Once you realize that your business needs the world’s largest purchaser (U.S. government municipalities) as a customer, the next step is to determine how to become a government contractor. With so any agencies (over 85,000) at the various levels of government (federal, state, and local)—the process of determining where and how to start can be overwhelming. The following is a framework for how to initiate this process:
Step 1: Assess which agencies should have the most need/interest in your product/service.
You need to make some initial determination regarding which government agencies are likely to have the highest level of interest in your product/service. Remember, government agencies are NOT “for-profit” organizations—so the value proposition for government organizations can be different than private industry.
Do some research and make a list of government agencies that are already purchasing a product similar to yours, or ones you believe should be purchasing your product. If you sell a commodity product (i.e., pens, paper, gas, etc.) that you believe most agencies are purchasing, make a list of target agencies based upon a geographic location close of your delivery capabilities and identify the larger government organizations in the region.
This initial list is NOT meant to be a comprehensive list of all government agencies that may purchase your product/service. It is merely a “starting place” to allow you begin the exploratory process of becoming a government contractor. Your list should have a minimum of 3-5 agencies and maximum of 40-50 agencies.
Step 2: Contact target agencies to determine their standard procurement process for your product/service.
Once you have created your target list of government agencies, you need to call the purchasing office/divisions within these organizations, and learn if and how they are purchasing the products/services you sell. This is NOT the time to tell them about your company and why it is so great. The purpose of this contact is to confirm that the agency does purchase your product/service (or definitely needs it), and learning the process of how they are (or would be) purchasing it.
There can a large number of variables in their response. They may make one large purchase each year, or they may make a purchase each week. They may go through a formal RFP process that takes 3-6 months, or they may just ask for three bids and select the lowest bidder in a two-week timeframe. They may utilize a sole source designation or some other criterion to not purchase your product/service through a bid/RFP process—lucky you (more on this in future articles)!!!
Ask a lot of questions and take notes. Get the full contact information of everyone you talk with; if the agency is a true prospect, you will most likely be talking with the same folks again.
Step 3: Understand the type of contact utilized for your product/service.
When you are talking with the agency in Step #2, the agency representative will typically reference the type of contact the agency utilize to purchase the product/service your company sells (if they don’t tell you, ask them). There are a wide variety of government contract types, but the big-three are:
- Firm-Fixed Price (FFP)
- Time & Materials
Make sure you know exactly which type of contract agencies are utilizing to purchase your product/service, and you fully understand the implications of each contact type (I’ll provide additional information on the pro’s & cons of each contract type in future articles).
Step 4: Evaluate the “normal” contracting method for your product/service.
In addition to knowing the “type” of contract, you must also understand the contacting process agencies normally follow to purchase your product/service. Do most agencies utilize a time-intensive RFP process? Do they utilize a faster bid process? Do they typically purchase from an established Federal or State Contract/Schedule (i.e., GSA Schedule)? Are they able to sole-source the purchase because of some proprietary feature? Can they purchase off of a contract already issued by another agency—based upon an inter-local or sharing agreement?
These are just some of the procurement methods government procurement divisions can utilize. You need to know what is the “norm” for your product/service.
Step 5: Obtain any necessary certifications or registrations.
Find-out of if your target agencies require your company to be registered with the specific agency and/or within the state. And determine if your company needs to have any specific certifications or needs to meet any compliance standards to be issued a government contract.
Whatever the agency requires, just do it. This is one of those situations where “it doesn’t pay to fight city hall.” Even if you think the requirements/certifications are unnecessary or overbearing, just get them completed. Complaining or delaying this process just hurts your changes of winning business with the agency in the future.
Step 6: Contact target agencies to make them aware of your company.
Once you have completed Steps 1 thru 5, you can then contact the agencies to make them aware of your company and all of the good things you can do to help them be more successful. Be prepared that the agencies may not be “over-joyed” with your information—but don’t be discouraged. You are building a long-term relationship and it takes time. Be persistent, but nice.
Government agencies want to do business with good companies that delivery reliably. Government purchasing personnel do NOT want to be on the cover of the paper for a “bad” purchasing decision. Remember, they are risk-adverse. Help them understand how dependable and reliable you are.
Step 7: Register for a Bid/RFP system and any other necessary notification system.
Ensure you register your company for the Bid/RFP/Opportunity notification system(s) that is utilized by your target agencies. Today, most agencies post their pending procurements on their website and may also utilize a third-party Bid/RFP system. Make sure you are aware of the appropriate notification system (more on these in future articles).
Step 8: Be ready.
Finally—BE READY. Once you have completed the steps above, your opportunity to win business from a government agency can happen at any time. Based upon “Murphy’s Law,” the opportunity will probably come when you least expect it and/or when you have the least time to dedicate to it—but be ready.
- Be ready to develop a proposal in response to an RFP.
- Be ready to submit a bid.
- Be ready to complete someone else’s contract.
- Be ready with the requisite reporting and accounting processes.
Be ready because government contacts can be BIG dollars and last a long time.