AAPI Small Businesses Profit from Dept. of Defense Measures

By Tamara Treichel

Asian American and Pacific Islanders (AAPIs) who run small businesses have a lot of reason to smile recently: The U.S. Department of Defense (DoD) has taken measures in the past year to create more opportunities for AAPI small businesses.

The importance of AAPI-owned businesses to the U.S. economy shouldn’t be underestimated: At present, the United States has 1.5 million AAPI-owned businesses generating more than $507 billion dollars in sales and employing more than 2.8 million workers. AAPI-owned businesses can therefore be considered engines of job creation and economic growth.

At the same time, AAPIs face unique health, education and economic challenges that may negatively impact their businesses. President Barack Obama addressed these challenges in an Executive Order reestablishing the White House Initiative on Asian Americans and Pacific Islanders almost exactly four years ago.

“When any of our citizens are unable to fulfill their potential due to factors that have nothing to do with their talent, character, or work ethic, then I believe there’s a role for our government to play,” Obama said upon signing the Initiative in the East Room of the White House on Oct. 14, 2009.

The Initiative aims to improve AAPI participation in and access to federal programs and services. In total, the Initiative works together with 23 federal departments and agencies, each of which has its specific goals to ensure that AAPIs enjoy the same privileges that other groups do. The DoD is one of those federal departments.

The DoD has set itself three major goals to support AAPIs: Its first goal is to improve support for AAPI wounded warriors, transitioning service members and their families and caregivers. The second goal is to provide optimal opportunities for AAPI small business participation in DoD acquisitions. Finally, the DoD aims to promote the recruitment, career development and advancement of AAPIs within the department.

The DoD has realized – and is still realizing – its second goal of benefitting AAPI small businesses by collecting and analyzing data as well as conducting outreach.

The DoD has collected data on the department contracts awarded to AAPI-owned small businesses to establish a performance baseline. By analyzing AAPI small business awards, the department concluded that most DoD awards were given out by the General Services Administration (GSA), an independent U.S. government agency. Thereupon, the DoD issued guidance to the acquisition workforce to maximize use of GSA schedules and Government-Wide Acquisition Contracts (GWACS) to benefit AAPI-owned small businesses.

Moreover, the DoD analyzed AAPI small business participation data to determine the geographic distribution of AAPI small business participation rates. In the fiscal year 2012, of the about $3.12 billion total that was awarded to AAPI-owned small businesses, more than half ($1.7 billion) came from four states: Virginia, California, Hawaii and Alabama.

Also, the department found that in the fiscal year 2012, about $47 million in Small Business Innovation Research (SBIR) awards went to AAPI-owned small businesses.

Lastly, AAPI businesses in the Professional, Scientific and Technical Services category (North American Industry Classification System, or NAICS, 54) were awarded $1 billion. Next to NAICS 54, the other two top categories among AAPI-owned businesses were NAICS 23 (Construction) and NAICS 31-33 (Manufacturing). The department issued guidance to aim for a 10% increase in dollars awarded in the Services category.

What’s more, the DoD strove to fulfill its second goal by conducting outreach to create more opportunities for AAPI participation in DoD acquisitions. For instance, the DoD hosted roundtables nationwide together with the White House Initiative on Asian Americans and Pacific Islanders, at which AAPI small business owners could discuss opportunities within the DoD and barriers to entry.

The DoD also participated in the bi-annual Hawaii SBIR conference and worked together with the Small Business Administration (SBA) and Minority Business Development Agency to participate in the Minority Enterprise Development Week (MED Week) conference for minority entrepreneurs.

The DoD could not be reached for comment, which may have been due to the government shutdown, yet some AAPI small business owners in the D.C. metro area had some positive things to say about the department’s measures.

Pragmatics, Inc. is an award-winning IT-solutions company based in Reston, Va. that was founded by the Vietnamese American Dr. Long Nguyen. Dr. Kim Nguyen, the company’s Chief Business Development Officer, applauded the DoD’s measures.

“Pragmatics is extremely impressed with the initiative the Department of Defense has recently taken to improve opportunities for AAPI small businesses,” Nguyen told Asian Fortune via email.

“As a former small business (Asian-American owned), and as a federal contractor, we are encouraged by DoD’s efforts to provide increased access to, and participation in, federal programs where AAPI small businesses need support and increased awareness. Improving the ability of these small businesses to build and sustain alliances and partnerships and promote workforce diversity will give them new direction and enhanced visibility,” he said.

Harlan Lee, President and CEO of Harlan Lee and Associates LLC which is headquartered in Vienna, Virginia and provides international business services to the government and the private sector, also recognized the DoD’s efforts on behalf of small business.

“We have noticed that the Defense Department has broadened its efforts to provide more opportunities to small businesses as a whole (not just for AAPI small businesses) in recent years, and we greatly appreciate these efforts,” he told Asian Fortune in an email.

Lee also gave an example of how his AAPI-owned small business has benefitted from the DoD initiatives. “In 2010 we bid on, and were awarded, an IDIQ contract to do business with the Missile Defense Agency. Since then, our company has grown by about 300% based on the task orders that came from that contract. We have won awards from the U.S.-Pan Asian American Chamber of Commerce for being one of the 50 fastest growing Asian American owned businesses during that time,” he said.

Tinh duc Phan, Chairman of the Virginia Asian Chamber of Commerce, also welcomed the DoD’s measures to strengthen AAPI small businesses. “I’m very happy to see that,” Phan told Asian Fortune in a telephone interview. “We strongly believe in open doors for everybody,” he said, stressing the chamber’s mission of being open to diversity and empowering those who are less fortunate. “All we ask is opportunities.”