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OPEN BOOK

Government contracting —

A Practical Guide to Business Growth

4 the essentials —
Everything you need to know about
working with the government

7 OUR EXPERT ­—
Anne E. Robinson shares the secrets of
successful government contracting

8 CARDMEMBER STORy —
How a small business has taken
federal contracts to its heart

CARDMEMBER
Cardmember STORY story — —
Ari Weinzweig
Theresa & Mo Frechette
Alfaro Daytner
Zingerman’s
Daytner Construction Group

2
OPEN BOOk —
Government contracts

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2
Government contracts
If your business offers goods or services the
government needs, the obstacles between you
and a contract can be easily overcome
Welcome to the second in our series of Here, we will give you the
guides providing practical advice to help essential information you need to succeed
grow your business. This issue focuses in government contracting, from how to
on Government Contracting, a potentially use your status as a small business owner
lucrative field, especially when you to your advantage, to where you can
consider that the government spends access outreach programs which can assist
over $400 billion per year on goods and preparation of specific bids. We’ll take you
services, 23 percent of which is required through the steps of becoming certified
by Congressional mandate to be targeted and targeting federal agencies, and explain
to small businesses (Source: Small the nuances of programs designed to help
Business Administration [SBA]). It is small businesses whose owners belong to
interesting to note, that while 5 percent of traditionally disadvantaged groups.
all government contracts are set aside for In addition, we have advice from
women entrepreneurs, recent data states OPEN Expert Anne E. Robinson, who
that only 3.4 percent of these designations outlines the inside knowledge that can
are utilized (Source: SBA). turn you from a novice into a specialist
It is possible that the complexity overnight. Our Cardmember Story puts
and confusion sometimes associated with the spotlight on Daytner Construction
government contracts is discouraging Group, revealing how it has built its
some women from making bids in the first percentage of federally contracted work
place. It is also conceivable that a lack of up from 5 percent to almost 50 percent in
resources or advice could be contributing the last year alone. Founder Theresa Alfaro
to some bids failing to make the grade. At Daytner stands as an example for anyone
American Express OPENSM we believe eyeing up a piece of the public-sector
these factors affect all entrepreneurs. That’s pie: With the right advice and the right
where this guide comes in. commitment, anything is possible.
3 government contracting — Government contracting —
MASTHEAD CONTENTS

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Edited and Produced by


Winkreative
611 Broadway
Suite 632
New York, NY
10012
www.winkreative.com 8 4

Creative Director —
Tyler BrûlÉ

Managing Editor —
Jennifer McAlear

Editor — 4. GOVERNMENT CONTRACTS —


ANTHONY BANKS THE ESSENTIALS
There are a number of steps involved in
Design Director — winning contracts from the government.
maurus fraser Here’s our step-by-step guide to gaining
your share of the $400 billion annual pie
Designer — Account Director, Winkreative —
MaDS TØRK Meighan Dobson 7. OUR EXPERT —
GOVERNMENT CONTRACTING
Photo Editor — Project Manager, Winkreative — OPEN Expert Anne E. Robinson shows
Stephen ledger-lomas Diana Keh you how to get your foot in the door, then
build a successful working relationship
Production Editor — Editorial Contributor — with the government
Jacqueline deacon ALICE BREDIN
for Bredin Business Information 8. CARDMEMBER STORY —
Sub-editor — DAYTNER CONSTRUCTION
LAURA VOGEL For American Express OPEN SM — We meet the woman who has drawn
Amy Fitzgibbons inspiration from her Hispanic culture to
Editorial Assistants — SARIKA SANGWAN build a company that is winning a steady
Claudia Corrieri Marcella shinder flow of substantial federal contracts
DAVID PROTERRA MICHELLE THOMPSON-DOLBERRY
4 Government contracting — Illustration: Shaun Doyle

