2009
September
Selling to Uncle Sam
Here's a step-by-step guide to landing the federal government as a customer.
Author: Phillip M. Perry
Related Information
Do your paperwork
Say “federal government” in a crowded room and most people start thinking about taxes. But here’s a sunnier idea: Big Brother can help you increase your small-business revenues by becoming one of your best customers.
“The federal government is the world’s largest purchaser, spending over $400 billion annually,” says Jennifer Schaus, principal of Jennifer Schaus & Associates, a federal procurement consulting firm in Washington, DC (www.JenniferSchaus.com). Federal spending has been going even higher with the $787 billion in economic stimulus money enacted this year.
What does Uncle Sam buy? Just about everything you can think of — over 11 million products and services from office supplies to lumber to consulting services. “Think of the federal government as a big office that needs a little of everything,” Schaus says. Such “offices” (or military facilities, national parks, etc.) may need water treatment or water cooler services.
The sheer size of one of the world’s largest bureaucracies can obscure the fact that small vendors have a decent chance at snagging the bucks.
Kacee Jackson, president of The 360 Company, an Austin, TX-based government marketplace consulting firm (www.360company.biz), says, “While big corporations do get a lot of federal business, 40 percent of all federal dollars is outsourced to small businesses.”
Perhaps it’s no surprise that selling to the federal government means filling out some serious paperwork. (See sidebar: “Do your paperwork")
You’ll also want to get a “GSA Schedule” contract. That’s a pre-negotiated agreement between your organization and the government establishing your products and services for a set fee. This helps you sell by giving government agencies an easy way to purchase directly from you.
“A GSA Schedule is the real means to reaching your government sales goal,” says Schaus. “It simplifies the acquisition process and is the preferred method of procurement for government buyers.”
How do you get a GSA Schedule? Go to: www.GSA.gov, and click on “GSA Schedules,” then scroll down to “Getting on Schedule.”
Your GSA Schedule will be maintained with those of other businesses in a large database maintained by the US General Services Administration (GSA). Procurement managers from many government agencies search this database for goods and services.
Once you have your Schedule, your listings will appear on GSA Advantage, at: www.gsaadvantage.gov . This is an on-line portal where government can purchase direct from you. It looks a lot like eBay.
Obtaining a GSA Schedule contract is not a guarantee of sales. “A GSA Schedule is like a ticket to the dance, but there is no guarantee that someone will dance with you,” says Schaus, one of the many consultants who help companies with the requisite paperwork. “You can sit for months and months without a sale.”
Realize, too, that the government expects you to lower your prices to razor-thin margins. “If you go on a GSA Schedule, the government expects to be treated as your best and largest customer,” says Peter Adler, principal of Seneca Creek Consulting, Washington, DC. “That means you have to give them your best price even if you sell to them in low volume. They negotiate and twist your arm.”
As a new vendor, you’ll be interested in the bids for goods and services listed on the Federal Business Opportunities Web site at: www.fedbizopps.gov. FedBizOpps is “the place to go” for all government bids over $25,000, Jackson says.
Respond — but don’t expect too much. “The government is required to post all opportunities of $25,000 or more on this public Web site,” Schaus says. “However, … a large majority of the requests for proposals (RFPs) at this threshold have been the result of a vendor’s working with a federal agency from six month to two years to have a specific contract written. At best, there may be a few contractors who are able to meet these terms and conditions.”
The people to see
The most successful vendors get to know those at the various agencies who do the actual buying for the government.
“Relationship building is as imperative as the quality of your product or service,” Schaus says. “Successful vendors attend networking events and trade shows. They may also engage lobbyists and agents. Partnering with large prime contractors is also beneficial, especially for the small-business owner.”
Some assertive telephone work can help. “Smiling and dialing from government marketing lists published by commercial companies (most located in Washington) can assist with agency listings of smaller purchases,” says Schaus. “These tend to be based more on price and resemble the mentality of a business-to-consumer smaller-dollar purchase. Your profit margins will be smaller here but it is not an area to ignore. It can be a good starting spot while you hunt for the larger projects.”
Build your own call list by staying on the lookout for names of government buyers and phone numbers. You’ll find these on RQs (requests for proposals) on the FedBizOpps site (www.fedbizopps.gov). Tip: Every federal agency has an “office of small and disadvantaged business utilization.” This is a great place to start.
While selling to the government promises rich rewards, it’s no piece of cake. You must be willing to invest time and effort. And be patient.
“People gravitate to this market for obvious reasons: certain payment, bankable invoices, and contracts with longer legs,” Adler says. “But most are surprised at how difficult and complex it is. It can take a long time to get a sizable government contact; your sense of urgency and the government’s rarely coincide. Maybe you are thinking four months down the road for completing negotiations; they are thinking a year.”
Successful vendors learn how to weather changes in presidential administrations, build relationships with risk-averse clients, adapt to changing budgets and, in general, navigate a big maze.
“Newcomers are not out of the game, but they will have to work hard, build relationships, and realize that many companies have been in the game for a long time and know the who’s, what’s and how’s a lot better,” Schaus says.
Successful vendors avoid spreading themselves too thin. Adler says, ”You need to learn the players and their culture, and focus on what you do well.”
--------------------------------------------------------------------------------
Phillip M. Perry is a freelance writer based in New York City who has been published widely in the fields of business management and law. He maintains a Web site at: www.editorialcalendar.net.
