In a struggling economy, businesses are looking for reliable customers who pay their bills. Companies that in the past steered clear of government contracts today are looking to federal contracts as a lifeline or a solid source of economic growth. The U.S. government distributes a staggering half a trillion dollars each year in contracts to those who know where to look. Opportunities abound, even as economic stimulus dollars dry up. But how can you access this money that you can't afford to ignore?
The contracting process is highly structured with vast volumes of regulations setting forth the who, what, when and how of the federal contracting process. Commercial contracts these are not. But while the process can be daunting, there is plenty of opportunity to market your products or services to the federal government. The time to do so is before the government has initiated a formal request for proposal while agencies are still willing and able to talk, something they can't do once the formal process has begun.
Begin by identifying the agencies that are most likely to be interested in your product or service offering. Understand the agency with whom you want to do business. What is the agency's mission? How is the agency structured? How political is the agency? Learn as much as you can about the agency's specific needs. Many agencies now publish their contracts and those that are not published can be accessed through the Freedom of Information Act. This research will help you to market your services, and it can make a significant difference when the time comes to submit a formal proposal.
Arrange a face-to-face meeting. Even in the structured world of U.S. government contracts, old fashioned networking can work wonders. Show up at conferences. Sometimes it's as simple as taking the "front door" approach – cold call and ask for a meeting. Other times, it helps to hire a government relations firm to help navigate the process. However you find your way in, let the agency know what you can offer and why they should do business with you and your company. Put your company on the radar so the agency will think to call you when an opportunity presents itself.
Just as it is important that government employees with purchasing authority know your company and its capabilities, your representatives on Capitol Hill should understand who you are, what you do, and how you can help the Federal Government meet its needs. In Washington, the most precious commodity -- the one thing most important to any member of Congress -- is jobs back home. And your representatives in Congress need to understand who they represent and where potential jobs lie. A congressional connection is not going to lead to a contract award, but like any other reference, used in appropriate circumstances, it can bolster a potential contractor's credibility with decision makers.
The formal contracting process typically begins with a request for proposals (RFP). The government-run website, www.FedBizOpps.gov, identifies and posts all contract opportunities over $25,000. Agencies also typically post their contracting needs on their individual websites and there are several additional commercial databases that also track government procurement opportunities.
Once a formal request for proposal is issued, how do you maximize chances for success? For almost every contract, you must submit a written proposal. Your written proposal is your chance to communicate to the selection committee that your firm is right for the job. There are three elements that typically enter into a selection: technical ability, price and past performance. Historically, government contractors that submitted the lowest bid had a significant advantage in competing for contract awards, and price still remains an important factor. Today, however, the concept of "best value," which seeks to balance price with performance capability, has become the standard in a significant number of federal procurements.
Pricing strategies remain, nonetheless, very important. Contractors sometimes underbid as a loss leader, in the hope of getting future government work. But underbidding skews the incentive for you to do the best job possible, and this can have negative consequences for contract performance.
On the technical side, you need to convince the government that you're the best qualified firm for the job. Your technical proposal can make or break you. That's the portion of the proposal in which you persuade the agency that you understand the requirements of the job and how you'll meet the agency's needs. This is where many potential contractors fall short. Tailor the technical proposal to the task at hand. Keep it as brief as possible. And think strategically and creatively about how to connect your experience to the agency's needs. Just as importantly, convince the government that you will manage the contract effectively. Beyond persuading the government that you have the ability to perform, bidders give themselves a real advantage if the government believes the contractor will execute and make good on its offer.
If you get the job, make sure you understand how the contract will work. The Federal Acquisition Regulation (the "FAR") sets forth the rules by which the government both acquires goods and services and then interfaces with contractors. The FAR spells out in painstaking detail how government agencies must go about soliciting, negotiating, awarding and administering contracts. And the devil truly lurks in the details. The FAR, for example, gives agencies broad authority to terminate a contract due to their own needs changing, or the failure of a business to deliver on time. With all that purchasing power comes the ability to dictate terms. So seller beware.
If you aren't selected, but you think you should have been, request a de-briefing on the selection. This is an opportunity to learn why the agency chose the winning bidder. And if you are convinced that the government made the wrong decision, then consider a "bid protest." The bid protest process is a standardized litigation regime for government contract disputes. It often does not result in overturning a contract award, but it can, and may reveal that the government made mistakes in executing the procurement process that can result in the need to set aside a contract award and re-compete. Sometimes even the threat of a bid protest can push an agency to the bargaining table. Again, there is tremendous opportunity in government contracts if you can position your firm to compete. Do your research, market your capabilities, write a strong proposal and perform effectively. All of this can add up to a very significant addition to your bottom line.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
