Capability Statement – Why you need one

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  First, let’s begin with what a Capability Statement is.  A Capability Statement is a valuable marketing tool for small businesses that want to perform work for the Federal Government.

It is a business document containing your individual and organizational competencies, achievements, associations, and accreditations.  The Capability Statement is the primary tool used by government officials or prime contractors to formulate a first impression about your company.  Everyone knows that you only get one chance to make a great first impression! So, make sure that your Capability Statement stands out from the crowd.

I recently met with two construction companies.  I asked each company to send me a copy of their Capability Statement.  When I got home, I checked my Inbox and low and behold, each business had sent me a copy of their Capability Statement as asked. Great!

The documents in my Inbox were not Capability Statements.

Sure, it contained the capabilities of the firm, but it missed the mark. These documents provided a brief history of the firm, past projects, core competencies and how they excel on projects.  However, the material was over 5 pages in length.  This is not a capability statement.  Remember that a Capability Statement needs to contain the above information but it needs to be in a format that is easily scannable by the reader.

A Capability Statement needs to be relevant to the type of contract and the Agency that you are seeking to market too.  Thus, you may have multiple capability statements depending on the projects, and agencies that you are seeking.  Think of your Capability Statements as living documents that change as your business grows and develops.  You will also have a new Capability Statement for each Joint Venture or teaming opportunity.  Don’t worry, we will walk you through the process of creating a Capability Statement.  Once you have a format that you like you can easily change the document to meet your needs.  So let’s begin, shall we?  

Plan a Head - Capability StatementsPreparation. 

It is vital that you spend time getting to know the Agency that you are marketing too.  Federal Agencies want to help you sell to them.  As a matter of fact, each Agency’s website has a page that tells potential businesses how to do business with them.  Spend time on each Agency’s site and learn what their mission is and how you can enhance their mission.  Think about how your business can help them succeed in meeting their goals and objectives.  As you investigate federal websites, make a note of critical issues that the Agencies are facing.  Is there something that your business does that can streamline a process, produce the result faster or lower costs?  If so, note this as one of your key differentiators to include on your Capability Statement.

Proper preparation is vital to succeed in government contracting.  Have you considered the following?

  • Have you prepared your “Elevator Speech”? (An elevator speech is a concise 20-second description of our expertise.)
  • Is your business registered with System for Award Management (SAM.GOV)?
  • Do you have our DUNS Number, Cage Code, North American Industry Classification Codes (NAICS Codes) readily available? NAICS codes are industry specific and can be found at census.gov.
  • Are financial resources available to sustain the business while waiting for payment from the government? The government can take up to 90 days to pay a contractor.
  • Can employees on staff perform the contract, or will you have to hire them?
  • Are materials, or products immediately available or will you need to ramp up production to meet the government needs?
  • Do you have the facilities and equipment on hand to perform the contract?
  • What is your bonding capacity? (Required for construction businesses)
  • Have you taken free government contracting courses at U.S. Small Business Administration?

Length.

A Capability Statement should not exceed two pages in length.  If absolutely necessary you can stretch it to a maximum of 3 pages.  However, if prepared correctly there is no reason to go beyond the 2 pages.  Design the document to be scanned quickly to obtain the relevant information.  Remember the goal of the Capability Statement is to get the attention of government officials.  Hopefully, this will lead to the government officials asking you to perform a Capability Briefing and eventually performing a contract.

Content.

The content listed needs to be relevant to the person viewing it.  I have found it best to use bullet points (summarize the information).   Lastly, your capability statement needs to be easily searchable.  It is imperative that the document is saved as a PDF and not a PowerPoint, Word document, or Publisher file.  As a former Business Opportunity Specialist (BOS) for the government, I have seen businesses use every type of data imageable.  Whatever you do name the document please label it a Capability Statement. This is very important.  Please do yourself a favor and save the document as a PDF.  Everyone has access to PDFs.  Not everyone has access to other programs.  Besides, you don’t want anyone to be able to easily edit the document.