September
Selling to Uncle Sam
Here's a step-by-step guide to landing the federal government as a customer.
Author: Phillip M. Perry
Related Information
Do your paperwork
Say “federal government” in a crowded room and most people start thinking about taxes. But here’s a sunnier idea: Big Brother can help you increase your small-business revenues by becoming one of your best customers.
“The federal government is the world’s largest purchaser, spending over $400 billion annually,” says Jennifer Schaus, principal of Jennifer Schaus & Associates, a federal procurement consulting firm in Washington, DC (www.JenniferSchaus.com). Federal spending has been going even higher with the $787 billion in economic stimulus money enacted this year.
What does Uncle Sam buy? Just about everything you can think of — over 11 million products and services from office supplies to lumber to consulting services. “Think of the federal government as a big office that needs a little of everything,” Schaus says. Such “offices” (or military facilities, national parks, etc.) may need water treatment or water cooler services.
The sheer size of one of the world’s largest bureaucracies can obscure the fact that small vendors have a decent chance at snagging the bucks.
Kacee Jackson, president of The 360 Company, an Austin, TX-based government marketplace consulting firm (www.360company.biz), says, “While big corporations do get a lot of federal business, 40 percent of all federal dollars is outsourced to small businesses.”
Perhaps it’s no surprise that selling to the federal government means filling out some serious paperwork. (See sidebar: “Do your paperwork")
You’ll also want to get a “GSA Schedule” contract. That’s a pre-negotiated agreement between your organization and the government establishing your products and services for a set fee. This helps you sell by giving government agencies an easy way to purchase directly from you.
“A GSA Schedule is the real means to reaching your government sales goal,” says Schaus. “It simplifies the acquisition process and is the preferred method of procurement for government buyers.”
How do you get a GSA Schedule? Go to: www.GSA.gov, and click on “GSA Schedules,” then scroll down to “Getting on Schedule.”
Your GSA Schedule will be maintained with those of other businesses in a large database maintained by the US General Services Administration (GSA). Procurement managers from many government agencies search this database for goods and services.
Once you have your Schedule, your listings will appear on GSA Advantage, at: www.gsaadvantage.gov . This is an on-line portal where government can purchase direct from you. It looks a lot like eBay.
Obtaining a GSA Schedule contract is not a guarantee of sales. “A GSA Schedule is like a ticket to the dance, but there is no guarantee that someone will dance with you,” says Schaus, one of the many consultants who help companies with the requisite paperwork. “You can sit for months and months without a sale.”
Realize, too, that the government expects you to lower your prices to razor-thin margins. “If you go on a GSA Schedule, the government expects to be treated as your best and largest customer,” says Peter Adler, principal of Seneca Creek Consulting, Washington, DC. “That means you have to give them your best price even if you sell to them in low volume. They negotiate and twist your arm.”
As a new vendor, you’ll be interested in the bids for goods and services listed on the Federal Business Opportunities Web site at: www.fedbizopps.gov. FedBizOpps is “the place to go” for all government bids over $25,000, Jackson says.
Respond — but don’t expect too much. “The government is required to post all opportunities of $25,000 or more on this public Web site,” Schaus says. “However, … a large majority of the requests for proposals (RFPs) at this threshold have been the result of a vendor’s working with a federal agency from six month to two years to have a specific contract written. At best, there may be a few contractors who are able to meet these terms and conditions.”
The people to see
The most successful vendors get to know those at the various agencies who do the actual buying for the government.
“Relationship building is as imperative as the quality of your product or service,” Schaus says. “Successful vendors attend networking events and trade shows. They may also engage lobbyists and agents. Partnering with large prime contractors is also beneficial, especially for the small-business owner.”
Some assertive telephone work can help. “Smiling and dialing from government marketing lists published by commercial companies (most located in Washington) can assist with agency listings of smaller purchases,” says Schaus. “These tend to be based more on price and resemble the mentality of a business-to-consumer smaller-dollar purchase. Your profit margins will be smaller here but it is not an area to ignore. It can be a good starting spot while you hunt for the larger projects.”
Build your own call list by staying on the lookout for names of government buyers and phone numbers. You’ll find these on RQs (requests for proposals) on the FedBizOpps site (www.fedbizopps.gov). Tip: Every federal agency has an “office of small and disadvantaged business utilization.” This is a great place to start.
While selling to the government promises rich rewards, it’s no piece of cake. You must be willing to invest time and effort. And be patient.
“People gravitate to this market for obvious reasons: certain payment, bankable invoices, and contracts with longer legs,” Adler says. “But most are surprised at how difficult and complex it is. It can take a long time to get a sizable government contact; your sense of urgency and the government’s rarely coincide. Maybe you are thinking four months down the road for completing negotiations; they are thinking a year.”
Successful vendors learn how to weather changes in presidential administrations, build relationships with risk-averse clients, adapt to changing budgets and, in general, navigate a big maze.
“Newcomers are not out of the game, but they will have to work hard, build relationships, and realize that many companies have been in the game for a long time and know the who’s, what’s and how’s a lot better,” Schaus says.
Successful vendors avoid spreading themselves too thin. Adler says, ”You need to learn the players and their culture, and focus on what you do well.”
--------------------------------------------------------------------------------
Phillip M. Perry is a freelance writer based in New York City who has been published widely in the fields of business management and law. He maintains a Web site at: www.editorialcalendar.net.
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