Working With Uncle Sam: Washington Building CongressDocument Transcript
Inside Industry Report................................2Pursuing Federal Contracts.............4Social Networking...........................7Construction IndustryBankruptcies...................................10Member Projects............................14New Members................................15WBC Calendar............................. 16The Official Publication of the Washington Building Congress | May/June 2009 Working with Uncle Sam Long Term Benefits of Pursuing Federal Contracts p.4
| May/June 20094Feature ArticlePursuing FederalConstruction ProjectsProvides Long TermBenefits to Contractorsby David Carrithers Companies looking to break in to the federal marketplaceshould make it a long term decision, not just a move toget by during a recession.That’s the opinion of Bill Sweetser, who spent 20 yearsbuilding a business that focused exclusively on public con-struction, while other firms chased more glamorous privatesector work. Sweetser is now retired, but the company hefounded, Centennial Contractors Enterprises, Inc., has grownto become a $250 million-a-year builder that is still busy,despite the recession.“What drives success as a federal contractor is a long termcommitment, experience and capabilities that fit contractrequirements, demonstrated quality of work, reasonable andcooperative behavior, past and present performance of meetingcommitments, a history of few surprises and experience helpingcustomers,” explained Sweetser.Sweetser cites several reasons for his claim about the longterm benefits of federal contracting:The federal government is huge, with well over $100 billion• earmarked for construction projects each year, even before theeconomic stimulus bill was passed;It is a stable market—federal construction does not fluctuate as• dramatically as the commercial market can, particularly duringeconomic downturns;Federal construction offers diverse opportunities for a wide array of• contractors, from huge projects like the Pentagon to small renova-tion and retrofit projects;Federal contracts are regulated by the FAR (Federal Acquisition• Regulation), where requirements are spelled out in great detail;Awards are made based on very strict procedures that are profes-• sionally administered;It is fair—contracting agents look after the best interests of the• federal government and those of the contractors.
The Washington Building Congress | www.wbcnet.org 5Feature Article“If you’ve got a company that has been making a liv-ing in the private sector, you would be well served to putemphasis on federal work,” urged Sweetser. He said thatwhat drives success as a federal contractor are both tangibleand intangible — a long term commitment to being a federalcontractor; experience and capabilities that fit contractrequirements; demonstrated quality of work; reasonable andcooperative behavior; and past and present performance ofmeeting commitments, a history of few surprises, and expe-rience helping customers.Sweetser emphasized that working for the federal govern-ment is not easy, and that there are unique considerations thatfederal contractors have to think about. He also stressed theneed to have talented proposal writers. He also urged peopleinterested in federal contracting to consider adding partnerswho can strengthen their teams. In order for partnerships towork, he said, “the most important thing you want to thinkabout is mutual trust.”Sweetser also encouraged contractors to build relationshipswith contracting officers.To get started, Sweetser offered several immediate suggestions:Talk to government procurement officers to learn about the process• and specific contract opportunities;Go to federal procurement seminars;• Consider teaming with someone working for the federal government;• For subcontractors and suppliers, he suggested going to general• contractors’ Web sites and registering their companies and theirareas of expertise;Find a surety because all federal work has to be bonded.• “If you are going to work for the federal government,”Sweetser said, “this is a good time to start. The stimulus pack-age is going to put pressure on contracting officers to spendmoney quickly.”American Recovery and Reinvestment Act YieldsDirection for Federal WorkThe recently passed American Recovery and Reinvestment Actof 2009 provides a good starting point for companies lookingto begin or ramp up their federal construction efforts. A sig-nificant portion of the plan—about $134 billion—is earmarkedfor construction spending. Additionally, an estimated $8.7 bil-lion will be available to states for school construction by way ofthe American Recovery and Reinvestment Act’s State Stabili-zation Funds. Exactly how and when the money will be spent isoutlined at www.recovery.gov.The largest single category of construction spend-ing—$49.3 billion—is for transportation infrastructure. Ofthat, $27.5 billion will be allocated for highway and bridgeconstruction.One of the Act’s primary goals, according to the WhiteHouse, is to “Revive the renewable energy industry and providethe capital over the next three years to eventually doubledomestic renewable energy capacity.” To that goal, $29.8 billionwill be spent on energy and technology.$29.5 billion will be spent on building infrastructure, acategory of great interest to many commercial contractors. Thefunds are divided among six primary programs:$5.6 billion for GSA (General Services Administration) federal build-1. ings and facilities$7.12 for military construction2. $1 billion for VA (Veterans Affairs) construction3. $8.04 billion for housing facilities4. $7.74 billion for other facilities5. An additional $8.7 billion will be funded through separate aspects6. of the bill for K-12 and higher education school constructionAll of the GSA funds will be distributed for existingproject backlog. The same is true of the military constructionfunds, with the exception of $120 million to be distributedby DOE (Department of Energy) on a discretionary basis forenergy efficiency upgrades$8.04 billion will be spent on new construction of hous-ing facilities and $7.74 billion to fund other facilities, morethan half of which—$4.53 billion—will be used to fundexisting project backlogs. The remaining $3.21 billion infunding will be distributed by agencies on a discretionarybasis, for new or existing projects. This includes $2 billionfrom the Department of Health and Human Services (HHS)for community health centers.“Every day is a good day to work for the federal government,” explains BillSweetser, retired founder of Centennial Contractors Enterprises, Inc.