the essentials

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The ESSENTIALS
Who wouldn’t want a client that spends more than
$400 billion each year? this is the essential guide to
ensuring your businesses secures its share
The U.S. Government is the world’s largest in navigating the process is difficult to find, —— Help Is Out There
purchaser of goods and services (Source: SBA). they can’t compete against large contractors Besides designating certain purchase How Does the Government
From airplanes to zippers, the bottom line – have all been conquered by those that have amounts for small businesses, the government Define Small Business?
is that if you sell it, there is every chance the been successful. also funds outreach programs designed
government might buy it. specifically to encourage and assist small The SBA characterizes a small business
Government contracts are not just —— The Power of Small businesses to participate in the bidding as a concern that is organized for profit,
for the larger companies – federal agencies In a typical year, the government process. These resources, offered through operates primarily in the U.S., or makes
are required to target at least 23 percent of enters into over 10 million “actions” – the agencies such as the U.S. Small Business a contribution to the U.S. economy by
their spending for small businesses (Source: federal term for a contract (Source: SBA). Administration (www.sba.gov), can help paying taxes or using American products,
SBA). Beyond this overarching target, the Some 95 percent of these represent purchases answer questions, and facilitate and demystify material or labor. The company cannot be
government has a large number of programs under $100,000, which the government the application procedure. dominant in its field on a national basis.
which are designed to help small businesses actively seeks to steer to smaller companies. There are also industry-defined standards
get their fair share of contracts. In fact, federal rules require that agencies —— Uncle Sam Is a Powerful Customer for employee size and annual revenue:
While there is much to gain, the target small businesses for purchases between Having the U.S. Government —— 500 for most manufacturing and
federal procurement process can be time- $3,000 and $100,000 (Source: FAR). as a customer can position your business mining industries
consuming, and challenging for small for significant and steady growth. The —— 100 for all wholesale trade industries
businesses to navigate. All agency contracts —— An Open Process government frequently buys in large volume —— $6.5 million for most retail and
must adhere to regulations detailed in When you’re selling in the private and sometimes, more significantly, it does service industries
the 1000-plus page Federal Acquisition sector, it is not always easy to know what so over a long period of time. This may not —— $31 million for most construction
Regulation (FAR) guidelines. your potential customers plan to buy. Federal translate into the business equivalent of a industries
However, once the skill set is agencies, however, are often required to winning lottery ticket, but being awarded a —— $23 million for computer
mastered, selling to the federal government publish their purchasing needs, meaning any government contract is momentous – it forms programming and IT industries
can represent a fantastic opportunity for business can go to a web site such as Federal a solid foundation for growing your company. —— $0.75 million annual revenue for
small businesses. Many of the concerns Business Opportunities (www.fedbizopps. Moreover, selling to the government gives you most agricultural industries
entrepreneurs have about government gov) to see what contracts are available. This a “stamp of approval” that will help you appeal For more information visit www.sba.gov/size.
procurement – it is too complex, assistance openness provides a leg up to small companies. to commercial vendors, too.
5 Government contracting —
becoming certified

—— Becoming a Certified American Industry Classification) code and company’s capabilities and qualifications. Americans are presumed to meet this standard.
Contractor by SIC code. You can look up your six-digit Because your CCR profile is one of the HUBZone Program: This program
Any company can apply to conduct NAICS codes at www.census.gov/epcd/www/ key marketing methods in selling to the is designed to stimulate and encourage
business with the federal government, but naics.html, and your SIC code at www.osha. government, think of it as an elevator pitch. economic development and create jobs in
your small business status can be a distinct gov/oshstats/sicser.html (though the NAICS Use it to succinctly explain what you offer and designated urban and rural communities
advantage in the contracting process. For codes have effectively replaced the SIC codes, what makes you unique. Include the URL through Federal contracting assistance.
example, certain small businesses may qualify the government still requires the latter). for your web site so that federal buyers can
for set-asides that can make qualifying easier. Financial routing information: As the learn more about you. And as your capabilities —— Claim What’s Rightfully Yours
Start your certification and registration process government prefers electronic-funds transfer for increase, update your CCR profile accordingly. Other identifications including
with these basic steps: invoice payments (Source: SBA), you will need background and gender can help certain types
to provide bank routing and account numbers. —— Use the SBA to Your Advantage of businesses in the contracting process.
—— Prep for Success These appear at the bottom of your check, but It can pay to be registered with the These include:
Before you register to sell to the contact your bank or financial institution to U.S Small Business Administration, which Women-owned business: A company
Federal Government, make sure you have all the confirm the necessary information. manages several programs designed to help that is owned and controlled 51 percent by a
requisite information organized. This includes: specific groups secure federal contracts and woman or women. There is a government-wide
A Data Universal Numbering System —— Build an Eye-Catching CCR Profile subcontracts. These include: goal to have women-owned businesses receive
(DUNS) number: The government identifies If you want to do business with the Small Disadvantaged Business not less than 5 percent of the total value of all
all contractors by a DUNS number, available Federal Government, then you must enter (SDB) and 8(a) Program: Designed to help prime awards entered into each fiscal year.
for free from Dun & Bradstreet (www.dnb. your business in the Central Contractor small businesses with disadvantaged owners Veteran-owned business: A business
com/US/duns_update/index.html). Registration (www.ccr.gov) database. to compete. For the SDB program, the that is at least 51 percent owned by a veteran.
A Federal Tax ID number (also known Agencies and prime contractors turn to this business must be at least 51 percent owned Service-disabled veteran-owned
as an Employer Identification Number [EIN] government-maintained database first when and controlled by one or more individuals who business: A business that is 51 percent owned
or Taxpayer Identification Number [TIN]): looking for potential vendors. When you enter are socially and economically disadvantaged by one or more service-disabled veterans, as
Apply for one via the IRS using Form SS-4. your information in the CCR, it pays to fill (Source: SBA). African Americans, Hispanic confirmed by the Veterans Administration,
Your classification: You will be asked out both the mandatory and optional fields. Americans, Asian Pacific Americans, can qualify for certain special procurement
to classify your business by NAICS (North This way, you paint a detailed portrait of your Subcontinent Asian Americans and Native opportunities and set-asides (Source: SBA).

