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Government Contracting: 101

30 Jan 2014

Government Contracting: 101

The world of government contracting is confusing. But also really simple.

I gave a talk recently about government contracting and sales. In my remarks I noted that it’s simultaneously extraordinarily simple and brutally difficult, especially in the environment of the past couple of years.

There are really only three very straightforward principles, and they are ALL necessary conditions.  In order to do make a government sale one must:

1) Identify a government customer with need and desire

2) The customer needs to have money

3) There needs to be a contracting vehicle

At the end of the day, that’s it!  Easy right?  Not so much.  Knowing what needs to be done is the easy part, but getting it done is the tough stuff.  Let’s take a look at all three principles.

I. Finding the government customer. This can be the hardest part of the process.  At a minimum, the government customer has to have a need and a desire to buy what you are offering.  In many instances, it’s just easier to do what they are doing rather than take on what will be an enormous headache for them of engaging in the procurement/grant process.  For you, it means the following:

What you are offering must be compelling. It can’t just be interesting or “fix” something at the margins. It has to be a significant improvement or result in real savings to the government.
What you are offering must fill their need. In DoD parlance, this is frequently called the requirement – what is it that they need that you can do smarter, better and cheaper for them.
What you are doing can’t just be interesting. I see this a lot with academicians who are looking at a really interesting scientific question.  In today’s world, that rarely matters.  What matters is providing the government with solutions to its problems.
Additionally, you will need to map out and engage with the decision maker and influencers. My experience is that 80 percent of the challenge for most businesses, especially small ones, is finding the customer and developing a relationship with them.

All of this assumes that you are not just responding to an RFP (which barely works) but working with the customer to shape what their needs and solutions are (which may result in a RFP.)

 

II. Follow the money.  At the end of the day the customer has to have access to government funds to move forward.  But the money flow starts WAY before that. It actually starts with the Presidents’ budget then goes to Congress who appropriates and authorizes the dollars.  From there the money goes the agency Comptrollers and ultimately to a contracting officer who interfaces with the customer. It’s a long and confusing process with lots of hidden moments where the government finds itself concealing information in the name of the greater good so as not to give one party an advantage over another.

Following the money is all the more complicated by the times that we live in.  Sequestration, continuing resolutions and budget agreements are lexicon of the day.  For good reason, too, in that agency officials are operating in tighter budget environments than they’ve ever lived through and planning for new programs (purchases) has been brutal. All this being said, finding a potential government customer, but one who has no money or authority for budget, is a waste of time.

 

III. Get your contracting vehicle in place. Assuming you have an interested customer with a need and that customer has money, they still have to find a way to get that money to you. That’s where contracting vehicles come into play. They come in all shapes and sizes, including GSA schedules, grants, Indefinite Delivery Indefinite Quantity (IDIQs), Broad Area Announcements, set-asides, sub contracts, and sole source contracts. Whatever the flavor, having a vehicle in place is a necessary condition for the governments spending dollars with you. Most will end up in an RFP or at least a notification of intent to award.  Adding to the confusion is that most agencies have certain contracts they can work with and some they can’t.  Make sure you have your contract tools ready to go. Once you’ve got an answer to the first two principles, the government will frequently want to move fast.

So while it’s complicated, it’s also pretty straightforward. The key is to understand which of the three principles you are working on at any point in time so you maintain the least complex, most straightforward approach. Everything a company does on the government sales will fall into one of these categories. It can be hard to implement but hopefully viewing it through this lens will provide a little clarity.

 

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