| May/June 20096Feature ArticleAnother $21.4 billion in funds will be allocated to waterand environmental infrastructure. The funds are dividedamong programs supporting clean water, water resources andenvironmental cleanup. In addition, $4.3 billion in fundswill go toward workforce development and safety. Most ofthat—$4 billion—is for training and employment services.Getting Started in Federal ConstructionGetting starting working for the federal government is not easy.Like anything else in business, you have to build relationships andtrust with the people who could potentially buy your services.Federal procurement officers encourage contractors to con-tact them. First, however, they should take these three steps:Identify your product or service by federal supply classification• code (FSC) or product service code (PSC) on the government’s Website (http://fpdcapp.gsa.gov/pls/fpdsweb/PscWiz)Identify your North American Industry Classification Codes—as• many as apply since this is a primary way government searchengines find contractors (http://www.census.gov/eped/www/naics.html)Determine SBA size standard (there is a separate size standard for• each NAICS) (http://www.sba.gov/services/contractingopportuni-ties/sizestandardstopics/index.html)Most proposed DOD and federal contracting activitiesabove $25,000 in contract value are posted at FEDBIZOPPS(www.fedbizopps.gov). However, not all government contractopportunities are listed on FEDBIZOPPS, and projects under$25,000 are never listed, so procurement officers encouragecontractors to contact each government installation’s facilitymanager to enquire about their projects.Moreover, contractors should start with a narrow fieldof vision. Trying to go after all federal work is an impossibletask for any size business, so contractors are urged to exploreopportunities at one agency—the Naval Facilities EngineeringCommand (NAVFAC) for instance—or even to try to establishrelationships with one venue, like the Bethesda Naval Hospi-tal, where millions of federal dollars are being spent on newconstruction projects.Another very early step for someone interested in federalcontracting is to register on the Central Contractor Registra-tion (www.ccr.gov), a search engine tool for a variety of federalagencies to locate small businesses.The Benefits of TeamingOne effective way to jump start the process is to team withanother contractor who has experience in federal construction.The only way to do this is to make an offer that is a win-winfor both parties, either by providing expertise that is uniqueto the other party or access to markets or contracts that is notavailable to them.A common way of doing this is through a joint ventureor partnership between large contractors with capabilitiesand experience and small businesses that have access togovernment contracts. The government actively encouragesthese partnerships, through programs like their 8(a) businessdevelopment and the Mentor-Protégé program. The detailsof how these programs work are explained at www.sba.gov.The federal government makes it quite clear, however, thatthe joint ventures have to provide benefits to both large andsmall firms, and that each has to contribute their fair shareof the work.Contracting With the Federal GovernmentThere are many ways to participate in federal contracting—asprime contractor, subcontractor, via set-aside programs, in jointventures or other teaming arrangements. Regardless of howyou approach the project, there are essentially two ways thefederal government contracts for services—sealed bidding andcompetitive negotiation.“In a sealed bidding acquisition, the agency must awardto the responsible bidder who submits the lowest responsivebid (price). In contrast, competitive negotiation is a more flex-ible process that enables the agency to conduct discussions,evaluate offers, and award the contract using price and otherfactors,” according to Carl L. Vacketta of DLA Piper USLLP, of Washington.While lowest responsive bids are typically the way contrac-tors with less government experience get federal contracts,competitive negotiation is far more satisfactory.“If you show you have better people and a better processyou can win an RFP without the lowest price,” explainedSweetser. “The federal government believes in that,” he added.“The Federal Acquisition Regulation (FAR) -- codifiedat Title 48 of the Code of Federal Regulations -- containsthe uniform policies and procedures for acquisitions by allfederal agencies. It implements or addresses nearly everyprocurement-related statute or executive policy. In doingso, the FAR reaches every stage of the acquisition process,”added Vacketta.To learn more about federal contracting, visit www.cce-inc.com/whitepapers.html and download “Federal Construction asa Long Term Business Growth Strategy.”David CarrithersDavid Carrithers is vice president, marketingat Centennial Contractors Enterprises, Inc., aconstruction services and solution contrac-tor headquartered in Vienna Virginia.www.CentennialNOW.firstname.lastname@example.org