What is the difference


between an 8(a) and a Small
Disadvantaged Business?

Both the Small Business Administration’s


8(a) program and Small Disadvantaged
Business certification are designed to help
small businesses whose owners belong to
traditionally disadvantaged groups.
While, on the surface, the two
programs appear similar, there are
often more benefits to getting the
tougher-to-land 8(a) certification. For
instance, 8(a)-certified businesses can
procure sole-source contracts from the
government. The 8(a) program also
allows for mentor-protégé relationships
that are not necessarily part of the
Small Disadvantaged Business program.
Finally, 8(a)-certified businesses
are awarded a nine-year business
development program with the SBA,
while Small Disadvantaged Businesses
are not (Source: SBA).

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6 Government contracting —
getting started

—— Start selling to search feature to look for “sources sought” —— Get Financially Fit
the government opportunities for your NAICS code. “Sources Government contracts do not pay in GLOSSARY OF TERMS —
You’ve registered your business with sought” opportunities are not contracts, but are advance, which means that you must ensure
the CCR and qualified for the appropriate notices from agencies that are looking to see if that your business has adequate cash flow DUNS (Data Universal Numbering System) —
certifications. Now, how do you start getting any small businesses have the capabilities they to get it through the billing and payment A database maintained by Dun &
ready to sell to the government? need. Responding to these lets you promote cycle. Before you start going after contracts, Bradstreet that is used by the federal
First, approach government your capabilities to agencies, and can put you it may be beneficial to have a line of credit or government to identify a contractor,
contracting with the same strategies you would in a good position once an actual bid is sought. other financing methods in place to ensure its address, telephone number, employee
use in the commercial sector. The federal you’re able to maintain your financial stability size and other information.
government is an enormous institution with —— Target Officials throughout the project.
hundreds of agencies with different needs and Once you’ve identified federal FAR (Federal Acquisition Regulation) —
requirements. Devise a plan to learn the needs agencies likely to work with you, make use of —— Line Up Your Advisors The principal set of rules that
of the myriad agencies so you can correctly the help offered by each. The Department of If you’re serious about going after government agencies must follow when
target your efforts. Use these guidelines to start Defense, for example, operates Procurement government contracts, confer with your purchasing goods and services.
your plan: Technology Assistance Centers (PTACs), professional advisors. For example, your
which can help guide your contracting attorney should understand how federal GSA (General Services Administration) —
—— Inspect Your Options plan; they also may organize matchmaking contracts work, and your CPA should be able An independent agency of the federal
First, check out the Federal events that connect you with procurement to help you with the financial aspects of these government that establishes policy for
Procurement Data System (www.fpds.gov), officers. Many federal agencies sponsor opportunities; if they don’t have the relevant procurement and secures the buildings,
a hub of government-contracting data, to monthly vendor outreach sessions, hugely experience, get references for those who do. products, services, technology and other
determine which agencies have a history of valuable face-to-face opportunities. Finally, Finally, consider working with a contracting workplace essentials that government
buying your type of goods and services. Next, agencies frequently have Offices of Small consultant to help you navigate the process agencies need.
visit the Federal Business Opportunities and Disadvantaged Business Utilization and learn how the government does business.
web site (www.fbo.gov), also known as (OSDBUs). Talk to them to find out about NAICS (North American Industry
FedBizOpps. This government-wide site is marketing opportunities within their agencies —— Prime or Sub? Classification System) —
used to announce all contract opportunities and get answers to questions about navigating The government frequently relies A set of categories developed by the
of $25,000 or more. Use the advanced the bidding process. on established relationships when selecting United States, Canada and Mexico to
contractors, which can hamper first-time provide common industry definitions
applicants (Source: SBA). Depending on within the three countries. In the U.S.,
the product or service you sell, it may be NAICS is replacing the SIC code system,
advantageous to begin as a subcontractor, but the government still requires both.
and use the experience you gain to help you
in future solicitations as a prime contractor. SIC Code (Standard Industrial
Large businesses with prime contracts worth Classification Code) —
more than $550,000 (or $1 million for A number established by the federal
construction projects) must provide a plan government to specify various industries
with subcontracting opportunities for multiple as defined by their function and products.
categories of small business (Source: SBA).
SBA (Small Business Administration) —
—— Get on the GSA Schedule The SBA was created in 1953 as an
