By Michael F. Carmichael
September 17, 2009
The question is: how do you do that?
By law the government is to procure 23 percent of its goods and services from small businesses. It’s often difficult, though, for small business and Uncle Sam to get together. The federal Small Business Administration is actively promoting the relationship - and so are some experienced consultants, such as Judy Bradt, principal and CEO of Summit Insight.
Bradt has more than 20 years’ experience helping 8,000 companies win more than $300 million in U.S. government contracts.
As she sees it, her role is to help her clients do things they could do for themselves - if they had the knowledge, experience, time and money. She “works for companies in all industries, aerospace, defense, vehicles, professional services, construction, engineering, human resources staffing.”
Bradt says that the question many ask is whether the government buys what they’re selling, but what they should be asking is “whether they really want to go through the effort required to win that business. That is a question a lot of companies really don’t think enough about” before getting involved in the bidding process.
There really aren’t barriers to seeking government contracts, Bradt says. “The perception of a barrier is really one of the complexity of the bidding process.” She lists seven steps that she says “every company that wins government contracts has to grapple with. The effort required to develop the business is, not only to understand the procurement process but to realize and plan what’s going to happen to your company as you go through the process of developing that business. What activities do you have to be ready for; what kind of financing, working capital, do you have to have to run after that business - to pursue it, to build relationships - even before you have to submit proposals. If you don’t focus, you go broke.”
Most small businesses don’t understand, says Bradt, that they need to focus on “what they already do really, really well” before they start to approach a government procurement person. “Government is not a monolithic loading dock where they back up to it and dump stuff off and get paid. That’s not how it works.”
“You don’t sell to ‘government’,” Bradt says, “you sell to people. How do you find them? How do you build relationships with them? All those questions are critical.”
Bradt points out that the U. S. Government is the world’s largest buyer of anything. “Understanding who the individual buyers are, and which ones you need to focus on and develop relationships with, takes time, and that’s something smaller companies in particular have to be aware of,” she says. She also notes that the government is also greatly increasing the number of events the Department of Commerce and the Small Business Administration hold because the award target of 23 percent is not being met.
Size matters - as many government contracts are huge. So, in addition to developing relationships with individual government buyers, smaller companies have to develop additional relationships with “teaming companies, subcontractor relationships, in order to get into the supply chain. They have to learn to market not only to the world’s biggest buyer, but to the world’s largest buyer’s vendors.”
“The government procurement process,” Bradt continues, “is not an economic trickle-down program designed primarily for the convenience of assisting small businesses. The government has an obligation to balance socio-economic goals of supporting small business with the fiduciary responsibility of efficient, cost-effective purchasing and that means bigger contracts. So smaller companies have to learn how to play in a very complex environment.”
Bradt has identified seven steps that companies which wish to succeed as government contractors have to follow: “Strategy. Focus. Process - how does government do business in your niche - if you offer printing services you don’t need to know how government does business in the construction sector. Step four is competition - understanding who else is in your niche, how you are different from them, how you are going to set yourself apart from them, how your value proposition is unique.”
“There’s a lot of publicly-available data out there,” Bradt explains, “that most people don’t know how to find or use. But that data can tell you not only about the competition, but about the buyers and where you can find them. Which competitors can you unseat - or, taking you to step five - who can you team with, who do you need to team with?”
The idea of teaming takes Bradt to step six, “Relationships. Not only do you need them with your competitors and teaming partners, there are typically five people you need to meet in government.” She calls them ‘life-forms’. “Each of them can help open doors for you if you know how to work with them well.”
Relationships between small business vendors and government procurement officers are not only encouraged, “They’re vital,” explains Bradt. “Each agency has small business specialists who are responsible for their agency meeting its goals to award contracts to small business, small disadvantaged business, to service-disabled veteran-owned small business, to historically underutilized business - HUBZones - to historically black colleges and universities - HBUs - so they’re reach out to those groups in order to meet their goals.”
As with most things today, there’s a website that Bradt recommends to help find those small business specialists. “Go to www.osdbu.gov, and then drill down to find them in every federal agency’s website,” she says.
Once you’ve found them, then what? Bradt cites a federal regulation about governmental ethics that says taking them out to lunch is “a great idea. But it underscores the importance of knowing the rules - what you can and can’t do. More than a cup of coffee or lunch, they want to know you’ve done your homework. Each agency has on its website a forecast of small business opportunities that’s updated all year ’round.
Nearing the end of the federal fiscal year means that the government spends like there’s no tomorrow. Why? Because,” she laughs, “there is no tomorrow! Money evaporates like Cinderella’s ball gown at Midnight on September 30th. The fourth quarter is use it or lose it. July, August and September is Christmas-time in federal government-land. They’re going shopping.”
“However,” she cautions, “that’s not the time for you to go up to them and say ‘where’s my contract?’ That’s not what you do. What you do have to do is take the next step.”
The seventh step, according to Bradt is marketing. “The decisions you’ve made in the other six steps help you decide how to spend your marketing time and money. Marketing is what you have to do in the months and months before the fourth quarter because the truism still holds - people do business with people they know, and like. So the thousands of pages of federal regulations - which look so daunting to small business owners - actually provide ways for competent contract officers to find a rule that will let them do business with a supplier they want to do business with, perfectly legally. The companies that know the rules are the ones that play those rules like a symphony orchestra. They know the rules aren’t obstacles, they’re tools to victory.”
Bradt recommends a number of little cost or free resources to help small businesses learn more about government contracting. One of these is www.aptac-us.org. It’s the online home of the Association of Procurement Technical Assistance Centers - local governmental, educational or similar organizations that provide knowledge and hands-on experience about selling to the government. They offer courses, perhaps some basic market research, counseling - depending on the organization. The website also has an easy-to-use database of all of the PTACs in a particular state, listed either by state or specifically by ZIP code.
Another resource, tailored to women business owners, is Women Impacting Public Policy, www.wipp.org. It’s a bi-partisan group that essentially lobbies for women’s economic issues before Congress and the Administration. There is a link on their site to an effort, supported by American Express and called “Give Me Five”, to help women-owned business get to the 5 percent of federal governmental contracts mandated by the 2000 Contracting for Women Act, which now stands at slightly more than 3 percent. On the site is a collection of hour-long tele-seminars, one of which is hosted by Bradt, that discuss in detail many of the ins and outs of selling to the government.
Bradt also recommends SCORE, the Service Corps of Retired Executives, which has offices in many major metropolitan areas and is coordinated by the SBA. They, too, offer their years of experience for free to help small business find the most effective ways to successfully bid on government contracts.
As more and more small businesses, particularly in the Midwest, seek to broaden their reach beyond their once-traditional markets, providing the goods or services they’ve become known for to the government can be a good idea if they have the time and financial resources to do so. Building relationships takes a lot of both, Bradt reiterates. But, in the end, it can be well worth it.