03-30-2020, 08:34 AM
Unfortunately this has been the trajectory of doing business with the US Government for a while. Look no further than the number of defense contractors that existed in the Bay Area in 1980 vs the number that exist today. A small company with low overhead and good people can make a product that the Government wants to buy at a reasonable price. The company is very successful and does quite well for a couple of years. Then the contract is over, the Government has what it needs for the next 5 years or more. What now? No big volume business and really no hope of such business. If the small company is fortunate, it can book some foreign sales, but it quickly becomes clear the market is very limited and quite fragile. A better funded competitor can "buy in" to the business and easily wipe out the small company at any time.
If the small company is smart, they will figure this out before it actually happens to them. Often the small company is bought up by a larger company who thinks the big backlog and professional staff makes it a good buy. The small company puts lots of lipstick on the pig to further that notion. After the purchase is complete, the buyer's remorse sets in. They discover that with the "drag" induced by the "big company" overhead and systems, they can't make the product for anywhere near as low a cost as the small company could. Their "due diligence" was done by a bunch of consultants that know nothing about actually building anything. The spreadsheets said it would work. Problem is, the numbers were wrong.
What happens next varies, but it generally means the small company is gone and the Government has to deal with it's own mirror image in the big company. The government actually prefers that, because it is familiar and "safe". It may not be efficient or low cost, but it is predictable and has people to fill out all the right forms in a timely manner. There may be repeated delays and various problems, but they will be well documented so nobody is "at fault". Welcome to 21st century government procurement.
If the small company is smart, they will figure this out before it actually happens to them. Often the small company is bought up by a larger company who thinks the big backlog and professional staff makes it a good buy. The small company puts lots of lipstick on the pig to further that notion. After the purchase is complete, the buyer's remorse sets in. They discover that with the "drag" induced by the "big company" overhead and systems, they can't make the product for anywhere near as low a cost as the small company could. Their "due diligence" was done by a bunch of consultants that know nothing about actually building anything. The spreadsheets said it would work. Problem is, the numbers were wrong.
What happens next varies, but it generally means the small company is gone and the Government has to deal with it's own mirror image in the big company. The government actually prefers that, because it is familiar and "safe". It may not be efficient or low cost, but it is predictable and has people to fill out all the right forms in a timely manner. There may be repeated delays and various problems, but they will be well documented so nobody is "at fault". Welcome to 21st century government procurement.