Bootstrap Business

Leaders of the blind and disabled groups who sell goods and services to federal agencies are struggling to adjust to the new federal procurement arena.

onald Hinson leaves his wife and daughter at 4 a.m. to make the series of connections that will take him from his Baltimore neighborhood to the Agriculture Department's George Washington Carver Center in Beltsville, Md., by 6:30, employing an exhaustive combination of public and private transportation. He speaks of his tortured commute so resolutely that it's easy to forget he accomplishes it all without the benefit of sight.

"I had an option to stay in Baltimore, but I wouldn't have been doing what I wanted to do," says the former Washington law clerk, who became 100 percent blind in 1993 when an operation to stem the effect of glaucoma actually hastened the loss of his vision. "I spend 15 hours a day away from home, but you do what you have to do to provide for your family." Hinson is one of six blind people who work in the copy center of the Carver Center, which handles administrative services for various USDA agencies. The employees troubleshoot the 66 photocopy machines that dot the Carver Center's labyrinthine campus. The team also produces many of the documents published by USDA's Washington-area offices. The copy center's employees operate under a contract with Blind Industries and Services of Maryland (BISM), one of more than 600 state and local nonprofit organizations employing people who are blind or severely disabled under the federal Javits-Wagner-O'Day (JWOD) Act.

A review of the comment sheets that accompany each order processed by the copy center yields virtually unanimous praise for the team's ability to meet deadlines, even when they seem unrealistic. Commendations for professionalism and friendliness run a close second. In an August visit, David Nau, a BISM manager who supervises the copy center workers, presented Hinson and his co-workers with a plaque on which a letter from the USDA's inspector general was posted. Unlike most correspondence from an IG's office, the contents were singularly complimentary.

JWOD products and services are deemed "mandatory sources" under federal procurement regulations. This status dictates that only after determining JWOD providers cannot meet their needs may a federal purchaser legally turn to another supplier for goods and services. But the revolutionary changes in government and business over the last five years, and an inability to police those who do not adhere to the mandatory sourcing regulations, have buffeted the 62-year-old JWOD program.

When Franklin Roosevelt, the only disabled President in the nation's history, signed the Wagner-O'Day Act in 1938, the blind people then covered by the law were thought incapable of producing anything more complicated than mops and brooms. People with severe disabilities were included in the program under a 1971 amendment sponsored by Sen. Jacob Javits, R-N.Y. Today, products manufactured by blind or severely disabled employees travel to battle in the form of Army canteens and camouflage, and adorn the desks of bureaucrats and businesspeople alike under the SKILCRAFT brand of office supplies. Employees with disabilities work on JWOD contracts everywhere from the Library of Congress to the Pentagon to the Statue of Liberty. Last year, the General Services Administration needed a reliable contractor to restore the historic Mellon Building complex in Washington in time for the 50th reunion of the signing of the North Atlantic Treaty Organization's charter. GSA turned to The Chimes, a JWOD nonprofit agency in Baltimore that helps individuals with disabilities become self-sufficient. The delicate job, done flawlessly and on time, was so appreciated by NATO that each worker involved in the project got a personal letter of thanks.

Despite this progress, the JWOD program, born as America was recovering from the 20th century's greatest economic crisis, faces an uncertain future at the height of the most enduring prosperity the nation has ever known. Reforms intended to decentralize government procurement, the explosion of Internet purchasing by agencies, and competition from private companies have all threatened to invade the limited niche filled by nonprofit JWOD associate organizations.

The crisis has generated uncharacteristic unity among JWOD's sometimes factious constituencies. Rather than rally for more rigid enforcement of mandatory source provisions, or appeal to public sympathies, the National Industries for the Blind (NIB) and their counterparts at NISH (formerly known as the National Industries for the Severely Handicapped, but now solely by its acronym), in conjunction with the Committee for Purchase From People Who Are Blind or Severely Disabled, the JWOD program's federal overseer, have rallied to meet the complexities of the Internet age. Each is in the midst of an aggressive campaign to retain and expand the pie to which their clients are legally entitled.

Fred Puente, the gregarious president of BISM, typifies the 21st century executive of a JWOD associate. Equal parts corporate cheerleader ("The first requirement of working here is having fun"), marketing pitchman ("I firmly believe that the only thing people who are blind can't do is drive a car"), and social worker who, during a tour of his site, speaks by name to dozens of employees and elicits more workplace hugs than the average business leader might expect in an entire career, Puente never loses focus on the bottom line. BISM's responsibilities, like those of most other JWOD nonprofits, include providing rehabilitation services to a portion of the 150,000 people annually served by partners of NIB and NISH. Every dollar of income represents an opportunity to invest in these services. "I'm not asking [agencies] for special treatment. Just give us a chance to fail," says the former Army lieutenant, in a voice stern enough to let you know that he has no intention of allowing his organization to do so. The business mantra could serve as a motto for the entire JWOD community.