Because a wide swath of agencies have independent agency to protect the
common purchasing needs – anything from interests of small businesses and maintain
coffee to computer supplies – the government free competitive enterprise.
centralizes some of this purchasing through
the General Services Administration (GSA). SDB (Small Disadvantaged Business) —
Under its GSA Schedule program (www.gsa. A term used by the government to define
gov/schedules), the GSA establishes long-term a business that is at least 51 percent
contracts that allow agencies to order certain owned and controlled by a socially and
commercial supplies and services directly from economically disadvantaged individual
GSA contractors. Becoming a GSA Schedule or individuals.
contractor can increase your chances for
contracts across all levels of government and is
an obvious business boon.
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7 OPEN EXPERT — Illustration: Noli Novak
GOVERNMENT CONTRACTING

Name: Anne E. Robinson


Job Title: Vice President and
Senior Counsel
Description: Provides legal
guidance for all
Small Business
Products and
Services
Member Since: 1990

EXPERT OPINION
obtaining and fulfilling government contracts
can seem daunting, but there is no need to be
intimidated, as open expert anne E. robinson reveals
The secret of making government contracts a “the FAR,” the bible of federal contracting. —— Promote Yourself as to whether or not their performance is
key part of your business is gaining a thorough When you meet with agency purchasing The government market is considered satisfactory. The problem lies in
understanding of their specific demands. officers, you may find them referring to the competitive, and to grow your business the fact that governmental organizations
While the art of building a relationship with FAR, particularly in terms of what they’re able you will need to develop a solid marketing often use language that can seem opaque to
a government agency is essentially the same as and not able to do. The must-read sections campaign that helps procurement officials the uninitiated – so it’s not your fault if you
with any other client, you must conduct your are Part 19 (Small Business Programs) and understand the benefits of working with don’t understand everything at first. But you
operations in a certain way to maximize your Part 52, which details the standard terms and your company. Past contracting success can have to get used to it, so learn government-
chance of winning the contracts, of fulfilling conditions of government contracts. You can lead to future contracts, so leverage your speak by attending as many information
them to the satisfaction of the agency, then of view the FAR online at www.arnet.gov/far. accomplishments in your marketing efforts, sessions as you can and perhaps even getting
consistently having them renewed. using case studies that show how you solved help from a contracting consultant.
In this sector, perhaps more than —— Build Personal an agency’s problem. Testimonials and referrals
any other, you must be able to draw on deep Relationships from successful government projects can also —— Keep Your House in Order
reserves of perseverance and patience to deal The networking skills that benefit a be invaluable. One caveat, however: Always get The quality of your documentation
with the circumstances that arise from working business in the commercial world can be used permission from the agency first – you need to can be the difference between keeping and
in such an accountable domain. Above all, the in the government sector as well. Cultivate make sure that your marketing collateral does losing government contracts. Develop a
following five areas need particular attention relationships with procurement officers to not disclose any part of a contract that could rock-solid paper trail by maintaining accurate
when it comes to meeting the unique demands learn about bid opportunities and familiarize be deemed sensitive. records related to all facets of your contracts,
of the government market: them with your skills. Get to know the client, such as important transactions and meetings
so that you are fully aware of their needs. Take —— Talk the Talk – you may need to refer to such information
—— Know the Rules advantage of government outreach events, Communication breakdowns are during project debriefings. Above all ensure
To succeed in contracting, it helps to such as agency procurement fairs, contractor one of the most common obstacles that you have a Quality Assurance and Quality
be intimate with the rules and regulations that matchmaking sessions and conferences to come between aspiring or inexperienced Control (QAQC) plan in place. Consider also
govern the process. Otherwise, you may be at cement relationships with buyers and suppliers. contractors and federal buyers. Contractors using a Customer Relationship Management
risk of doing something illegal that can put a Finally, by attending sessions where your do not always understand what they’re being (CRM) system to keep track of key factors
contract in jeopardy. These rules are published contracting contacts may be speaking, you can told by government purchasers, or they’re such as bid status, award data and profiles of
in the Federal Acquisition Regulation, aka find out some more about them. unable to read the purchasers’ messages decision makers.
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8 CARDMEMBER STORy — Text: Stuart Husband
Photography: Michael Edwards
DAYTNER CONSTRUCTION GROUP

