportunities, networking and training events, and other state, local or federal business benefits that the shops down the street won’t have,” LaPlante says. “If you are a minority, veteran or woman small business owner, and you want a new revenue stream from government contracting, small business certifications are vital for your success.”
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