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The business of government contracts


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The business of government contracts

  1. 1. The business of government contractsWinning a government contract is not easy, but they offer tremendous revenueopportunities that should not be ignored.Despite all the focus on cutting government budgets, including across-the-boardmilitary cuts, Uncle Sam still needs good contractors.Winning a government contract is not easy, but once you learn how to navigate thesystem, a host of opportunities can happen that might not have been on your radar.Wes Fue spent 30 years in federal law enforcement and was a source selection officialfor the Transportation Security Administration underHomeland Security before heretired and began consulting with businesses on how to obtain government contracts.The chance of landing a government contract on your first try is about one in 1,000,and of the hundreds of businesses that Fue has consulted, several have won a firstcontract. But when people ask him if government is right for their small business, hisunequivocal answer is “yes.”“Nobody buys more goods and services than the federal government,” Fue says.“People are told it’s very hard to do business with the government. It’s not hard, but itis cumbersome. There are at least nine different areas where a marine fabrication shopcould enter to do business, and some offer a tremendous revenue opportunity thatshould not be ignored.”The North American Industry Classification System (NAICS) is the standard used byFederal statistical agencies in classifying business establishments’ size, and theirproducts or services code.“On the marine side for fiberglass and composites, the single overriding NAICS code is athree-to-five-billion dollar opportunity,” Fue notes. “If you’re working within the mediumof canvas and composite coverings, there are many areas you can go into—MerchantMarines, Army, Navy, Coast Guard and Customs, which all have boats.”The Department of Defense is the obvious place to look for contracts, but is not alwaysthe best, according to Fue. He notes that there are more than 1,100 other agencies to
  2. 2. contract with; you just need to find out where they are posted and how to marketdirectly to them. This is where his services can be beneficial.WHERE TO STARTThis first step to bid on any government opportunity is to register on the CentralContractor Registration site and the online representations and certificationsapplication (ORCA).“I find it is important for everyone to be CCR registered even if they’re never going tobid on a contract,” notes Teresa Bouchonnet, a business development specialist withthe North Carolina Military Business Center in Franklin, N.C., who specializes ingovernment contracts for the textile industry. Its website ( has anumber of links and helpful data for anyone wanting to enter this market.At the end of the CCR, you will be asked to set up a Dynamic Small Business Profile onthe U.S. Small Business Administration site (small business classification is generallyfewer than 500 employees). This profile includes a capabilities statement with keywordsto describe your products and services. It is an important marketing tool wheregovernment agencies search for companies and prime vendors search forsubcontractors. Foreign companies can also search the site for U.S. partners.“When I’m consulting with businesses, I show them what their competition has postedor where they have failed to post any information,” Bouchonnet says. You can alsoidentify your company’s capabilities by NAICS codes, but most people will search by keywords.Most government bids for more than $25,000 are posted on FedBizOpps which currentlylists more than 16,000 active opportunities, including more than 50 related to marineequipment and fabricated products for such agencies as the Department of the Navyand Homeland Security. Bouchonnet recommends monitoring the site several times aweek.Another site to monitor is the Defense Logistics Agency (DLA) which posts opportunityitems on the DLA Internet Bid Board System (DIBBS). This is a web-based applicationthat provides the capability to search for, view and submit secure quotes on requestsfor quotations (RFQs) for Defense Logistics Agency items of supply. DIBBS also allowsusers to search and view requests for proposals (RFPs), invitations for bid (IFBs),awards, military specs and other procurement information.Government departments produce a procurement forecast each year that is publishedin print and online, searchable through their websites. The forecast provides a heads up
