Get your pen and paper ready as we delve into the steps to get started in government contracting. A few months ago, I had a listener reach out to me and said there was not a step by step guide on how to get started as a government contractor. This episode is a result of that comment. I have been thinking about this topic ever since I received the comment. This topic in itself could be written into a book. However, we can look at the topic on the 1000-foot level.
Step One Market Research
Why? Well, you need to determine if the government purchases your products or services in your area. The Government has moved to larger nationwide procurement contracts. As a result, many of the contracts that were competed in your area may have been bundled or consolidated into these contracting venues. You need to answer the following questions. No, I have not listed every question but a few to get you started. Is there a federal market in my area? Is there a federal market for my niche? Can I be competitive in my niche? Can I compete against the competition? Do I have the past performance that the government is looking for? I think you get the idea now let’s look at the second consideration.
Step 1a – Secondly, you need to determine which specific agency uses your products or services.
Develop a list of agencies that could be potential clients in the future. When first starting out it is advisable to review the list that you developed and only select three agencies to first target. Why three? It is easier to target three agencies that have the most potential to penetrate than to go after all 430 federal agencies. When selecting the agencies try to go after the smaller agencies first. Once you have worked for those three agencies select three more agencies to target next. Besides most experienced contractors will be concentrating on larger agencies. They are chasing the larger procurements. This leaves the door open to you a less experienced government contractor.
Step 1b – Learn the Government Contracting Lingo
In addition, it is earlier to learn the government language and systems with smaller agencies. Next, you need to review each of the three agencies’ websites. Look for a document or page on “How to Do Business with (Agency Name. Don’t just gloss over the website. It is best to spend time understanding that agency’s mission and how they work with small businesses. How can your product or service help this agency with its mission?
Step 1c – Third, research successful government contractors
Perform a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis on the top-performing contractors for the three agencies selected. Don’t skip this step. This is going to help you figure out your competitive edge. Can you save the agency time, money, or resources? These are the things that you will put on your capability statement to help differentiate your business from the competition. The next step is to do a SWOT analysis of your business.
Step 1d- Fourth, perform your own SWOT analysis.
You need to understand how your strengths and opportunities could help you win a government contract. Do you believe you can compete against their companies? If not, what resources do you need to be able to compete? Are these resources readily available? For example, do you need to hire an employee with a government contracting experience? Do you have the working capital to sustain an employee for a minimum of one year? Also, do you have working capital
At the same time, you need to know your weaknesses and threats that could impact your success. Are there ways that you can minimize these weaknesses or turn them into opportunities? Better yet, do you have the skills necessary to bid on a contract? Have you performed on any commercial contracts that are similar to a government contract? Do you personally have any experience in the industry that you are in? Does the business have any experience?
Step 1e – Fifth, you need to make a business decision on whether to pursue government contracts.
If you and your business do not have any past performance your time would be better suited by going after commercial work and building your commercial portfolio. It is better to wait to go into government contracting when you have the resources (working capital, employees, past performance). Now, I am sure that this is rubbing some of you the wrong way. However, I do have your best interest at heart. Government contracting has changed over the last decade. The government is moving to larger procurement vehicles which are resulting in increased competition on fewer contracts. This means that you need to be on your top game and have all your ducks in a row before venturing into government contracting. Remember, the better prepared you are the better your chances.
Step 1f – Sixth, are you prepare to hire experienced government contracting employees?
These employees will become valuable as they will know the local government end users, contracting officers and contracting officers’ technical representatives. Also, they will understand how that agency operates and how to navigate within that agency. The relationships that these employees have will be valuable to you in the long run. Building relationships with government employees is essential. Now let’s move on to Step 2.
Step 1g – Lastly, Research Potential Procurement Opportunities.
Yes, the government has a wish list of procurements that it is planning on purchasing in this fiscal year. Your job is to find out where they publish the listing. NOW, PLEASE NOTE THAT THIS IS A WISH LIST. NOT EVERY OPPORTUNITY WILL TURN INTO A CONTRACT. The government’s needs are longer than the money available to spend. Therefore, the list of procurement opportunities may change as the needs of that agency changes. Generally, the agency will update the listing throughout the year. However, that is not guaranteed.
