with them

A 52-person Frederick company recently landed major contracts with Microsoft, Nokia and Intel. A Landover company with a staff of seven is hard at work for the IRS and GE Information Systems.

Small businesses such as these are wheeling and dealing with the Microsofts of the world by offering exceptional customer service, specializations and quick turnaround.

What these 21st-century mom-and-pop operations have in their toolbox -- making possible what was unimaginable even a generation ago -- are the computer and its offspring, the Internet.

E. Smith Yewell and his company are part of the phenomenon.

"In any service industry, you can use things like the Internet to be more efficient," said Yewell, president and CEO of Welocalize, the Frederick company with the Microsoft contract. "Even though we're small in certain areas, we can still be as strong as big companies."

Welocalize develops software to help companies do business -- even maintain their Web sites -- in foreign languages. Yewell, who would not give specific revenue information, said the contracts with Microsoft, Nokia and Intel will generate a total of $500,000 for his company this year, with more next year.

Being able to compete with large companies for big contracts is easier in the high-tech sector than in traditional manufacturing or service industries. With computers and other high-tech tools, a handful of employees can manage big jobs.

"Normally, it's the type of technology that can be licensed out or installed, so [the companies] don't have to hire lots of people," said Chris Foster, deputy secretary of technology, strategy and business development with the Maryland Department of Business and Economic Development. "When you have to hire manpower, it's harder because of overhead."

Foster said location can also play a vital role. The Washington, D.C., metropolitan area is home not only to most large government agencies, but also many major company headquarters or regional offices.

"It's a huge edge," Foster said. "Companies here are right down the road from customers, and the customers' customers."

At your service

Large companies get personalized service, not "big-company, stand-in-line service," when they work with small businesses such as Welocalize, Yewell said.

"You go with a small company, and you're important," he said.

David Weigelt, a partner with Immersion Active in Frederick, said small businesses carry less overhead, giving them a competitive edge in winning contracts.

"Everyone's looking at the bottom line," Weigelt said.

Immersion Active is an eight-employee interactive design and marketing company in downtown Frederick. Its major clients include the U.S. Navy, the Aircraft Owners and Pilots Association, Anthony Robbins & Associates and Long Fence Co.

Jennifer Guyliano, vice president of Anthony Robbins & Associates, said her company, a national professional consulting and training firm, has been working with Weigelt's company for about three years. Immersion Active designs the Anthony Robbins Web site, database, e-commerce and marketing materials.

Guyliano said she searched the Washington area for an interactive marketing company and chose Immersion Active based on its creativity and in-house capability. Size was not an issue either way, and Guyliano said she looked at some larger companies, too.

"They have a smaller team that could dedicate more time and attention to my needs," Guyliano said of Immersion Active. "We're important to them."

She said smaller companies tend to have a higher-caliber workforce because they are "more selective about the employees they hire.

"It's quality over quantity," Guyliano said.

Jonathan Cohen, president of 20/20 GeneSystems Inc. in Rockville, said another advantage small companies enjoy is less red tape.

"As small companies, we have the ability to move quickly and innovate and transfer ideas into projects quicker than larger companies," said Cohen, whose company has nine full-time employees and marketing relationships with Kodak Scientific Imaging and Novartis Pharmaceuticals.

A foot in the door

Sometimes, small companies have to become part of a larger team to see some large-contract action.

Andre Fraser, president and CEO of NumberOne Technologies, the seven-person company in Landover working with the IRS and GE Information Systems, said becoming a subcontractor is a good way for small businesses to get in on large contracts. He said his company, which has three employees and four contractors, also partners with larger businesses.

NumberOne reported revenues of about $400,000 last year and is projecting just under $1 million this year. About 90 percent of the company's revenue came from the two large contracts, Fraser said.

A good track record is also vital to landing major contracts. Mark Gaver, CEO of GTI Technologies in Frederick, said that "on a federal government level, winning procurement highly depends on past performance -- what you've done and what you can do in the future."

GTI, which has 87 employees, is an information and technology consulting company. Government contracts account for nearly all of its business. GTI often competes with other small companies, Gaver said, and most contracts are large and require a team effort.

There are pitfalls, he said.

"Very rarely small companies are prime contractors on these," Gaver said.

"You have to be a subcontractor, but it's harder. You don't control the work,'' he said. "Lots of times if you team with large firms, they're very good at putting small companies on the team as window dressing because we have to be there" to help the federal agency meet its small-business requirement.

Agencies are supposed to award at least 23 percent of their contracted work to businesses that have no more than 500 employees, though that goal isn't always met, Foster said.

Sometimes a small company will work alongside a big one. Robert Menzi, COO of Protiveris Inc. in Rockville, said his company has had research agreements with large companies, including GlaxoSmithKline, for "cost-share." Under those arrangements, the companies share the research costs -- and the data gleaned. Protiveris, a 14-employee operation, can then use that information, Menzi said.

Nate Williams, president and CEO of NW Systems Inc., a business systems consultant in Largo, said he started his company as an independent contractor with one big client: BAE Systems. By building a solid reputation, he has been able to grow his company to 82 employees and $7 million in annual revenues.

Williams attributes his company's success in part to his mentor, Gary Murray. A good mentor not only provides valuable knowledge but can introduce budding entrepreneurs to potential clients, investors or other professional contacts. Mentors can be found through specific organizations, such as the Service Corps of Retired Executives, or informally through Rotary clubs or chambers of commerce.

"I recommend small businesses find a large business they feel comfortable with and get into a mentoring program with them -- find someone to pull you up, so to speak," Williams said.

Room to grow

Weigelt said that while big contracts can mean fast growth, small companies shouldn't forget that their success may stem from their smallness in the first place.

"We've always taken an organic approach to growth," Weigelt said. "Big gigs are helping us take bigger steps. We look to grow and have been continuing to get these opportunities to get larger projects."

Yewell said Welocalize's goal is to grow carefully through acquisition so the necessary infrastructure and systems are already in place.

"It's hard to say how big we'll ultimately get," he said. "We want to do it carefully. We hope to get big and still act like a small company."

Welocalize competes for contracts with three much larger companies, each with more than $100 million in annual revenues, Yewell said. Most of the rest of the industry is made up of small and medium-sized companies.

"Large companies don't like it," Yewell said of small companies' success. "It's the classic David and Goliath battle. We're smarter and faster and can move more quickly."

Owners of small companies say larger contracts boost morale, making work more exciting.

However, Weigelt cautioned, smaller businesses have to make an effort not to let a few big clients consume all of their resources.

"It's not good business sense," he said.

And some contracts are just too big for small companies. Yewell said Welocalize has had some success with large clients -- with contracts worth $1 million or more -- but many of these contracts call for more resources than his company has.

"At that point, clients want depth, from the perspective of support, if something goes wrong," he said.

The rewards can be great, but earning a place in the large contract competition can be a constant battle, Gaver said.

"You just focus on what you do best," he said. "You scrap and claw and work very hard to market yourself to organizations that you know need your services. You have to stay competitive."