This article is by Ruby B. Harvey, a member of Public Spend Forum’s GovMarket Executive Council and a recently retired member of the U.S. federal senior executive service. Ruby has over 25 years of experience in federal acquisition, project management, training, small business program development and information technology management. She is currently a member of several industry and academic boards including those focused on inclusion and equity.
A well-known saying is that the first step in solving a problem is to recognize its existence. Paraphrasing a definition found on Investopedia©, the business term barrier to entry identifies factors preventing or impeding newcomers or certain socioeconomic groups from fully participating in a market or industry sector thereby limiting competition.
The phrase”barriers to entry” and all that it implies is viewed as problematic by many because it gives rise to frustration amongst both the buyer and seller communities.
For buyers it implies fault. It suggests a lack of equity. Opportunities withheld. Unfair business practices. Buyers bristle at these descriptors because they are often anecdotal with little to substantiate the levelled charge.
Sellers consider barriers to entry to be exclusionary in nature. They cite both obvious and nebulous barriers preventing their success as business owners. Barriers to entry can affect businesses of all sizes. However, small business owners are particularly affected by what they view to be barriers to entry. Size aside, no organization wants to be faced with the possibility that their business success is hampered by barriers that inhibit access.
From a federal contracting standpoint, restrictive barriers to entry run counter to the intent and spirit of both the Federal Acquisition Regulations and the Small Business Act.
Barriers to Entry Study forms an important fact base
Given the numerous perceived or real barriers, I was excited to read the recent study entitled “Barriers to Entry in Government Markets” led by Public Spend Forum in collaboration with North Carolina State University’s Supply Chain Center.
The study was completed to reach an evidence-based understanding of the barriers to entry faced by suppliers in the public sector along with an understanding of the government’s efforts to address those identified barriers. This important and timely study relied on a combination of supplier surveys, reviews of previous studies and interviews with public sector leaders to better understand the perspectives of both the seller and buyer communities.
Related Link: Take the Barriers to Entry Survey
Based on the supplier survey data, the barriers fall in to four primary categories.
- Complex requirements and a slow/costly process
- Ineffective communications (including customer service challenges)
- Incumbent bias and legacy preference and
- Overly complex regulatory requirements.
Some cause for optimism as solutions are being implemented
While all four categories are daunting, the good news is that the study also identified reasons for optimism. Specifically, the problem of barriers to entry is recognized and meaningful actions are now being taken to remediate the issues.
Some of the identified actions to reduce and hopefully ultimately eliminate barriers include engaging with suppliers early, simplifying requirements and aligning supplier evaluations and greater investment in marketing and outreach to suppliers.
The final remediation effort highlighted in the study and the one that will surely excite suppliers is the development of programs to specifically target new, innovative, and emerging suppliers. Bullseye!
I have served on both sides of the divide—as government buyer and industry seller. I am encouraged by the results of the referenced study and see it as a useful roadmap for both communities to understand and work towards the common goal of service excellence and impactful, positive support to the American public.
I’ll be writing further on the study and the issues/solutions highlighted within over the next several weeks. I would welcome any comments and advice!