Administrator Johnson Says Small Businesses Drive American Innovation and Competitiveness
As Prepared for Delivery
Martha N. Johnson
U.S. General Services Administration
American Council of Technology/Industry Advisory Council Small Business Conference
April 6, 2011
I’m delighted to be here today, and it’s a privilege, as always, to speak with the American Council of Technology and Industry Advisory Council and particularly the associated-small business community.
Despite my current role as the head of one of the world’s largest purchasers, I have a personal connection to small business. I have worked at a small architecture firm, a diversity consulting firm, an executive search firm, and a strategy firm, so I’m sensitive to the challenges that you face as the owners and operators of small firms. I also know enough to be dangerous about the information technology industry, and my hat is off to you for being in a sector of our economy that changes with the blink of an eye and is the darling of our growth projections.
The U.S. General Services Administration is excited to be a critical player in forwarding President Barack Obama’s small business agenda. We are a big operation, but we are also an enormously diversified operation, and we touch an unusually broad customer base. We have a lot of reasons to be in solid partnership with small business.
The GSA is the federal government’s landlord and wholesaler: think Costco, CarMax, Amazon.com, and FedEx combined with the largest public real estate manager. By some estimates, we are responsible for 2 percent of all commercial real estate in the country.
In real numbers, GSA is the steward of more than 360 million square feet of real estate, and more than $60 billion in federal spending.
Our mission is to use our expertise to provide innovative solutions for our customers in support of their missions, and by so doing, foster an effective, sustainable, and transparent government for the American people.
In other words, we support the Department of Veterans Affairs so that it can support our veterans. We provide infrastructure for the Department of Education so that it can focus on educating tomorrow’s leaders.
GSA’s customer base is broad, ranging from the federal judiciary to federal agencies to state and local governments, and we’re committed to providing best-value solutions to each of them.
This gives GSA a unique strategic positioning within the government as we work both with our customers – public organizations and government agencies – and with our suppliers – industry and private firms. We play an important role in transferring knowledge and interpreting market messages for our clients and in transmitting their needs and operational requirements to the private sector. In short, GSA manages the intersection between the public and the private sectors, between industry and government. Under ordinary circumstances, this is a big job. But these are not ordinary circumstances.
Our country faces serious challenges both at home and abroad. Our troops need support, our veterans need care, our children need good schools, and our infrastructure needs an upgrade. Too many Americans still feel the terrible anxiety of unemployment, and there is still a long way to go before our economy is back on its feet again. That said, we are seeing encouraging news.
Two years after a terrible recession, our economy is growing and showing real signs of strength. For the fourth month in a row, the unemployment rate has dropped, now to 8.8 percent in March. March’s employment report also shows that the private sector added 230,000 jobs in industries ranging from manufacturing to education and construction. Today, we’re seeing jobs created at the highest rates in a decade, with 13 consecutive months of private employment growth, adding a total of 1.8 million private-sector jobs.
To continue to encourage this growth, President Obama has set an ambitious course for the government and for the nation. In his State of the Union Address, he said: “The future is ours to win. But to get there, we can’t just stand still.” He continued, “We know what it takes to compete for the jobs and industries of our time. We need to out-innovate, out-educate, and out-build the rest of the world.”
We can’t win the future with a government of the past.
That’s why the conversation we have today and the robust partnerships we are developing between industry and government are so important. After all, such partnerships are responsible for some of the greatest advances of the past century. Working together, industry and government have mapped the smallest particles – the human genetic code – and peered into the vast reaches of the universe. Together, we have brought cars, airplanes, and computers to millions of people, lifted untold numbers out of poverty, put a man on the moon, and built the finest universities in the world. Together, America has led the world from the industrial age to the information age. And now, we must look further still.
To achieve the president’s goal, to win the future, we need a government that works – and works well. We need a government that works well at educating our children, that works well at building our infrastructure that works well at fostering American innovation. And we need a government that works well at supporting the engine of our economy: small business.
Small businesses create about two of every three new jobs in America each year. More than half of working Americans own or work for a small business. And small businesses drive American innovation and competitiveness. Yet, along with the middle class, small businesses have borne the greatest brunt of the difficult economy.
They were hit by a double punch. The downturn has meant people are spending less, so there’s less demand. And the financial crisis made it difficult for small businesses to get loans.
The president understands this, which is why he has directed his administration to support small businesses through such landmark legislation as the Small Business Jobs Act and initiatives such as the Small Business Lending Fund and the Small Business Jobs Forum. And it’s why he has pushed for and signed 16 different tax cuts for America’s small businesses during the past two years.
As the president said last fall, “Government can’t guarantee your success, … but government can knock down some of the barriers that stand in the way of small-business success and help create the conditions where small businesses can grow and hire and create new products and prosper.”