Step 1h – Finding Opportunities
How do you find those opportunities? Open a search engine and type “2020 federal procurement opportunities (Agency Name)” and hit enter. You want to look for federal procurement forecasts. Generally, these listings will have the following: Fiscal Quarter, estimated price range, a brief description of procurement, contact information, and type of set-aside as a minimum. This allows you the opportunity to market to these agencies. You will want to set up a capability briefing with the Contracting Officer. Hopefully, the contracting officer will agree and bring in other government representatives for you to present your capabilities too.
Step 1i – Building Relationships
This allows you to start building those relationships. Now, it is not advisable to discuss the opportunity that you are tracking. You can discuss in general the information about the opportunity. If they bring up and discuss the opportunity then go ahead and discuss it in detail. Capitalize on the opportunity. Now we can discuss Federal Procurement Forecasts in more detail.
Step 1j – Federal Procurement Forecasts
Yes, the government is lacking at keeping these listings up to date. However, it is best that contractors can do to get a glimpse into the government’s planning process. You can use these listings to develop relationships with the contracting officers and sell your company. You never know what opportunities will happen when you meet with the government. I had a company meet with the government and end up with a sole-source contract because of the meeting. Your job is to sell your business capabilities to everyone that you meet. Come up with an elevator pitch and use it all the time. An elevator pitch is a short (under 25 words) description of your business that will get someone to ask a question. My elevator pitch is “We take the complex world of government contracting and break it down into simple steps that anyone can master”.
Step 2. Registration Time
Now is the time to start registering your business with sam.gov. Remember that there is no cost to complete the registration. Once you are registered you can go to beta.sam.gov to perform searches for those agencies that you researched in step 1. Once you register in SAM you can officially bid on government contracts. Please note that there are companies that say they will complete your SAM registration for you. I, myself, offer those services but you don’t need to pay for them. It is not that difficult.
Step 3. Prepare Your Capability Statement
Your Capability Statement is your marketing brochure for the Government. It is written in Government lingo so that they can understand exactly what you do. This one-page document (front and back) like a resume for your business. Do yourself a favor and save the document as a PDF. Under no circumstances should you use any other format. For a sample please go to https://www.byerlyenterprises.com/federal-products/. I have developed Capability Statements for several businesses. If you wish to have someone create one on your behalf please contact me.
Step 4. Attend Government Contracting Trainings
You will want to attend every workshop, seminar or other training offered by the Government. I would start by contacting your nearest Procurement Technical Assistance Center (PTAC). Your local SBA office should provide training on Government Contracting set-asides. I would attend those as well. Look for open houses on beta.SAM.GOV. Start mingling with the government.
Step 4b -Government Contracting Database
Create a database of contact information. Setup recurring notifications to reach out to these individuals in your database. After you meet with someone, send them an email and thank them for meeting with you. Send them any information that you promised during the initial meeting. As a minimum, I would reach out quarterly. In this email, you want to tell them about any changes going in your company that they could benefit from. Ask them if there is anything that your business could help them with. After all, sometimes the government will ask companies to help write a Statement of Work (SOW). They cannot guarantee that the contract will be awarded to you but if you helped write the SOW then you know exactly what the government is looking for. It gives you a competitive advantage.
Step 5. Network With Government Contracting Representatives
It is important to network with Small Business Specialists (SBS). They are government representatives whose responsibility is to help you market to the agency that they represent. You need to sell yourself to them first, then to the end-users. Attend any open houses offered by an agency that you identified in step 1. Don’t just meet with them once and considered it good. You need to follow up and continue to reach out to them a minimum of once a quarter.
Parting Thoughts On Government Contracting
This article contains a ton of valuable information. Please read it and follow it. As I said earlier, I could write a book on this process. I keep harping on preparation prior to becoming a government contractor for several reasons. However, the main reason is that individuals reach out to me and they have not started their businesses yet but want to become a government contractor. They have not performed any market research and don’t have any experience in the industry that they wish to pursue. Remember that 50% of small businesses will fail by year five.
Fifty Percent of Small Businesses Fail By Year 5.
Failure in business is all too real. I cannot tell you the number of small businesses that fail each year. You need to be prepared. Both you and your business need to have experience. Lastly, you need to be competitive. Set-asides are great for small businesses, but they will not make up for the lack of experience that you may have. Government contracting is not easy. Remember the better prepared you are the better your chances for success. That is why I stress waiting until you and your business are ready to venture into government contracting. You will thank me later.