Smaller Firms Set to Win $5B US Award

HP and Dell (News - Alert) will have to restructure themselves to include small businesses in their list of associates to be qualified to bid for a $5-billion federal contract, which would include the supply of items such as laptops, servers, routers and storage systems.

The Department of Veterans Affairs (VA) intends to select about three companies by March 31, 2013, to share the agreement which should be completed within a period of about five years.

This has drawn considerable interest from IBM (News - Alert) and other top computer makers. Only firms that have maximum employee strength of 150 will be considered as prime contractors. This would mean the large companies would have to team up with smaller associates for getting a shot at the contract.

This initiative was taken up by the Obama Administration after a decision to award more contracts to smaller companies – something it has failed to do in the past. In addition, the VA has the responsibility to help companies owned by veterans to make sure any firm owned by a disabled veteran will get a chance to be one of the selected three, in case there is such a suitable candidate.

Cris Young, president of the American Small Business Chamber of Commerce, a Washington-based not-for-profit group, said that smaller firms are finally getting the long overdue push.

“It’s about time for us to get our fair share of the pie,” Young said in a phone interview. “The dollar amount of the VA contract is huge and for a small business to get something like this is amazing.”

The VA is using a separate, $12-billion technology contract, awarded in 2011, to help small businesses owned by disabled veterans. While California-based Hewlett-Packard (News - Alert) won a $20-million deal under that agreement, Systems Made Simple – a New York-based small business that was owned by a disabled veteran – got a contract for almost $260 million.

Dell and IBM don’t have any part of the deal.

 “Dell is always looking for ways to help key government customers better accomplish their mission through more effective and efficient IT solutions and services,” Scott Radcliffe, a company spokesman, said in an e-mail.

He didn’t comment on whether Dell, based in Round Rock, Tex., was seeking a role in the project.

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