Small firms struggled mightily in the recession economy of 2008. Many found it difficult to make ends meet and were forced to lay off workers and postpone plans to expand. The good news from the 2009 edition of The Small Business Economy, prepared by the Small Business Administration and Office of Advocacy, is that if the past is an indication, small business will help lead the economic recovery.
Since the mid-1990s, America’s entrepreneurs have created 60 to 80 percent of the nation’s new jobs and employ about half of the nation’s private-sector work force. They also provide half of the nation’s nonfarm, private gross domestic product, as well as a significant share of innovations.
Time and again, technology-savvy, innovation-driven entrepreneurs have led the way out of past downturns, says the report. Businesses like Microsoft, Intel, and Federal Express started in down markets. Add to the list RSIS.
In 1993, Rodney Hunt and Scott Amey started Rodney Scott Information Services (RSIS). And under the 8 (a) minority set-aside program run by the business development arm of the Small Business Administration, they set out after federal government contracts with a loan of $5,000.
Originally created to help disadvantaged blacks do business with the government, the 8(a) program grew to include many kinds of small businesses, with emphasis on companies owned by members of a variety of racial, ethnic and economically disadvantaged groups.
Hunt told USBE&IT magazine in 2007 that he realized his fledgling firm needed the program to grow, but he advised, “You don’t build a business plan on 8 (a) contracts, because certification is just a license to hunt. You have to go out and do marketing. If you do it right, it can be the foundation for a larger company.”
Performance on the partners’ first contact led to others and by the end of 1994, RSIS had earned $320,000, with $120,000 in 8(a) commitments and the rest through competitive bidding for private-sector as well as government contracts. After a decade, RSIS “graduated” to win earnings of more than $260 million with contracts from several federal departments: Commerce, Defense, EPA and Homeland Security.
Then RSIS landed a whopping $400-million Department of Energy IT infrastructure contract. “We asked them to look at us as a firm that was going to become a Fortune 500 company,” Hunt says. “We approached contracts with a consultants’ mindset—going into a customer’s office understanding their mission and goals and then finding an engineering solution to advance their mission.”
RSIS, Energy Enterprise Solutions Inc., and 1 Source were awarded a billion dollar contract to manage IT services, as well as to support cyber security at the Department of Energy in 2005. The deal was described as one of the largest federal IT services contracts ever awarded to a small business.
Through an SBA-sanctioned mentor-protégé agreement, EES was formed by RSIS and 1 Source to bid on the DoE contract. 1 Source, an SBA 8(a) company, based in Seabrook, Md., was one of 30 small businesses RSIS brought on as subcontractors.
All businesses depend on getting pieces of the federal contracting pie, wrote Shelton Rhodes and Peter Fretty in their best seller A Piece of the Pie, which featured Hunt and other black technology entrepreneurs, who have benefited from the 8 (a) program. The voice of small business in the federal government for more than five decades, the SBA works to aid, counsel, assist and protect the interests of small business, preserve free competitive enterprise and maintain and strengthen the overall economy.
RSIS graduated out of the 8(a) program and Amey retired in 2004, with Hunt owning 85 percent of the $330 million Northern Va.-based company providing IT services to more than 100 defense, civilian and law enforcement agencies. Hunt sold the company to Wyle Inc. in December 2007. Although terms of the transaction were not disclosed, the acquisition of RSIS was projected to increase Wyle’s 2008 annual revenues to as much as $800 million. RSIS had 10 regional offices and 56 customer sites. The company employed about 1,400 staff and 60 percent of its employees were minorities, women or veterans.
In 2004, USBE&IT named Hunt “Top Technology Entrepreneur” and two years later, he received the Black Engineer of the Year Alumni Award for significant efforts in bringing business development seminars to more than 1, 000 small-business executives, and being a role model and mentor to black contractors.
