Every year the government issues $500 billion in federal contracts. And of that, $23 billion is allocated for small and disadvantaged businesses. And while that may seem like it is a lot of money and opportunity up for grabs, the process of winning government contracts is one that is challenging and requires a lot of knowledge and attention to detail.
So, where should people start? Great question! This article on the ins and outs of government contracting is a good place to begin. We spoke with Gail Bassette, the executive director of the Minority Business Development Agency (MBDA) Federal Procurement Center which is operated by the Capital Region Minority Supplier under the U.S. Department of Commerce, about bidding for and winning government contracts. Bassette has over 20 years of experience in public and private organizations providing fiscal, operations, procurement, marketing, small business development, and government-related services. And, she proudly severed on the Obama administration’s Interagency Task Force on Federal Contracting Opportunities for Small Businesses and as an adviser to the U.S. Department of Transportation, Office of Civil Rights to develop a national small and disadvantaged business enterprise program.
And when it comes to learning about and positioning your company to win contracts, she says that it is important for small business owners seeking to win government contracts to learn and to familiarize themselves with the rules of government contracting because it is another language and requires a lot of work.
Certify your business
First things first, before small businesses can apply for federal contracts they must be certified and recognized by the Small Business Administration (SBA) along with other requirements that must be adhered to.
“The first requirement is that you must register with federal government supplier database. And that’s called System for Award Management (SAM). Without entry or registration into this database, you will not be able to do work with the federal government. Then you have to obtain your Dun & Bradstreet Number (DUNS Number). Then you will have to determine your business size to qualify for government set aside contracts. Then you need to identify what they call your North American Industry Classification System,” Bassette.
From there, she says that is it critical to develop your own strategic growth plan and learn the federal contracting language.
Learn the language
“There are a lot of acronyms and a lot of rules. But once you familiarize yourself with the government process and you get in then you’re in. If you continue to do good business and build relationships you can really be successful.”
There are also many different contracts. “You have a purchase order, requests for quotation, requests for information, request for proposals, and information for bid. And, all government contracts give specific guidelines and instructions on how to respond to the bid,” says Bassette.
Looking for contracting opportunities can be as simple as going online. “Most federal agencies post on their websites what they call contracting opportunities forecasts. These forecasts are planned federal contracting opportunities that will identify upcoming opportunities per quarter. And, the Federal Business Opportunities site, which is also called FedBizOpps, is a go-to resource for open prime contracting opportunities with the federal government,” says Bassette.
And for those who are looking for sub-contracting opportunities, you can visit SubNet. “The federal government sets aside contracts for competition amongst small and disadvantaged businesses, women’s owners, services disabled, veteran-owned companies and historically under-utilized zones or as they call it HubZones. And they also have government-wide contracts such as GSA Schedule and this is an additional way that the government can buy goods and services,” added Bassette.
Beyond the language and completing the qualifying steps, it is also important to hone in on the relationship and proposal building process before you approach a federal agency.
“One of the best ways to do that is to identify a business networking opportunity or a procurement conference that you may be interested in attending. But before you attend that conference, you need to peruse the agenda to identify the agencies that align with what your business has to offer. Then when you peruse the agenda and identify the person that is slated to attend the event and then you find out about their organization because everything is strategic,” says Bassette.
She also adds the government agencies are really interested to know that you know their business. So you have to do the homework on their mission, know some of the challenges they face, and what they buy.
And with any networking opportunity, Bassette says that following up is critical. “Within 24 hours after the event, you need to send a follow-up email to the people you met. Thank them for the conversation and ask them for a brief meeting that is set up like a telecom because sometimes they are too busy to continue the conversation. This approach will now serve as the beginning stages of establishing a meaningful and sustainable relationship.”
Write A Winning Proposal
For every contract made available, there are guidelines that small business owners have to adhere to when applying as well as a time period for questions and answers where people can communicate with those overseeing the contract.
And once a contract is open for bidding, small business owners have 6 to 8 weeks to prepare their proposal before submitting it. But, this time can vary.
“There are several marketing intelligence lead generation tools and these tools help you identify contracting opportunities. And oftentimes they reach back to three and four years to capture opportunities so that you can plan better. So when these contracts expire you would have already put your team together, done your market research, investigate the environment of that particular agency so that it can position you better to win the contract,” says Bassette.
Some of those tools are provided by the U.S. General Services Administration (GSA) and GovPurchase.
For those who are putting a proposal together for the first time, organizations like the Minority Business Development Agency, Small Business Administration, and other small business development centers will walk through the proposal process with you.
“Ideally, a company should team with a successful government contractor who understands how to put a proposal together. They should team with them on a particular bid and they will see first-hand how to put a proposal together from the technical to the financing side,” says Bassette.
Every proposal has three sections:
- Section C — Includes the scope of services.
- The instructions — You have to abide by the instructions accordingly—all the way down to the margins that you must use on your papers.
- The evaluation — This how the government evaluates certain parts of your proposal.
And when it comes to putting together a strong proposal, here is what Bassette says it should comprise of:
- You must explain how you perform the work and that’s in the scope of services.
- Provide evidence of core competencies. Meaning, what you do best that will help your client reach their desired outcome. And in that, you need to provide an innovative solution, especially at a competitive price.
- Identify your key personnel and list their qualifications.
- Demonstrate excellent past performance. The government prefers to do business with companies that have past performance in doing that kind of work or similar work. And it doesn’t always have to be past performance work in the government. It can be commercial work also.
- Form strategic partners to complement your services because a lot of proposals are huge. And, they require different technical skill sets.
- Scale up. You have to always be looking ahead on how you can provide more services. If the government wants to give you more work, they want to make sure that you can do the work. So, you have to have the ability to scale and be financially sound.
In addition to putting together a strong proposal, it is important for small businesses to gauge opportunities to ensure that they are equipped to manage the contract if awarded one.
“A small business should only respond to federal government opportunities when they have a high probability of winning. It takes a lot of time and resources to respond to these requests for proposals. So you thoroughly have to review the scope of work and solicitation and then form a strategic analysis of their capabilities and resources to determine whether or not they want to make a bid or a no-bid decision,” says Bassette.
A common mistake that business owners often make when bidding for and winning contracts is not having the capabilities to fulfill the obligations of the contract for its entire life cycle. “Contracts are awarded per year. Some people will say that they have a five-year contract, however, the government has the option to award the contract each year based on performance. So if you perform well the first year and the government decides to award an option year then you have to have the resources and capabilities to go to the next year also,” says Bassette.
Form strategic partnerships
Because some contracts are so large, small businesses are encouraged to team up with companies that can help them meet the needs of the contracts. One way around the possible issue of not having enough resources to fulfill a contract is to form strategic partnerships with other companies who do similar work and centers like the MBDA who can help you make connections. As an executive director, Bassette pairs companies with one another so that they can win big contracts. In a six week period, she had to help a company find a partner to team up with for a major contract and together they ended up winning a $27 million contract with the federal government.
With all things considered, Bassette also encourages small business owners to invest in business coaching so that they can have someone help them grow and navigate through different processes. And to small business owners, she offers this advice, “Companies need to learn how to build systems within their organization and be entrepreneurs. Meaning you need to bring business to your company as the CEO. And as you build the system, the company can run on its own. You always have to do a look ahead on what is going on.”
For more information about winning government contracts, be sure to join us at the Entrepreneurs Summit next week in Charlotte from June 6–9 where representatives from the Minority Business Development Agency will be present.