This post is a guest submission from Rabiah Sutton from FWDthink. The views and opinions expressed in this article are those of the author and do not necessarily reflect the official opinions, policies, or positions of StreetShares or any of its affiliates.
When your company is new to government contracting, it’s hard to know where to begin. It’s tempting to start by targeting an agency you’ve heard about in the news, from a friend or family member, or even a client you’ve done work with in the past.
While it’s important to document which agencies could be possible targets because you have inroads there, it’s usually a mistake to start there or worse create a strategy around those inroads. Instead, ponder the following three questions:
- Who’s buying what I’m selling?
- Who has money?
- How are they buying?
Most government agencies have a need for similar items and services—anything from utilities, furniture, computers, office supplies, janitorial services, and consulting services, among others. That doesn’t mean that each agency is procuring those items on their own behalf or that they’re buying them one year at time.
In fact, most federal contracts over $150,000 are contracted for multiple years. It’s incredibly important to do your homework and identify who the actual buyers of your services are: which agencies/sub-agencies buy your services, and how often are they buying it? How to bid for a government contract
Who has the money?
Virtually every agency issues a forecast annually, and some even forecast on a monthly or quarterly basis. What do I mean when I talk about the forecast?
Simply put, the forecast is a projection of an agency’s upcoming financial wants and needs. The forecast deals with how the agency plans to allocate its funding. Included in that forecast is a list of necessary projects that the agency has an identified need for, and an indication they now intend to fund solutions to fill that need. Seems straightforward, right?
There’s a catch, of course. Most agency procurement is funded by the congressional budget, and often that budget hasn’t been passed by Congress yet when the agency forecasts come out. You can’t simply rely on the forecast as set in stone. Things will change from the time the forecast is released in October or November to when the budget is passed by Congress, which has lately taken until Spring.
To help you figure out where to direct your time and energy, examine buying trends over the last 3-5 years. Pay attention to what the agencies you’ve identified as YOUR target agencies bought, and when.
How are they buying?
Each agency has hundreds of procurement methods—different ways to purchase the products and services they need. Like every other consumer in the world, government buyers have their individual preferences, particularly regarding how they buy.
The acquisition process can be laden with excessive compliance measures, paperwork, and bureaucracy. It’s very normal for government buyers within an agency to use only a handful of procurement methods to purchase most of their goods or services inside the government contracting market.
These procurement methods provide guidance on how the government buyer issues a request for a quote or proposal, how they receive responses, and how they award a contract. The contract, known as a “vehicle”, sometimes has multiple winners. Most of the time, it’s a five-year contract.
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Some contractual vehicles only consider small businesses, while others consider large and small businesses. Some contractual vehicles are issued by one agency for use by all agencies, and some are issued by one agency for use internally. As you can see, government buyers have a variety of options to procure your products/services.
If you don’t have access to your target agency’s preferred procurement methods, you’re wasting your time courting that agency. That being said, there are certainly ways to get around your lack of access to an agency’s preferred procurement method, such as partnering.
There’s a lot to learn for companies aspiring to become government contractors, and it can feel overwhelming at times, even for the seasoned professional. I can promise you that with a little upfront work, you’ll be in a much better position than you would be trying to gather information as you go or hoping someone will steer you in the right direction along the way. Please save yourself a lot of aggravation by researching the market upfront and determining who’s buying, who has money, and how they’re buying before you get started.
FWDthink is an award winning consulting and advisory services firm that specializes in performance improvement and strategic planning for government contractors. For more information about this article contact them here.
This content is for informational purposes only and may not contain all material information about government contracting. This information is not intended to be, nor should it be construed, used, or relied upon, as, financial, tax, legal, or procurement advice.