He believes, and we at GSA agree, that the government should give a hand up to the small businesses and entrepreneurs who carry so much risk every day on behalf of the American economy.
At GSA, we are taking the small-business agenda seriously, and we’re working on it with all cylinders. And we have been met with terrific success.
In fiscal year 2010 ,GSA helped nearly 80 percent of the contracts on the Multiple Award Schedule Program go to more than 13,000 small business contractors. Considering that the MAS is the government’s largest acquisition vehicle responsible for more than 10 percent of federal spending, that’s not chump change. And we’re not done yet.
So far in FY 2011 we have awarded more than half a billion dollars to small business, and we are on track to exceed subcategory targets such as Historically Underutilized Business Zone, or HUBZone; women-owned; and small, disadvantaged businesses, just as we did in 2010. By awarding billions of dollars in federal contracting to small businesses, we’re building on GSA’s long history of supporting some of the best companies in the country.
Just last week, the Alliant small business contract reached a milestone: 60 awards worth nearly $1 billion. And on our 8(a) STARS contract, the Streamlined Technology Acquisition Resources for Services contract – another IT contract for small, disadvantaged businesses – we have obligated more than $3 billion for more than 3,000 task orders. That translates into real earnings for our country’s small, disadvantaged businesses.
These two contracts underscore an important point about our philosophy toward small businesses, one that you know all too well: They may be classified as small, but there is nothing small about their ambition or capacity.
Take, for example, TechFlow Inc., a contractor on the Alliant small business contract. This company was recently awarded a task order valued at approximately $103 million to perform IT operations and maintenance services, and to provide program and applications management for the GSA. And I know firsthand about GSA’s IT challenges; tackling them is not a task for the faint-hearted. And that’s just one example.
Around the country, businesses are working with GSA to help government agencies better serve the public. In return, government agencies are realizing the cast-iron value proposition of working with small businesses.
Indeed, just a few months ago, the Department of the Navy conducted a study of its IT acquisition process with the aim of generating cost-savings for the department. One of the key recommendations of the report was to increase the utilization of GSA’s Alliant small business contract. Why? Because it works well, and it helps them work better.
Another way that the government can work better is by becoming more agile, more nimble, and more responsive to our citizens. A responsive government reaches out to – and collaborates with – the public. This is about open – in other words “good” – government, and there are three core pillars that support such a notion: transparency, participation, and collaboration.
Transparency promotes accountability. Participation enhances the government’s effectiveness. Collaboration actively engages Americans in the work of their government and in problem-solving. Together, these pillars produce greater satisfaction and higher trust in a better-performing government.
GSA is doing some big lifts in support of this agenda. We’re providing faster, easier, and more efficient services directly to citizens through USA.gov, the Web portal of the federal government. We revamped that website last year and added a state-of-the-art search engine that provides citizens with access to government information and services at unprecedented speeds. We’re also assisting citizens on the go by partnering with agencies to support mobile applications that stream information ranging from weather emergencies to product recalls to Transportation Security Administration checkpoint wait times directly into the palms of millions of Americans.
One of the most exciting initiatives in this effort is a new website called Challenge.Gov. To foster citizen engagement and generate solutions to some of our country’s biggest problems, the president directed agencies to issue challenges to the public to harvest the best ideas and smartest thinking. As the lead agency in supporting this effort, GSA chose to work with a small startup called ChallengePost to stand up the governmentwide challenge platform.
The site launched last September and since then, there have been nearly 80 challenges from 30 agencies to do everything from help invent a more energy-efficient light bulb to instantly pinpoint gunfire on the battlefield. These are serious problems, and ChallengePost’s work provides a vital and direct link between the government and the public to help us solve them. It bridges the gap between the government’s need and the people’s expertise.
This new site has been good for the government and for the winners of the challenges. But it’s also been good for this small Internet startup company.
As Brandon Kessler, the CEO of ChallengePost, says, "Working with the federal government has been an enormous boon to our business. Our success with GSA and the government overall has brought in other government agencies and corporations who want to duplicate what we've done in partnership with them.”
It’s a best-value solution for us, and it’s been a launching pad for them.
It’s my hope that going forward, we’re able to partner with more small firms such as ChallengePost and TechFlow, and that we’ll continue the momentum we’ve established around our small-business utilization. At GSA, we don’t want to just be the referee, determining who gets on our schedules. We want to help you discover how to get on schedules, and, once you’re there, how to get business with the government. We want to link the partners and complete the handshake.
GSA is more than just the gatekeeper; we’re the counselor, the guide, and the go-to resource both for agencies and small businesses. So share your ideas with us. Let us know your challenges, the obstacles in your way. Communicate your frustrations and your pleasant surprises. Tell us how we can close the gaps between government and small firms, and in so doing create a government that works ever better for the American people.