I firmly support increasing the small business revenue threshold to $14,000,000. The nature of our business is that we provide transportation management consulting for different events, and scenarios that require the transportation of many people. Often times we utilize subcontractors who own and operate the equipment (buses, motorcoaches). The subcontractor on average is paid 85% of the total contract value, with the transportation management company receiveing 15% of the contract value.
When you evaluate the total revenues for large people transportation projects with the above revenue %'s the actual reciepts for the transportation SIN is much lower than the total value of the company.
With the current threshold at $7,000,000 for the Transportation is not allowing our company to bid on average size contracts that are being set aside for total small business. We are a small business but our revenues can be significantly impacted in one calendar year by a large contract, however the majority of the revenue is immediately passed through to the subcontractor.
One example highlights this scenario. We provided 500 buses for the 2010 Vancouver Winter Olympics - contract value 24,000,000. Our subcontracting costs were approximately $19,500,000. The gross revenue to our company is $4,500,000. We have not performed any other jobs near this scope and size and these type of opportunities will not present themselves again. This was a truely unique business opportunity, however the impact of the revenue on our when you average them out over 3 years pushes our revenue over the $7,000,000 threshold for the SBA Size Standard for Transportation.
We feel that this is true across the industry and does not just pertain to our company. The use of subcontractors in our industry is very prevalent, however the majority of the revenue is paid directly to the subcontractor within 30 net.
We are a small business company and would love to compete in this marketplace.
Comment on FR Doc # 2011-11717
This is comment on Proposed Rule
Small Business Size Standards: Transportation and Warehousing
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Attachments:
Atlanta Sales Document
Title:
Atlanta Sales Document
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