It is best to call the document a capability statement and place this heading at the top of the paper. This term is known throughout government contracting. This lets government officials and prime contractors know that you are familiar with the federal process. Remember that a Capability Statement needs to have short bullet points and not long paragraphs.  These bullet points need to be keyword heavy. This allows for quick visual scanning.

Essential content includes all government codes (DUNS, Cage Code, NAICS Codes) and brief references to relevant past performance.  A Point of Contact (POC), email address and phone number for each past performance.

Don’t be surprised if a Contracting Official reaches out to companies listed as past performance to an inquiry about your capabilities.

Capability Statement Headings

To assist you in designing your capability statement I have included vital headings for you:

  • Company Snapshot
    • Facilities or offices locations
    • The geographical area that you serve
    • DUNS Number
    • Cage Code
    • Point of Contact
    • E-Mail address
    • Phone Number
    • Fax Number
    • Bonding (if applicable)
    • Website address
  • Certifications
    • 8(a) Certification
    • HUBZone Certification
    • SDVOB
    • WOSB
    • Small Business
  • Core Capabilities
  • Key Differentiators
  • Past Performance
    • Contract No
    • Brief Description
    • POC
    • POC Contact Information
  • Include pictures of your work on your Capability Statement.
  • Include customer kudos and positive quotes regarding engagement experience or add case studies to add dimensions to your capability statement.
  • Contracting Vehicles – GSA Schedules, Basic Ordering Agreements (BOAs), etc.

It is of the utmost importance to set yourself apart from your competition.  The best way to do this is to state how you are different from your competitors. I have reviewed hundreds of Capability Statements, and the number one mistake companies have committed is that they forget to list differentiators.

Don’t have any federal contracting experience.  No worries!  Just enter relevant past performance from your commercial projects instead.  Once you receive a few federal contracts, you can slowly replace the commercial projects with government projects.  The key word here is relevant past performance for your Capability Statement.

Design

Design - Capability statement  I have found that there are not any hard and fast rules when designing your capability statement.  It needs to look pleasing to the eye with plenty of white space.  I cannot stress enough the importance of white space on the document.  No one is going to read a Capability Statement that is full of text.  Feel free to let your creative juices run wild here.

This brings up one last thought.  You want to use quality, coated, thick paper when printing your Capability Statement.  Paper of this type will enhance the images and layout of the design.

Branding.

Your Capability Statement should match your brand. Remember your branding is essential to your business.  It needs to be reflected in your logo, company website, letterhead and marketing materials.    The most important thing to remember about your brand is to be consistent.  Using color on your Capability Statement helps add visual appearance to your document.  It is best to use the same colors as your logos, letterheads and company website.

Business cards.

Business cards can be used as a mini capability statement. You should have business cards specific to the federal marketplace. Be sure to include your DUNS number, Cage Code, and NAICS codes as a minimum.  Sometimes your capability statement will be misplaced, but generally, contracting officers will hang on to business cards.  I have had more than one contracting officer tell me that they lost a business’s capability statement, but they remembered the company’s name and searched for their business card.
Benefits - Capability Statements

Capability Statement Benefits.

Capability Statements can be used for more than marketing to new federal agencies.  Below are some examples:

  • Opens doors to begin relationship-building process
  • Obtain meetings with decision-makers
  • Can be used as a tool during conferences
  • Inform decision makers
  • Stand out from the crowd.
  • Market to Prime Contractors
  • Serve as an electronic summary
  • Sets you apart from your competitors
  • Represents you in your absence
  • Mitigates risk
    • Proves you know and understand the market
    • The government does not like risk.
  • Often requested as part of a Sources Sought or RFI response.

Conclusion.

On average, you have 5 seconds to capture the government official attention, or your Capability Statement it is going to the bottom of the stack!  Your Capability Statement needs to tell a story without using lots of words.  It needs to be clean and polished, and it needs to represent what your business does with pictures, bullet points, and differentiators. Therefore, a Capability Statement is one of the most important marketing tools that a company can have. By following the steps above you can create a powerful Capability Statement that will open doors for your business.

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