Glynn, president and chief executive of Bethesda-based Glynn Technologies, said her company earned $5.65 million for more than two years' work managing Web sites for the agency. Now, her once 20-person firm is down to just four employees and she is trying to find commercial work as she struggles to rebuild the company.

Her predicament demonstrates the struggle faced by many smaller government contractors, some of which rely on just one or two contracts. As the budget shrinks, industry advocates say, these companies become even more vulnerable.

"There are very few small businesses that are able to handle a lot of . . . contracts," said Kevin Baron, director of government affairs at the American Small Business League. Instead if they can lock on to a few "good contracts that can sustain them for quite some time."

Glynn started her company when she was in her 20s. Glynn Technologies helped develop the y2k.gov site for the Clinton administration and the Obama administration's whitehouse.gov site, she said.

But what has sustained the company in recent years was long-term work operating and maintaining a set of Health and Human Services Web sites, including hhs.gov, flu.gov, healthreform.gov and others. After three years overseeing the sites, Glynn Technologies received a follow-on contract in 2008 to continue for up to five more years.

Even though Glynn's company received high marks in a late-2009 performance review, HHS informed Glynn in the summer of 2010 that it would not be exercising the additional option years and would instead recompete the contract.

In a statement, the department said the decision to end the contract "was based entirely on the Department's increased needs, which were not included in the contract and could not be awarded to Glynn Technologies on a non-competitive basis."

After Rep. Chris Van Hollen (D-Md.) contacted HHS in support of Glynn, the department responded that Glynn, while given an opportunity to bid on the new contract, did not submit her offer before the deadline. Consequently, "the proposal could not be evaluated."

Glynn denied turning in the proposal late and said the government has not been able to document it.

She's not the only one facing a more uncertain contracting environment. Small-business advocates warn that the government will need to pay close attention to ensure policy changes, like moving more work in-house, and budget cuts don't disproportionately hurt small businesses.

"Clearly if you're small, any change or any perturbation has a greater impact," said Stan Soloway, president and chief executive of the Professional Services Council, a contractor trade group.

Glynn said she is now trying to pick up the pieces, building a social media site with some paid content. Additionally, Glynn Technologies has some work with commercial financial institutions and is teaming with other companies in pursuit of government contracts.

"My goal is to survive," said Glynn. "But I have to definitely rebuild, and I am pretty much starting from scratch."

Source: http://www.washingtonpost.com/wp-dyn/content/article/2011/02/18/AR2011021805782.html