A meaningful HUBZone Small Business Roundtable?

Pleasantly surprised, having attended countless small business events in the past few decades and almost without exception left underwhelmed and disappointed.  Not this time.  Hope springs eternal!    

I'm delighted to report that the Department of the Navy's (DoN) Office of Small Business Programs (OSBP) and the Naval Information Warfare Systems Command (NAVWAR) co-hosted a non-attribution, by invitation only closed door roundtable on the day before the National Defense Industrial Association (NDIA) Gold Coast event this week at the San Diego Convention Center.  The hosts were to invite one representative from 10 Historically Underutilized Business Zone (HUBZone) companies, but by my count about half that many attended, including yours truly.  It is sometimes asserted by government representatives that there just aren't any HUBZones out there.  I beg to differ.  We're just very good at managing our scarce resources... we have to be.  Nonetheless, the sizable conference room table was full... we had to find more chairs.  The HUBZone small business reps were outnumbered about 5 to one... maybe more.  Off to a good start!  

The Navy's co-chairs of the HUBZone roundtable were SES Jimmy Smith, Director of DoN OSBP, and SES John Pope, Executive Director of NAVWAR.  Also in attendance was SES Nancy Gunderson the Director of NAVWAR Contracts and a few of her staff.  Jimmy started off by orienting us to essentially what was motivating this and other roundtables, and the apparent recent uptick in the Navy's attention to Defense Industrial Base (DIB) small businesses... the Honorable Carlos Del Toro, Secretary of the Navy (SecNav).  

I met Carlos in San Diego, before he was the Honorable Secretary Del Toro, when he was the CEO of SBG Technology Solutions as they primed an opportunity with Boarhog as a sub.  After 17 years as a small business pursuing work with the 10 Navy acquisition commands, Carlos was now SecNav... the head honcho.  The Assistant Secretary who owned Navy acquisition programs now reported to him, as did Mr. Smith, who revealed SecNav summoned him to his office earlier than expected, and let him know the DoN OSBP wasn't doing as well as they would have him understand, so Mr. Smith put aside his slideshow and listened.  There was a list... these things needed attention, and not maybe someday when we get around to it.  

In mid July SecNav held a meeting with leaders of the 10 Navy acquisition commands, letting them know the Navy wasn't doing nearly enough to do right by small businesses, especially for the small business subcontractors who were at the mercy of their large prime contractors.  The Navy's measures of effectiveness are exclusively tied to revenue to small business prime contractors, broken down by socioeconomic category.  Small business subcontractors are off the Navy's radar, essentially of no interest to the OSBPs since they received no credit for small business subcontractor work on the Navy's contracts.  My albeit imperfect analogy would be Major League Baseball franchise owners deciding there's nothing to be gained by having an interest in the minor leagues or farm teams where their future players develop and maybe someday get to play in the "big league."  The Navy de facto believes small business contractors are born ready to prime on day one, and if they're not then let them go sell refrigerators or used cars or whatever.  The big business primes will determine the small business subcontractors' fate, and the Navy can trust Booz Allen, Deloitte, Leidos, and the rest of the very capable and wonderful big businesses to do right by their small business subcontractors... can't they?  Sure... they must... they do.  I was told directly by one Navy Director OSBP that the Navy has no contractual relationship with small business subcontractors, and they must avoid interfering in the prime-sub relationships, so it's none of his business what happens to small business subcontractors.  The primes have free reign... go forth and do good.  Give your small business subcontractors the work you promised them in the Teaming Agreements and as reflected in the prime contractors' Small Business Subcontracting Plan that the big primes submit to the Navy with their proposals.  They make good on those small business subcontractor allocations they promised in their proposals, right?  Sure they do.  Right?  Right?

Maybe the Honorable Secretary Del Toro knows better.  I'll bet he does (you know he does).  He lived it for 17 years.  My company's experience is this... we have 39 subcontracts to support the Navy, of which 10 have any work whatsoever.  That's not because we sit by and wait for the phone to ring.  We bug the heck out of all our primes.  We had to bid on about 150 opportunities to land those 39 subcontracts.  So you do the math.  What did it cost Boarhog to respond to multiple data calls and rounds of pricing from the primes and participation in proposal reviews on 150 opportunities?  That labor isn't free.  Continuing our Major League Baseball analogy, we're batting .250 which is about what the rest of the small businesses bat.  We win 39 times, with 75% of those "wins" yielding nothing.  Does the Navy track that?  Do they ask their primes if they're employing their small business subcontractors as they proposed they would in their government solicitation response that earned them the award?  If they were, wouldn't the Navy know that 75% of the time their small business subcontractors get nothing?  That's not just Boarhog... the other HUBZone small businesses at the roundtable echoed this experience.  Two HUBZone leaders told Mr. Smith and Mr. Pope that they have resigned themselves to not subcontracting on Multiple Award Contracts (MACs) anymore, and one stated emphatically he doesn't subcontract anymore at all, to anyone.  That's how bad it has gotten for his company.  

To their credit, Mr. Smith and Mr. Pope listened with interest, took notes, and stated they'd get to the bottom of this issue.  I've known John Pope since he was a Navy Lieutenant when we were on active duty at NAVSEA together, and I will state without reservation that he has always demonstrated honor and integrity, and he does so today as the Executive Director of NAVWAR.  When he states emphatically that he'll get to the bottom of something, he will.

More to follow....