The Government Contracting Market – Where to Start?
3 Step Guide
For companies just starting to look at the government contracting market, it’s tempting to start by targeting an agency you’ve heard about in the news, from a friend or family member or an agency that was a client of yours in the past. And, while its 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, I STRONGLY suggest you ponder the following three questions:
1. Who is buying what I’m selling?
2. Who has money?
3. How are they buying?
It’s fair to say that most agencies use the same or similar items, like utilities, furniture, computers, office supplies, janitorial services, and consulting services, among other items. However, that doesn’t mean that each agency is procuring those items on their own behalf or that they are buying them one year at time. In fact, most federal contracts over 150K are contracted for multiple years. This is why is super important to do your homework and identify who the actual buyers of your services are, meaning at which agency/sub-agency and how often are they buying it.
Who’s got $:
Virtually every agency issues a forecast annually, some even do it monthly or quarterly. Included in the forecast is a list of projects that the agency has identified a need and allocated a piece of the budget to. Most of the time, the congressional budget that funds most agency procurement hasn’t been passed by congress when the agency forecasts come out. Therefore, you cannot simply rely on the forecast as the gospel, things will change from the time the forecast is released in Oct/Nov to when the budget is passed by Congress, lately in the Spring. Bonus, look at the trends over the last 3-5 years to see what the agencies you identified in #1 above as YOUR agencies procured and what time of year.
How are they Buying:
Each agency has hundreds of procurement methods aka ways to purchase the products/services they need. And like every other consumer in the world, government buyers have their preferences, especially in regards to how they buy, since the acquisition process can be laden with excessive compliance measure, paperwork, and bureaucracy. It’s quite normal for government buyers within an agency to use a handful of procurement methods to procure most of their goods or services in the government contracting market.
These procurement methods provide guidance on how the government buyer issues a request for quote or proposal, how they receive responses and how they award a contract. The contract is known as a vehicle and sometimes has multiple winners, most of the time is a 5- year contract.
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. So, as you can see government buyers have a variety of options to procure your products/services. And, if you don’t have access to your target agency’s preferred procurement methods, you are wasting your time courting that agency. There are certainly ways to get around your lack of access to the preferred procurement method of your target agency, like partnering, you can go to BLOG #3 for more information on how to get access.
For companies aspiring to be government contractors there is a lot to learn and it can feel overwhelming at time, even for the seasoned professional. I can promise you that with a little upfront work, you will be a much better position than trying to gather information as you go or hoping someone will steer you in the right direct. Please, please save yourself a lot of aggravation by researching the market upfront and determining Who is Buying, Who has Money and How are they Buying!