www.openforum.com/openbook Name: THERESA Alfaro DAYTNER


Company: DAYTNER construction
group
Founded: 2003
Location: Mt airy, md

DAYTNER
CONSTRUCTION GROUP
two vital keywords for government contractors
are “tenacity” and “networking.” but For theresa
Alfaro daytner, they are also parts of her culture
Five years ago, Theresa Alfaro Daytner and is forecast to push the company’s annual people, you probably only need five really her mother studied geology at college and
attended the U.S. Small Business revenue into seven figures. It’s a triumphant strong contacts, so focus on those. Mentoring, would take Daytner and her siblings off to
Administration’s annual conference in vindication not only of Daytner’s decision to in the way Olga helped me, can be a huge look for fossils. “Most adults aren’t innovative
Washington, DC. Her company, Daytner focus on the lucrative government contracting bonus, but luck, in this context, is a matter of in their thinking; caution tends to kick in as
Construction Group – a construction sector but also of the strategy she used to court being prepared and making sure you’re in the you get older,” she says. “My parents were the
management and consulting company which federal procurement officials, which can be right place at the right time.” opposite, and I’ve inherited that single-minded
represents building owners in overseeing summed up in one word: tenacity. Daytner also credits her ethnicity and streak.” For a start, Daytner realized that it
aspects of building assembly from budgeting “Getting that initial foot in the door gender as significant factors in her success. wasn’t her destiny to be an employee in a large
through construction and move-in – was when it comes to government contracting “Hispanic culture is very supporting,” she company. “I’ve found it impossible to work for
looking to break into government contracting. costs more and takes longer than you’d ever says. “I’ve met a few Hispanic high rollers, anyone but myself,” she says, laughing. “The
Over drinks and canapés, she met a woman imagine,” says Daytner with a laugh. “There’s a who think nothing of giving you access to number of times I’ve heard, ‘If you could just
named Olga Martinez, who also ran a huge learning curve to figuring out the system. their own networks of contacts. That’s been learn to focus, you’d be alright….’ She trails off,
construction company. “She really took me Given that, it makes sense to have already been hugely helpful. Plus I love letting my hair exasperated. “I saw my lack of focus as a gift.
under her wing,” says Daytner. “The day after I in business for two or three years. Very few down with my people.” But from talking to I’m a creative, innovative thinker, and I have a
met her, she was due at Capitol Hill to testify companies start by selling to the government, the effervescent Daytner, one feels she would lot of energy.”
before the Small Business Committee, and she unless they happen to be retired government have made it regardless of her background. “I Daytner plowed that energy into
took me with her and introduced me to all the employees themselves, and already know the always wanted to be a financially independent her own enterprises. She started a roofing
top players in government contracting. It made procedures. Other than that, be persistent,” woman,” she says emphatically. “I would say company as a young mother in her early
all the difference.” Daytner advises. “Put in the face-time, meet I’m pretty competitive. I wasn’t about to be twenties: “My then-husband was a roofer and
Today, Daytner Construction is the right people at expos and trade fairs, show mediocre or average.” I saw that most of his contractors were quite
working on its largest federal contract – a two- up and cultivate relationships so that they Daytner’s clear-sighted confidence unprofessional,” she says matter-of-factly. “So
year, $52 million construction project in DC recognize you and know you’re a serious player and ferocious work ethic were instilled in her I thought, well, it can’t be hard to improve on
for the General Services Administration. This who’s here to stay. Get involved in business by her parents. She was born and raised in that. I just have to advertise, get the licenses
job has bumped up her company’s percentage organizations” (Daytner is currently vice- Maryland; her father, a Chilean/Venezuelan and insurance, set up a commercial number,
of federally contracted work to almost 50 president of the Maryland Hispanic Chamber immigrant, worked in many different fields, get reliable laborers, and go through the
percent up from just 5 percent a year ago, of Commerce). “You don’t need to know 500 including publishing and hairdressing, while home-builder phone-book. By the time I got
9 CARDMEMBER STORy —
DAYTNER CONSTRUCTION GROUP

