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Government Contracting for Small Business - The Essential Elements
by Marsha Lindquist
Some small businesses stay away from Government contracting because they believe they have to have an elaborate infrastructure or extensive knowledge of how the Government does business. Many small businesses (and large ones too) have even submitted bids to the Government only to find out their bid was thrown out as being non-responsive. Most of what any business has to consider are some very basic requirements and then get some help in understanding what may seem like a maze to the novice in Government contracting. Consider these few essentials.
1.Entity. You have to exist as some kind of entity. It is not necessary to form a corporation or partnership; however, you must declare your business as some kind of entity. You may be a sole proprietor or you may take a more formal route to incorporating your business. It is entirely up to you whether you decide to incorporate. Seek professional legal advice on whether this is the right decision for you. You don’t have to do so in order to do business with the Federal Government.
2.Special requirements. There are few. You don’t have to register in order to bid and win Government business. If you compete as a small business, you must be independently owned and operated but not dominant in your field of operation. You must qualify for the size standard specified for each solicitation. These size standards are established under the North American Industry Classification System (NAICS). If you compete as a small disadvantaged business, you will have to certify that the owner is in fact disadvantaged. Likewise, if you compete as a service disabled veteran-owned business you will have to certify to the validity of your claim. But other than being classified as a specific socio economic group, you don’t need any special requirements to do business with the Federal Government.
3.Reputation and references. Just as you would do in a commercial environment, you establish your reputation with various clients and your repeat business is dependent upon that reputation. It is important to gather data about your past clients, get and maintain their contact information, and obtain references that you would want to pass on to anyone new to you who needs to check that information. What we find most times is that our clients do excellent work for someone and then they lose track of where those people are now located. We can’t emphasize enough how important it is to maintain good records of where those excellent references are – today. People move around and having current telephone and email information is vital to anyone who wants to be able to talk with people who have loved your work. Get feedback from people who you’ve worked for and keep those written comments. They don’t have to be formal letters. Feedback comments that have been emailed to you will be helpful. Keep in mind that the people who don’t know you will want to contact those people themselves and ask their own questions. Your reputation is as good as your current and past clients’ comments. Keep their information current.
4.Viable product or service. You really can’t sell fluff to the Government. But if you have a viable product or service that they need and you can provide, it doesn’t take much more than that. You do have to convince them that you will provide it on time, and at a reasonable price.
5.Read the contract. When you bid on a contract you are given the model contract before you even get to submit your proposal. Read it. The entire document. Don’t get enamored with visions of great piles of money rolling in the door before you know what you are signing up for. Even after you win and you don’t know what to expect, read the contract. If you are wondering why the contracting officer is upset with you, read the contract. You probably had to deliver something you forgot. Be sure you know what you are getting into. Read the contract.
6. Paperwork. The bane of our existence. It is necessary to get business and make profits happen. That’s reality. There may seem like a lot of paperwork to do before you even get a contract. It’s not insignificant but it’s not unlike what you would have to read and sign in a commercial contact environment. If the language and the shear volume of it make you dizzy, then ask for some help in weaving through the paperwork requirements. It’s not difficult. It’s just a little time consuming and you have to know what the Federal Government is looking for. Ask.
7.Simple specifications. When you bid on projects with the Federal Government, don’t make it complicated or fancy. Simply respond to the requirements specified in the request for proposal (RFP) or request for quote (RFQ). Elaborate proposals are not necessary, and are frowned upon. But what most companies fail to do adequately is simply respond to the written requirements. While you may have had many conversations with the technical people who really want your company or the contracting officer who knows what you do, no one knows any of it if it isn’t on the paper proposal you submit or the oral presentation you present.
8.Simple accounting. It is not necessary that you buy fancy software or elaborate accounting systems for tens of thousands of dollars in order to do business with the Federal Government. While your competitors may have impressive software packages and staff to run it all, you simply must be able to account for the project costs separately from your other projects. Most companies can already do that with their existing software or perhaps with a little tweaking or add-ons to the systems they already have.
9.Large staff. Another myth that is perpetuated in the marketplace is that you need large staff/infrastructure to support Government business. In fact, you need everybody you have today to run your commercial business. You don’t need to add to your staff unless you already believe you are understaffed doing the level of business that you currently are delivering. You may need some additional help from time to time to bring in the specialized knowledge that supporting a Federal Government contract or several requires. Frankly, you can buy that knowledge in small doses as you need it and save yourself unneeded salaries and overhead related expenses. Buy it when you need it and not before.
What’s important in running through these nine essential elements of contracting with the Federal Government is that you know that you don’t have to do anything new and different to land that Government work. What you would do as a prudent business owner in your normal day to day operations still applies to getting Government business. You may need some help working through the bumps along the way but you don’t need special software, mega infrastructure, and costly requirements to expand your small business.
About the Author
Marsha Lindquist, CEO of The Management Link, Inc., has over 30 years experience as a business expert in Government contracting She has enhanced her clients’ cost competitiveness, improved their contractual positioning, and solidified overall strategies with companies including BP Amoco, DynCorp, and Northrop Grumman. Marsha adds value by telling you what you need to hear. For more information on her, please visit: www.TheManagementLink.com or email her: Marsha@TheManagementLink.com.
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