Contracting 101: Start with patience and value
- By Joyce Bosc
- Oct 02, 2008
Small businesses with big aspirations often look to government for sales opportunities, but the size of that government-sales undertaking can be overwhelming.
Yes, smaller jobs may be sold to government through a simple purchase order, but true success in getting government business takes more. To become established as a trusted government contractor, your company must be prepared for a resource-intensive process that might take as long as two years. The commitment is big, but the successes can be even bigger.
There are no real shortcuts to becoming a government contractor. However, an understanding of available government support services and tools can make navigating the process simpler and more efficient.
An emerging type of service provider for aspiring contractors is the business development consultant. Often retired from government or from established contracting firms, many consultants offer proposal writing, training and capture management planning to anticipate government sales needs and request-for-proposals opportunities. These experts use their extensive knowledge to steer less-experienced businesses through the complexities of the federal procurement process.
Among the leaders in this emerging field is Bob Lohfeld of the Lohfeld Consulting Group. He suggests that all aspiring contractors ask themselves three questions before venturing into government sales:
- What is your value proposition to the government market? What benefits do you provide to the government? What do you want to be? Equally important, what do you not want to be? By understanding your value proposition, you ensure that you do not chase opportunities that might lead in unprofitable directions.
- What is your intended market segment? The government marketplace is comprised of a number of buying organizations, or market segments, each with its own culture. For example, what appeals to the Navy might not appeal to NASA.
- Work smart: To improve the likelihood of success, your value proposition must appeal to a particular market segment.
- How can you leverage government programs? The federal government has established certified business categories and contracting vehicles for companies that meet particular demographic and/or size requirements or areas of expertise.
To help answer the third question, let's look at business categories and contracting vehicles:Disadvantaged businesses
The 8(a) Business Development program established by the Small Business Administration (www.sba.gov) allows "socially disadvantaged individuals" to gain official status. This status allows 8(a) companies to compete for the set-aside goals for contract work with the federal government.
Under those goals, 23 percent of all prime contracts are set aside for small businesses; 5 percent of prime contracts and subcontracts are for small disadvantaged businesses. Also, five percent of prime and subcontracts are for women-owned small businesses; three percent are for service-disabled veteran-owned small businesses; and three percent are for Historically Underutilized Business Zone small businesses. (The last category is designed to spark economic development in urban and rural communities.)
For small companies, the 8(a) program is a good way to get your sea legs and compete against similar companies rather than going head-to-head against a billion-dollar business with far more experience.Contract vehicles
The General Services Administration establishes governmentwide contracts with commercial firms for more than 11 million commercial products and services. The GSA's schedule covers specialization categories for everything from information technology to advertising and integrated marketing services.
Some consultants specialize in helping businesses secure GSA Schedule contracts. The cost can range from $7,000 to $40,000, and the application process can take from a few months to a year. Some companies choose to qualify for as many GSA Schedule categories as possible; others choose the category that most closely matches their core capabilities.
After you receive GSA Schedule acceptance, you have a license to fish, but that doesn't mean the fish will jump in the boat; marketing yourself to the government is essential. However, the good news is that you are effectively pre-qualified from the buyer's perspective.
One GSA Schedule, Mission Oriented Business Integrated Services, is particularly useful for integrators with diverse offerings. Agencies have their own preferences for one contract vehicle over another. For those just starting out selling to the government, it's up to each company to determine which schedules or contracting vehicles are best suited to their needs and capabilities.Subcontracting
If a small business has no previous experience working with the government, the best education might come from subcontracting to a more established company that is the prime on a contract with a broad scope. Despite having no prior government experience, smaller companies with unique or complementary skills might be attractive subcontractors to large primes. Because there are nuances to working with the government, subcontracting gives a company insight into the process -- and into the fulfillment of contract deliverables.Relationships and organizations
The most important aspect of government sales is establishing relationships with government program management and procurement professionals. Relationships often are developed directly by making presentations to agencies during their budget forecasting and planning periods. Although this is a good start, the strongest relationships often are built at professional development conferences and networking events.
The Armed Forces Communications and Electronics Association, the Industry Advisory Council, the Professional Services Council, the Information Technology Association of America, and similar organizations frequently hold panel discussions and seminars. Those events are ideal opportunities to meet with leaders from government and industry; also, already established contacts can help facilitate introductions to other influential individuals.Market Yourself
Industry analyst relations is one of the most underused and misunderstood marketing tactics for business development. Companies such as FedSources, Input and Gartner have broad experience in reaching out to the federal government. Developing awareness with these groups creates third-party credibility to support company business development efforts.
It's not enough to use analyst data to track upcoming or current requests for proposals. Look for opportunities to get supporting quotes to validate company claims. Consider sponsoring analyst-driven events. Analyst panel discussions and seminars draw both government and commercial attendees, and sponsorship can lend a perception of authority to even fledgling contractors.
Remember, it can take years to establish your company as a government contractor. With careful preparation you can stay positive and focused, even through the early lean times.Joyce Bosc (email@example.com) is president and chief executive officer of the public relations firm, Boscobel Marketing Communications.