The JWOD Squad A discussion with JWOD's national leaders is prefaced, peppered throughout and closed with one singularly disturbing statistic: The unemployment rate among people who are blind or disabled is 70 percent, and has actually increased slightly in this era of virtual full employment. Despite the inroads made by the JWOD program, its affiliates still employ only 34,000 people, leaving 23 million Americans with disabilities unemployed or underemployed. The weight of these numbers explains the "our work is never done" mentality that pervades the community. Another factor, cited repeatedly, is the dedication of the associates' front-line staff. "Not a day goes by when I don't meet someone I would nominate for sainthood," says Dan McKinnon, who was president of NISH until late this summer. "The disability community is like the military in that the people who work there have chosen careers in service to others over service to themselves," says the retired Navy admiral.

Indeed, there is a distinct military flavor throughout JWOD. Lee Wilson, the executive director of the Committee for Purchase from People Who Are Blind or Severely Disabled, is a retired Air Force general. Moreover, the armed services are, by far, the largest customer for JWOD programs. Many of the innovative opportunities that NIB and NISH have found for their employees are on military bases. JWOD organizations employ thousands of disabled people in food service organizations on bases, and the number of Base Supply Centers operated by program associates has ballooned from four in 1996 to more than 80 in 1999, representing nearly $28 million in sales. "There is certainly some connectivity between our programs and the military," he says. "Personally, as a retired officer, I wanted to give back some of my experience to those who didn't have the advantage that I had."

The military experience of Wilson and McKinnon may come in handy as they, along with NIB President Jim Gibbons, take on the task of revamping a JWOD structure ill-suited for the revolution in federal purchasing.

Reinvention Tension When skeptics ask for tangible results of Vice President Al Gore's eight-year reinventing government effort, defenders invariably put federal procurement reform at or near the top of the list. Embodied in the 1994 Federal Acquisition Streamlining Act, Executive Order 12931 issued by President Clinton in October 1994, and the 1996 Clinger-Cohen Act, the abiding goal of the movement, has been a reduction in the paperwork and regulations involved in the procurement process. The federal purchase card quickly became a major tool for implementing the new approach. In 1989, fewer than 10,000 federal employees held such cards, which have been used primarily for micropurchases, those under $2,500. A decade later, 500,000 cardholders ran up a tab of more than $10 billion.

Doubtless Gore and his reinventors had no intention of wounding the JWOD program as part of their purchase card strategy. In fact, while procurement reformers scrapped provisions that had favored small businesses and American-made products for micropurchases, JWOD retained its universal mandatory source status. Nevertheless, the move toward a decentralized procurement strategy based on widespread use of purchase cards has had a dramatic effect on JWOD.

Traditionally, agencies made many of their purchases through the General Services Administration, which stockpiled goods in warehouses-and made sure that the appropriate percentage of those goods came from JWOD associates. In July 1999, however, GSA moved to close its network of eight warehouses. GSA, which said it was racking up six-figure losses annually running the depots, sought to have vendors supply agencies directly. The move, brought on in part by the successful effort of private sector suppliers to sell to purchase card users over the Internet, rocked the JWOD community. NIB, whose product-oriented enterprises (as opposed to the service-based nature of most NISH agencies) distributed more than 60 percent of its goods through GSA warehouses, was particularly hard hit. At the time, Gibbons warned, "The domino effect [of the closings] could jeopardize the entire program." Within weeks, orders slowed to a dribble for some JWOD products, and for the first time in recent memory, layoffs took place among NIB associates. Wilson notes that the psychological effect of such turmoil is even greater when considering the past experience of JWOD participants. "Some of our clients have never worked anywhere else in their lives," he says. "There's nothing more destructive than to lose one's job. To give them a taste, then take it away, is cruel." GSA eventually decided to leave two of the warehouses open, in large part due to protests by unions representing depot workers, but the leaders of JWOD enterprises recognize that in the age of e-commerce, the handwriting is on the wall for the warehouse system. JWOD sales through GSA have declined from $238 million in fiscal 1998 to less than $150 million so far this year. Overall, federal government sales by NIB are stagnant, with 1999's $235.4 million equaling the amount generated in 1995.

"It was just a matter of time until we had to change our business practices. We had to get in touch with the people who are buying our products," says Wilson. "If we never got in touch with the customers, our product line would die."

Indeed, some JWOD associates have fared well in the procurement reform era. Last year, the total sales of NISH enterprises rose by more than $100 million, to $706.2 million. But even the potentially lucrative service contracting arena is threatened by the constant evolution of procurement procedure. The increase in "bundled" contracts threatens to crowd the small community rehabilitation programs that NISH oversees out of the marketplace.

JWOD 2K In the face of such changes, JWOD leaders are undertaking their own reinvention. That means taking some unprecedented steps. For example, even though both NIB and NISH are headquartered in Northern Virginia, they had never formally come together until earlier this year to discuss their common interests in nearly 30 years of coexistence.

