Becoming successful with government contracting is not an easy feat. There are a lot of small businesses that are trying to enter this vertical – and many of these businesses would likely profit from such a relationship. However, most do not have the resources or the time to go through with the process. This is where it would be useful to outsource your business to government sales (B2G) and marketing program to a company dedicated to that function.
At PublicSpend we specialize in an array of services for small businesses which include researching and identifying government contract opportunities, comprehensive proposal writing and online government qualification marketing to name a few. It is crucial to be highly organized from the beginning of this process which is why I recommend that any business that wants to be successful with government contracting develops a B2G marketing plan and hires a dedicated sales team. It is important to determine if the ROI will be there and if there is potential to develop this aspect of your business.
The first step in the process is to understand the context in which your product or service could be used and determine which government agency could use it. Next, you need to review information on being a vendor for that agency by reviewing information on their website. If you are a small business – I would start off by contacting the small business liaison for that agency and discuss your products and the requirements for selling to that agency and any small business incentives/programs that may exist.
Once you have completed this research, you will know what steps are required for your products. These will include some general steps you need to take, (such as having a DUNS number, registering in the CCR and so forth if you want to contract at the federal level). You also will want to become familiar with the typical procurement requirements/contract language for your products.
One of the best strategies for entering the federal sector is to partner with a larger company. All the primes have small business requirements they must meet. Select several that are in the target market that you are interested in and develop a relationship with them. Most large companies have a small business liaison – just like the government agencies do. That person is the best place to start. You should also try to connect with any contacts that you have within those companies to research the best way to establish a working relationship. Some primes have pre-qualification procedures in place – so you will want to find out what those procedures are – because they can be lengthy.
You also want to get in on the ground floor for opportunities. The best time is in the pre-solicitation or sources sought phase. When you join a team at this point – you will be able to influence the resulting RFP (if the agency has a comment period) – and will be able to develop depth to your relationship with the prime before the RFP hits the streets.
At the state and local (county) levels you will want to follow similar steps in the beginning although you will obviously need to register with the state or municipality that you want to conduct business with. Again, identifying the right contract opportunities and building meaningful relationships with government takes time and resourcefulness – which is why outsourcing may be a good idea.
At PublicSpend we provide a number of services to meet the needs and resources of small businesses looking to be successful with government contracting at any level of government. If you wish to learn more information, you can contact us at 305-600-4576 and one of our associates will be glad to assist you or answer any questions that you may have.
Having spoken with a number of local, Miami-Dade County government vendors it appears that many federal government contracts are going to big business. Despite the reasoning that government has a local preference and that it aims to help out small business, this has not entirely been the case. Throughout Miami-Dade County various workshops and seminars have been held for small businesses that hold such certifications as a SBE or CSBE. Despite programs aimed at generating activity for small business and the local community it has been increasingly difficult for small, local companies to win government contracts.
According to local vendors, most of the Miami-Dade projects are going to medium and large companies while small companies are sitting at home or attending these seminars trying to win new work to sustain their businesses. Other companies with little luck are simply disappearing from the market.
Meanwhile companies like Dell Computer, General Electric and Boeing have moved in. All three were actually counted as “small businesses” doing work in Florida last year. These three Fortune 500s – along with a dozen other billion-dollar companies – soaked up at least $76 million in federal contracts that were recorded as going to small businesses during fiscal year 2008.
The issue of how federal dollars are spent is critical in a state like Florida where 90% of all businesses have fewer than 20 employees and government contracts represent a valuable lifeline amid a tanking economy. While the federal government should be giving around 23% of all direct, or prime, contracts to small companies it has missed the mark during the last three years.
It is simply not fair that Fortune 500 companies have been recorded as “small companies” in federal government contracts. According to the Small Business Administration small companies throughout the U.S. have received a record $93.2 billion in prime contracts in 2008. While that was $10 billion more than the previous year, it only represented 21.5% of all deals.
Some U.S. government agencies have been overstating their commitment to small business. Under federal guidelines, companies that start small and grow large – as well as small companies that are acquired by larger firms – can maintain the small-business status of their long-term contracts for up to five years.
The multiple loopholes, incomplete government data and the challenge of prying information out of privately held companies make the problem difficult to quantify.
The American Small Business League estimates more than $100 billion a year in small business contracts goes to Fortune 500 companies and others that are clearly not small.
Even successful small businesses have found the process challenging.
Structured Cabling Solutions, a Hialeah, Florida company that designs and installs data and communications networks, spent about nine months compiling the documents required to become a government contractor.
Among its 32 employees are two estimators and three project coordinators who focus on drumming up new clients. But even with an experienced staff, the process of bidding on federal contracts is so time-consuming the firm can only compete for a handful a year. The company only pursues Florida deals but often finds itself up against out-of-state firms with a strong national presence.
Large companies clearly have an advantage because they can afford to play the numbers game and submit more bids at lower prices leading to greater chances of success – particularly in a bad market.
The company recently won its first contract — a deal with the National Park Service to provide data and electricity cabling in the Everglades.
The contracting issues are not new. The Government Accountability Office and the SBA have produced more than a dozen reports since 2000 highlighting problems. While some contractors may misrepresent or erroneously calculate their size, most incorrect reporting results from errors made by government contracting personnel.
The House of Representatives is hoping to close some of the loopholes by making it illegal for publicly traded companies, and any firm with more than 50 percent foreign ownership, to be counted as a small business for the purposes of meeting federal agency contracting goals.
However the federal government could just as easily raise the federal small-business target from 23% to 30% of all federal contracts. Although this might not help considering the fact that the government has not been meeting their small business goals to begin with.
