Looking to uncle Sam: increased government spending means lucrative contracts for small businesses. (Management Advice).

In the wake of last year's terrorist attacks, President George W. Bush increased funding for homeland security--to the tune of $37.7 billion for 2003. This is nearly double the $19.5 billion budget for 2002. As a result, there are more government contracts available to small businesses provided they're properly prepared to navigate the red tape.

"There's a certain level of bureaucracy in the process, and you can't look at the process as being an impediment," advises Robert L. Wright, who formed Dimensions International Inc., an information technology and engineering firm located in Alexandria, Virginia. "You must figure out ways to meet the requirements."

Wright is an example of a black entrepreneur who managed to land government work in spite of the challenges. When he launched the firm in 1985, he began by cold-calling government agencies. After due diligence and lots of paperwork, his firm landed its first contract worth $4,800 to design architectural drawings for offices of the Immigration and Naturalization Service. His efforts paid off. Revenues for 2001 were approximately $53 million.

For small minority-owned businesses, access to these contracts has always been particularly challenging. Proposed legislation, such as the Small Business Contract Equity Act by Rep. Nydia Velazquez (D-N.Y.), requires that an agency provide a copy of a bid solicitation to the Small Business Administration when the contract results in the displacement of a small business. Then the SBA makes a determination as to whether it is a bundled contract (contracts too large for small businesses to handle, therefore, blocking them from participation). The bill is currently stalled in the House Committee on Small Business, of which Velazquez is the ranking democrat.

In the meantime, minority-owned small businesses can take the following steps to help improve their chances of landing government contracts:

* Apply for an 8(a) designation. Run by the SBA, the 8(a) Business Development Program is designed to provide business development and technical assistance to socially and economically disadvantaged businesses and to help them gain access to the domestic economy. To apply, contact an SBA regional office. A list of offices is available at www.sba.gov/ regions/states.html.

* Learn the facts. A good place to start is Federal Business Opportunities (www.fedbizopps.gov/). The FBO Website has links to various government agencies and a searchable database that lists available government contracts.

* Work with a larger firm. This is the best way to gain experience and learn how the contracting process works. Contact a larger business and ask to be included on the approved vendor-supplier list. The SBA Website (www.sba.gov/GC/index contacts-sbsd.html) offers a state-by-state list of first-tier firms looking for subcontractors.

* Attend trade shows. Government agencies often connect with small businesses through these venues. The Federal Business Council, a firm that assists technology companies with marketing their products and services to federal agencies, organizes events and conferences for government agencies looking for minority- or women-owned small business vendors. Their Website is www.fbcinc.com/.

* Get a professional to help prepare a bid. This is usually only needed when going after a larger contract requiring more paperwork and due diligence. Proposal-management companies typically charge between $40 an hour for an administrator to $250 an hour for an expert to assist with the front-end strategy for a contract. Average rates hover around $175 an hour. Representatives from these firms are usually at trade shows.

Even so, it's not a guarantee that you'll land contracts. There's plenty of red tape, as well as competition, so it pays to be patient and persistent.