to B we had more work than we could handle. “I’m pretty good at not carrying baggage, and private-commercial sector split that Daytner
That experience formed my business mantra: I’m not a control freak. Just because something originally envisaged. “The mix is good, because
Use your initiative.” has traditionally been done in a certain way, one sector can help prop up the other,” she
A couple of years later Daytner left it doesn’t mean it’s set in stone. We’ve got says. “But for us to have this large, high-profile
her husband and nascent roofing company around 15 employees at a 50-50 male-female government project is huge; it’s great for our
and became a CPA. “I never saw accounting split, and we make a lot of our policy on the business development.”
as a be-all and end-all,” she says, “but it helped hoof. For instance, we cover 100 percent of our In 2006 Daytner won the Make Mine
broaden my experience, and also gave me more employees’ and their families’ health insurance. A Million $ Business program – designed to
respect and credibility as a businesswoman.” In That’s unusual, but extremely important to us. help female entrepreneurs grow their businesses
1990, she was working as a project accountant That’s where a family-friendly culture starts.” with a combination of money, mentoring and
for a general contractor in DC when she met Daytner set up the construction marketing – but now she has her eyes on a
her second husband Allen, who was the project company with a view to getting government different kind of prize.
manager. She continued to work as a CPA contracts. However, in their first four years of Daytner is in talks to set up a strategic
operating her own practice until 2001, but in business, their revenues were in the private alliance with a much larger international
2003 she decided to set up her own company sector. “The federal government is extremely construction firm. “They’re much further
with her husband. “I convinced him that he focused on past performance,” says Daytner. along their life-cycle than we are,” she says,
should combine his technical skills with my “They can’t afford to take too many risks on “and we can get each other into mutually
entrepreneurial experience,” she says with a untried companies. It can be a bit of a catch- beneficial territories. It would be like a great
laugh, and Daytner Construction Group was 22; that’s where you have to put the legwork marriage. And our cultures are aligned.” The
born. The early years of the company were in and God knows I did.” Last year, Daytner latter is surely an allusion to the fact that the
exhausting – at one point, Daytner had four Construction won a couple of small contracts company she’s teamed up with is is owned
children under 10 (including 18-month-old for the U.S. Naval Academy in Annapolis, and run by another Hispanic woman. Given
twins) plus two teenage daughters to deal which, along with the advocacy what Daytner has accomplished to date, both
with – but, she says, she and Allen became of Olga Martinez, set them up nicely in government contracting and in her personal
champion jugglers of their family and business for their current contract. The company is life, this formidable coalition will certainly
lives. “We simply made it work,” she shrugs. now operating at the 50-50 government/ be unstoppable.

OPPOSITE PAGE TOP


Theresa and Allen’s Theresa confers with
For more info on blueprint for success colleague Kim Seal
Daytner Construction
Group see: ABOVE LEFT ABOVE
www.daytnercorp.com A new angle on the Keeping the plans on
daily grind the level
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10

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that provides a combination of money, mentoring,
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entrepreneurs need to help grow their businesses
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