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Continued: Uncle Sam's a tough small business client as cuts make it more costly to seek gov't contracts

  • Article by: JOYCE M. ROSENBERG , AP Business Writer
  • Last update: July 31, 2013 - 2:10 PM

While Mander waits, he's seeking more business from non-government customers, including advocacy groups that represent health care and real estate interests.

Small businesses that partner with companies that work directly with the government also are contending with longer wait times and a drop in revenue.

Dulles Case Center has been busy the past few months working on bids with the federal contractors that it partners with. The government has been seeking price quotes on the carrying cases that the Dulles, Va., company manufactures for weapons, radios, computers, medical equipment and other items. Owner Donna Kulesza hasn't heard anything beyond those requests.

"We've been doing three times as many quotes as we would in any given month," she says. "But we're seeing a lack of activity."

That means Dulles is doing work but not getting paid — the government doesn't pay for the work a company does when it puts a bid together.

"The lack of revenue hurts from the orders not being awarded yet," Kulesza says. She was forced to lay off one of her employees in April.

Active Care, a company that provides disease management services, is a subcontractor to federal employee benefit programs, getting under 30 percent of its revenue from the government. The contracts it has agreed to work under were approved before the budget cuts took effect. But the government isn't releasing the money to fund the contracts, which include Active Care's diabetes management services.

"We've been given an indication of an indefinite hold," says Michael Jones, chief strategy officer of the Orem, Utah-based firm.

Jones talks to the company that's the prime contractor each week, but there's no sign that the money will forthcoming. It's a big contrast with his experience doing business with the government in past years.

"We were able to move through the process quickly," Jones says.

If the delay looks like it's going to extend another six to 12 months, Active Care will need to look to other customers, including state and municipal governments, to replace the federal contract revenue that it's losing.

Right now, Jones is in wait-and-see mode.

"We have several opportunities, but most are dependent on the outcome of these programs. It's a bit of domino effect," he says.

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Follow Joyce Rosenberg at www.twitter.com/JoyceMRosenberg

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