My Lessons Learned

Interview

How can a new company compete for contracts?

This is a great question and the focus of my new book.  There’s so much free information (and misinformation) out there that it’s easy to get confused. I would start by cruising the federal agencies listed at www.usa.gov. Past performance includes work for organizations that are most similar to the ones you want to win business with. So if your primary clients today are in the retail industry, that may be a stretch to take on a government client. Ask yourself, “What problem do I solve for my client, and who else in government has a problem like that?”.

As well, lots of people don’t realize that subcontracting experience counts! Many people say, “I don’t do any business with the government; my clients are Lockheed and Northrop.” D’oh…look again…who might that end user be? If it’s a government agency then you do have experience! The trick is to know how to document that in a way that is correct and appeals to potential customers.

What should a new company focus on?

First, I’d like to suggest a couple of key web sites for companies considering how and where to focus. Your number one friend is www.usaspending.gov along with www.ffata.org.  These two sites offer past contracting info that lets you see who your buyers and competitors are. You can also export spreadsheet info that includes when current contracts expire. Work backwards from those dates by about 6-18 months to anticipate re-competes or new business. That gets you out ahead of www.fbo.gov, which is the single most dangerous place on the internet for a prospective government contractor getting started.

Which small business set asides take precedence?

I’m here to tell you the set-aside that will always be the winner: The time you as a business owner set aside before you start to pursue government contracts to answer the question, “How would this be good business for my business?”

The top reason that successful companies enter the government market is that winning government business is aligned with their plans to grow their business.  Not: “government has to buy from me” or “the economy is bad, I need a new client.” Those aren’t good enough reasons, and won’t sustain your efforts.

The second rationale of successful market entrants is that there is a strong fit between what the company offers and what the government buyer needs. So the first step to success is Strategy. How does the time and effort it will take to win a government contract fit in with all the other things you’re spending your time and money on to grow your company?

A study commissioned in early 2010, surveying over 1500 companies actively pursuing government business cited that the average small business takes nearly 20 months, and spends an average of $86,124 in cash, time and effort, before they win their first federal contract. So be prepared to work hard.

How do you identify the needs of the government?

That takes us to step two: Focus! The government isn’t a big loading dock, it’s made up of thousands of individual buyers and agencies. I’ll give you a secret: the best clue to your top prospect in government is right in front of you.

Here’s how you find it. Think about your sweet spot customer right now.  You know it’s sweet because the work is your core line of business. The client loved you. They’ve showed that by paying on time, coming back for more, and sending their friends.

Now, think about what government buyer, program, or office has a need most similar to that sweet spot project right now. That is your best prospect today. Because government buyers are notoriously risk averse, they want to know you’ve solved their problem, for someone else like them, yesterday.

Can you give an example of a niche that worked?

One of my clients, Fiber Connections, is a premier provider of cyber security solutions to the problem of intrusion detection at the physical level.  Cyber security is a huge issue for government organizations. Meeting that need is a natural fit and is something government will be spending a lot of money on in the years to come.

How do you beat an incumbent or other competititors?

You need to know and understand step three — Process. How is government already doing business with your competitors? How do they like to buy and are you set up for that?

Then step four– Competition. Who are those competitors, why do buyers like your competitors, and what’s your unique value proposition? How are you different from them, and how do you solve buyer’s problems better?  All of this information starts to form the core of your marketing plan.  The next step is to look at your competitors differently, in step five: Teaming.

How do you find out why buyers like your competitors?

Just ask them! Government contracts keep getting bigger. While successful contractors advise “start small” and “be persistent”. Government buyers will tell you a lot if you get to know them long before an RFP comes out. By the time the RFP hits the street, your opportunity to find out what they want is very limited.

How do you build a relationship with a buyer?

Step six: Relationships – take time and care. Marissa Levin, CEO of Information Experts, tells the story of making two years of calls inside the Office of Management and Budget to unseat an incumbent contractor. When the time came for the proposal, she knew the key themes to emphasize, and what the buyers and stakeholders did and didn’t like about the incumbent. She also knew how she could do better. So she knew it was worth investing over $200,000 and six people working eight weeks on the proposal because she won a $6M multi-year contract.

Who should government contractors get to know?

There are five people you need to meet in government contracting.

1. The Small Business Specialist
2. The Contracting Officer
3. The Program Manager
4. The Influencer
5. the End User