The meeting was the beginning of what will likely be a long process. "You don't try to eat the elephant in one sitting," Wilson says. "This was an important first step to get everyone to jointly talk about issues."

Wilson hopes increased collaboration will eventually produce an integrated marketing strategy for the two groups focused on growing the services side of the business for both agencies and involving closer relations with end customers. The scheme is part of his ambitious plan to increase the number of jobs available through the JWOD program to 50,000 by creating 16,000 new jobs over the next three years.

NIB's Gibbons, a graduate of Harvard Business School who in 1998 became the first blind person to lead the organization, is introducing the marketing savvy he developed as CEO of an AT&T subsidiary to the group's product line. Gibbons says he discovered that, "until three years ago, our packaging was essentially brown boxes." He has addressed this element of the business as a part of an overall branding strategy that he began pushing last year. The centerpiece is what Gibbons considers NIB's most valuable asset beyond its workforce: the SKILCRAFT name.

Gibbons believes that people buy SKILCRAFT now because of its reputation for quality and functionality, as well as to meet procurement mandates. By tying these factors to an image of SKILCRAFT's employees as inspirational and dedicated, and pitching more aggressively to the private sector, he hopes to realize growth of 10 percent to 15 percent annually. The spirit of the campaign is manifested in the slogan Gibbons envisions for the products: "Got a tough job to do? Let us help. SKILCRAFT . . . . Bring it on!"

On the technology front, the Committee for Purchase From People Who Are Blind or Severely Disabled took to the Internet with an informational Web site (www.jwod.gov) in 1995. In October 1999, shortly after GSA announced plans to shutter its depots, Online Office Supplies, a private firm that works with NIB, signed on to upgrade the technology behind JWOD's net presence.

Under an NIB-managed effort, jwod.com began taking retail orders in January. The site flags products that federal buyers must buy through JWOD, part of an overall effort to reinforce the regulatory underpinnings of the program. Gibbons says the move to electronic purchasing is a blessing for the JWOD community. "Technology is the great equalizer," he says. "This is another example of using technology to sustain employment opportunities for our affiliates."

Appealing to one of the banks that has underwritten much of the purchase card explosion, NIB has forged a "Partnership for Smart Buying" with U.S. Bancorp, through which federal employees holding U.S. Bank purchase cards will be regularly prompted to abide by procurement regulations and purchase JWOD products and services. The partnership has led to discussions for similar deals with other banks that participate in the purchase card program, including Bank One, Citibank and Bank of America. GSA already is including reminders to agencies about JWOD regulations in its catalogs and on its e-commerce Web site, GSA Advantage!

(www.gsaadvantage.gov). In March, at the urging of advocates for the blind and disabled, President Clinton issued a governmentwide memorandum with similar instructions to federal employees. Seeking to broaden its customer base, the Committee for Purchase From People Who Are Blind or Severely Disabled negotiated a memorandum of understanding with the Interior Department and the Environmental Protection Agency that puts JWOD at the center of a campaign to encourage environmentally friendly purchasing. And in what would be a boost to NISH as well as NIB's efforts to expand their presence in the services arena, the Federal Acquisition Regulation councils have proposed an amendment that would confirm JWOD's priority status at the subcontract level under certain circumstances.

In their various efforts to ensure a bright future for the communities they serve, the heads of the JWOD program are attacking their task with the same tenacity that blind and disabled employees like Donald Hinson exhibit just getting to work each day. More than six decades of experience overcoming challenges says that, given the chance to fail, they won't.

Beyond the Monopoly Mentality

As the youngest of eight children, Jim Gibbons, president and chief executive officer of National Industries for the Blind (NIB), knows what it's like to claw for limited resources and assert oneself in a crowded field. The experience, coupled with stints as an executive at an AT&T subsidiary and a degree from Harvard Business School, would seem ideal preparation for his position atop one of the three agencies established to implement the Javits-Wagner-O'Day Program, particularly as federal agencies adopt private-sector procurement practices.

When he joined NIB in 1998, Gibbons became the first blind leader of the then 60-year-old agency. The father of three, who gradually lost his sight while in college in the early 1980s, has proven both a cutting-edge innovator with a keen sense for shaping the agency's future and an inspirational role model for the thousands of individuals served by and employed through NIB and its associated agencies across the country.

The decision to dedicate himself full time to advocacy for the blind was a complicated one for Gibbons. "I always thought I could do more for people who were blind by being accomplished in the sighted world," he says. But, having learned about the invaluable work that NIB did while interacting with members of its board, Gibbons leapt at the chance to reinvigorate the organization. He arrived as the first effects of procurement reform were beginning to be felt by the organization. The impact was immediate.

"For several reasons, NIB struggled to break out of a monopoly mentality prior to 1998," according to Gibbons. "In the last two years, we have developed a marketing plan and evolved to be customer-driven."

Gibbons' goals go beyond strengthening the JWOD program. "One mission of mine is to drive talent that happens to be blind into business leadership," he says. His own remarkable career makes this once unlikely prospect seems eminently possible.