ARTICLE

January 2003

New Division Focuses on Small Businesses

by Benjamin Stone

Today’s defense industrial base is markedly different from the industry that supported the military of a generation or even a decade ago. Dual use, homeland security and cyber security technologies—combined with a 10-year trend of mergers and acquisitions—have resulted in a smaller, more diverse defense industry.

To be sure, large companies play a significant role, but it is a role that could not exist without the contributions of many small businesses, as President Bush recognized last March when he announced the administration’s Small Business Agenda.

“Small businesses are the heart of the American economy,” he said. “Small and young companies create two thirds of the net new jobs in our economy, and they employ half of all private-sector workers.”

In October, the Office of Federal Procurement Policy released the administration’s strategy for increasing federal contracting opportunities for small businesses. Departments and agencies currently are developing their implementation plans.

In National Defense’s 2002 Mega Directory—a listing of the corporate members of the National Defense Industrial Association and its affiliates—332 of the 996 companies (33 percent) categorized themselves as small businesses. These companies, located across the United States, are responsible for supplying the military services with all sorts of products and services, ranging from air defense systems to unmanned aerial vehicles, and from precision munitions to systems engineering.

Recognizing their significance, NDIA has established a new Small Business Division to focus specifically on issues impacting this important industry segment. NDIA’s president, retired Air Force Lt. Gen. Lawrence P. Farrell Jr. approved the division’s charter in October. The division consists of corporate representatives interested in enhancing small business participation in the federal market place.

At the division’s first meeting, members identified several areas of focus. Discussions are continuing to determine which areas should receive priority treatment. The focus areas and plans for each include:

• Teaming and subcontracting arrangements. The division will devise and implement strategies to foster alliances between large and small businesses. It will establish processes for identifying the needs of large business and communicating those needs to small businesses.
• Financing. The division will develop strategic relationships with the investment community, including seed and venture fund organizations, to expose members to sources of private and public capital and integrate these efforts with Defense Department investment initiatives.
• Homeland Security. The division will serve as a resource for identifying emerging requirements for small business opportunities.
• Legislation. The division will provide members with regular updates on legislation that may affect small businesses.
• Meetings and Conferences. The division will develop and organize roundtable discussions with senior government and private sector officials to address current issues. It will explore the feasibility of having a small business conference.

The division hopes to work not only with the Defense Department, but also with the new Department of Homeland Security, helping to address acquisition challenges facing them both.

The division plans, for example, to host a meeting to discuss small business opportunities with the Transportation Security Administration, which is part of DHS. If this session proves successful, a similar meeting will be sought with officials of the Joint Strike Fighter Program Office.

Improving small business utilization will be one of NDIA’s Top Issues for 2003. If you would like additional information on the Small Business Division, please contact Ruth Franklin (rfranklin@ndia.org) or Tyrone

Taylor, its newly elected chairman (ttaylor@unisphere.com).

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