Building Communities Free Enterprise Staff  | July 28, 2016

Kansas City’s Startups and Small Businesses are Capitalizing on Uncle Sam’s Presence

Kansas City’s small businesses are opportunistic, making the very most of a recent influx of talented workers, relatively healthy regulatory climate, and the presence of some of the nation’s most sophisticated internet connectivity. One more resource they’re capitalizing on: the presence of Uncle Sam.

More than two dozen federal agencies maintain operations in the Kansas City metro area, which is also home to a thriving independent small business and startup community. Over the years, those companies’ proximity to federal agencies has helped businesses in and around Kansas City win contracts from federal governments that require local products and services.

“It makes sense,” Kenneth Surmeier, a business specialist at the Small Business Administration (SBA), said about contract opportunities that exist in the city. “I know businesses that just make a living working on government contracts.”

One agency that has a home in Kansas City – and that has been a boon for local entrepreneurs – is the General Services Administration (GSA), which is tasked with managing government buildings and finding private-sector professional services for other government organizations.

“Startups are creating new products and efficiencies that federal agencies need, so we host meetings with local entrepreneurs who have these solutions and want to enter the federal marketplace,” Jason Klumb, the administrator for GSA in the Heartland region, said in a recent phone interview. “I had a meeting two weeks ago with a local startup. The proximity and appeal of our location helps create those opportunities and find these new businesses.”

Government officials aren’t the only ones benefiting from being neighbors with innovative entrepreneurs.

“Basically 90 percent of our work is with the federal government, and it helps that there’s a ton of agencies in downtown Kansas and in the surrounding area,” explains Joe Vazquez, the founder and owner of local construction firm Vazquez Commercial Contracting.

He’s one of many entrepreneurs benefiting from working in a city home to dozens of government offices.

“There’s a lot of opportunity in federal contracting for Kansas businesses now—especially in recent years as the city’s downtown booms—and it’s opened the door to tremendous opportunities,” he said.

Maria Meyers couldn’t agree more. The founder of KCSourceLink—a non-profit dedicated to helping local entrepreneurs succeed—believes small businesses can take advantage of federal contracting

“When you have a good entrepreneurial ecosystem, you’re going to see a lot of different players and the agencies support them in many ways,” she said. “[Federal] agencies buy things and look to small and larger businesses to purchase from. They also identify new opportunities with local entrepreneurs to grow their operations,” she said.

Under the Small Business Act, the federal government must strive to award at least 23 percent of its contracts to small businesses and startups, which affords entrepreneurs the opportunity to bid on potentially lucrative contracts. Earlier this year, the SBA announced that small businesses won an unprecedented 25.8 percent of all government contracts in 2015, which totaled up to $90.7 billion in revenue for small businesses.

For Klumb’s part, he believes the federal government can help open up more opportunities for downtown Kansas City and small businesses in the surrounding area in the coming years. Although the GSA is already located downtown, Klumb is eager to see more government agencies and employees make the move from outside the Kansas City central business district to the heart of the city.

Downtown Kansas City is already thriving, thanks to improved transportation options and the arrival of ultra-high-speed Internet, courtesy of Google Fiber. Still, since people who work downtown often eat and shop downtown, moving more federal workers into the business district can only boost the local economy further.

“As agencies come to the end of their leases or buildings come to the end of their usefulness we’ll continue working with the city, local entrepreneurs and closely with different folks like the U.S. Chamber of Commerce to encourage federal agencies to move downtown and to keep being an economic catalyst,” he said.