  3. 3. on what each department is seeking to purchase, point of contact, and when the RFPwill be issued. Companies can call for an appointment with the contact person, andsend out a capabilities proposal in advance.Companies can also attend agency-sponsored conferences (in person or by webcast) tolearn what the agency is planning and meet the program contacts. “Businesses havewon contracts based on price, product and quality of goods, but it also helps that thegovernment can put a face to a business,” Bouchonnet says. “Over the last few years,more textile businesses are working with the government in this changing field so thatnew products can be added to their plans.Current events can help inform what is happening with our military operationsworldwide. The recent announcement by the Obama Administration calling for a shift insome focus from the Middle East to Asia and more reliance on the Navy and Air Force,will give some insights into what type of textile products might be needed, Bouchonnetstates.PROS AND CONS ABOUNDSheri Fisher, military sales manager at BondCote Corp. in Pulaski, Va., says thechallenge of working with the government is that it can be really good or really bad.“Contract awards do not happen in a short period of time,” she says. “We’ve seen sometake two years to be awarded. This business is continually changing; specifications,appropriations, regulations are one thing today, but tomorrow may paint a verydifferent picture.”BondCote Corp. supplies coated, laminated and composite fabrics to government andperformance specifications for the military, FEMA and Homeland Security. It isconsidered a first-tier supplier to the prime contractors, but also sells directly togovernment agencies. Most of its contracts, either direct or non-direct, are out of theprocurement agencies for Army, Navy, Air Force and Marines.There are shipping and marine opportunities within the government through manyprocurement offices for FSC (Federal Supply Class) 2040, 2050, 2060 and 2090, forexample, balloon floats, boat covers, various other covers and bags. Fisherrecommends that small businesses tap into their state’s PTAC office. Congress createdthis program to help small businesses move and grow in the government, state andlocal contracts, and it’s free.“All you need to do is set up a meeting,” Fisher says. “A program will be built aroundyour contract interests. The company will receive leads daily based on those interests
  4. 4. for federal, state and local, as well as Canada. They also provide assistance in pastpurchase history of an item.Besides the SBA, FBO and DLA mentioned above, Fisher also suggests registering atNECO (Navy). Once you set up your profiles with NECO and FBO, you will receive dailyleads based on interests. BondCote designed a page on its website to provide quickaccess to the most popular government links.A PHONE CALL AWAYKatie Bradford, owner of Custom Marine Canvas in Noank, Conn., started working withthe Coast Guard in the mid-1980s after getting a call to measure a boat at Governor’sIsland in New York harbor. The captain called 12 other boats for her to measure thatday, which resulted in some immediate orders and others that came two years later.Eventually, 30 percent of her business was coming from government orders. That hasdecreased over time, but Navy and Coast Guard orders from Maine to the Gulf Coastcontinue to be a steady part of her business, which primarily serves the recreationalboating market.Bradford has never registered with the government and didn’t go looking for contracts.At the time, the government was slow to pay through its purchase order system, andmany people didn’t want to work with it. The government started paying with a creditcard, and that hasn’t been an issue for her.“The government streamlined the purchasing business so that they are easier to workwith,” Bradford says. “They can check off on their box that I’m a woman-ownedcompany and that’s important to them. Our location is definitely good for us. We’re fourmiles from General Dynamics Electric Boat (the primary manufacturer of submarines forthe U.S. Navy) and the Coast Guard Academy is located here. We do a fair amount ofwork for the boats that belong to the academy, the submarine base and the Navy subcontractors.”GSA CONTRACTS ARE ANOTHER ROUTEGeneral Services Administration (GSA) contracts can be a great way for companies toexpand sales of products and services. It’s a quicker way for the government topurchase products and services because the GSA contract holder is prequalified andterms are prenegotiated. More and more federal agencies are requiring products andservices to be purchased through a GSA contract instead of through competitive biddingoptions like the FedBizOpps website.
  5. 5. The government procurement process is a challenging field to navigate and might notlead to contracts immediately, but it can lead to long-term business and certainlyincreases visibility of your company among senior military leaders, program managers,procurement staff, prime contractors and bidders. Even if you are not the winner of abid, always ask for a debrief within two days of a contract award. This will help youlearn how to improve your bid next time. If the contract bid award is too low,Bouchonnet says, remember that you are in the business to make money.Reference Link: