I’ve faced are marketing and getting my company off the ground,” Metters says. “I watch the successes of other companies similar in size and scope to mine. I use to go after $20-$30 million contracts based on my contacts, but the government was downsizing and companies were consolidating. I didn’t recognize this.”
Metters now teams with 8(a) firms and large companies as a subcontractor and says he carefully chooses large contracts to bid on as a prime because of the expense involved. He also pursues outsourcing opportunities in the wake of government downsizing.
“I should have taken small steps in finding my niche,” Metters says. “I was successful one time, but there were many losses because of going after so many contracts. Now I have references and the experience to back me up.”
As a prime and subcontractor for the Departments of Defense, Army and Air Force, Eleanor Andrews has also expanded her market by partnering with other firms in joint ventures and mentor prot├ęg├ę programs along with sole contracting.
“Successfully bidding on contracts depends on opportunities, your track record, your ability to respond quickly and having the capital resources,” says Andrews, whose company’s 1997 revenues were $14.5 million . “A lot of firms that are in business shouldn’t be. Those who take the time to prepare can be successful.”
As the commissioner of administration for the state of Alaska, Andrews had the needed experience to start her own firm in 1987, having overseen a $250 million budget and more than 1,200 employees. A friend encouraged her to apply to the SBA as an 8(a) contractor. Despite the fact that she had little savings and couldn’t obtain a loan, Andrews qualified and, for a five-month period, reviewed the solicitation of proposals and all logistics for two Alaskan Army bases. To obtain this $20 million contract, Andrews prepared a proposal and spent a month in negotiations with the DOD before proceeding with the project.
“The process is very competitive, but the benefit of set-asides and the 8(a) program is that I bid against other companies my size rather than big firms, which levels the playing field,” Andrews says. “But as a small firm, it’s important to make sure you have enough labor and materials to get the job done when you bid, because if you don’t, you still have to continue to perform, even at a loss.” To ensure prompt
payment (so you can cover payroll and other capital expenditures), Andrews suggests negotiating to receive payment every two weeks or offering discounts. For example, Andrews might offer 1% or 2% off invoices for early payment. The downside is that you lose a little profit, but you save the agency money.
Andrews also advises small or inexperienced firms to lease equipment for short-term projects if they can’t afford to buy and partner with more experienced firms and exchange technology or experience, as she did with her first contract.
HELP WITH THE GAME PLAN
Successful Proposal Strategies for Small Businesses: Winning Government, Private Sector, and International Contracts by Robert S. Frey. (Artech House,