Well it’s official! On February 17, 2009 the American Recovery and Reinvestment Act was signed into law promising to spend another $787 billion to stimulate the economy. While families and businesses have a death grip on their money, the federal and local governments are spending freely.
For better or worse, these billions will be spent so how can we cash in on our piece of the recovery? One way is to obtain or factor government contracts!
A large chunk of spending will be accomplished by the government awarding contracts to businesses. While large businesses certainly receive their share of awards, the law requires government to also award billions of dollars to small and minority businesses.
So where will the recent stimulus money be spent? There are billions set aside for:
- Tax Relief ($288 B)
- State and Local Relief ($144 B)
- Infrastructure and Science ($111 B)
- Protecting the Vulnerable ($81 B)
- Health Care ($59 B)
- Education and Training ($53 B)
- Energy ($43 B)
- Other ($8B)
TOTAL: $787 Billion (These figures are based on the overview at the White house web site www.recovery.gov where the full details and progress can be tracked).
Where is the opportunity in all this government spending for businesses and cash flow professionals? The first would be to see if your business has a service or product that could be sold directly to the government or to prime contractor. A quick browse of the government’s list of product and service classification (PSC) codes shows they truly buy everything from toilet paper to guided missiles.
Start researching the potential online by visiting www.fedbizopps.gov. This site serves as the government point-of-entry for Federal procurement opportunities over $25,000. Government buyers post their needs daily providing a portal for business vendors seeking Federal markets for their products and services.
A business interested in providing supplies or services to the government will likely want to become a GSA Schedule contractor. The General Services Administration (GSA) establishes long-term contracts that allow government offices to buy directly from commercial suppliers at set prices. For more information for ‘getting on Schedule” visit www.gsa.gov and www.gsaadvantage.gov.
The second opportunity is to be a factoring consultant providing access to cash for companies doing business with the government. While the government is a secure payer there can still be some delay in receiving payment. The Prompt Pay Act has done much to speed up the process but it can still take 45 days or more to receive payment.
Factoring government receivables can provide a business with capital for additional staffing, equipment, or raw goods that might be required to fund expansion. In 1986, Congress passed the Assignment of Claims Act allowing a contractor, or its assignee, to assign its rights to receive payment due to a financing institution.
Whether earning commissions for the assignment of government invoices as a factor consultant or selling products and services directly, doing business with the government can be a lucrative consideration. Obtain your share of the Recovery stimulus money by learning to obtain and factor government contracts today!