A lot of small business owners have complained that the $787 American Recovery and Reinvestment Act (ARRA)—better known as the stimulus package—has not done enough for the little guy. Don’t tell Miguel Galarza, CEO of Yerba Buena Engineering and Construction, a seven-year-old, 40-employee company in San Francisco. Since September, Galarza has won 12 contracts totaling $10 million and he’s hoping to garner more as the federal government doles out the rest of the funds over the next year. “It’s meant the difference between our company growing or just getting by,” he says.
Much of this work resulted from Galarza’s success qualifying for Indefinite Delivery/Indefinite Quantity (ISIQ) contracts, which go to companies able to prove they can turn on a dime to take on government projects. With these master agreements, the government chooses companies for a certain period of time, but without specifying exactly when the work needs to be performed or the number of items that have to be delivered. When an agency receives the budget to begin the work, it can get started with a pre-qualified ISIQ contractor without going through months of application reviews and selection. The agency simply solicits bids from ISIQ vendors and chooses the best one.
In just September, Galarza, 48, was asked to bid on 32 such projects for the U.S. Fish and Wildlife Service, the National Parks Service, and other agencies. Now, he’s working on assignments ranging from a $5 million effort to install an irrigation system on a 4,000- acre elk refuge in Jackson Hole, Wyoming, to a $750,000 project to pave concrete pavement in Stone Lakes National Wildlife Refuge in Elk Grove, Cal.
Galarza didn’t just luck into the ISIQ program, of course. Yerba Buena has a business development staff of five that is responsible for regularly monitoring federal web sites listing hundreds of potential contracts, and then going through the complex process of applying.
“I don’t think a week goes by that we’re not working on some type of proposal somewhere in the country,” he says. “We know how to chase down projects.”
In fact, Yerba Buena could be the poster child for the type of small business well-positioned to win stimulus-funded contracts. “Companies that have success with stimulus work—or any other kind of government contracts—have previous backgrounds doing this kind of thing,” says Diana Dibble Kurcfeld, CEO of Design to Delivery, a Bethesda consulting firm that helps companies navigate the government procurement process. “It’s all about your previous relationships.”
Galarza has had plenty of time to develop those relationships and a deep understanding of the construction business. Galarza, who is of Puerto Rican descent, started digging ditches at age 13 for as little as $1 an hour near his home in San Francisco’s Mission District. After high school, he joined an apprenticeship program with the Carpenter’s Union, eventually going to work for a minority-owned civil engineering firm. He spent 10 years there doing everything from supervising construction projects to ordering supplies. Along the way, he learned the ins and outs of government bids. “I call that my 10-year-long apprenticeship in federal contracting,” he says.
Now, Galarzo figures stimulus work will account for most of the $16 million he expects to gross this year. And, with perhaps 80% of ARRA money yet to be allocated, he’s hoping to bring in as much as $25 million next year. It’s a very stimulating prospect, indeed.
