Learning the Game: Working the Government Contracting MarketBy Mark R. Smith, Editor-in-Chief
FEBRUARY 1, 2013
Posted in: NEWS
Acquiring it is tedious. That’s really an understatement — especially to someone who’s had an RFP (Request for Proposal) rejected for something as seemingly minor as using the wrong font.
And it’s time-consuming. Frustrating doesn’t begin to describe the process, according to people from different walks of the private sector who have, or who do, live it. But with persistence comes that elusive foot in the door, plus an expansion of one’s business network along with steady work that can prove quite lucrative.
Welcome to the world of government contracting.
“First and foremost, it is a relationship-based market,” said Gloria Larkin, president of TargetGov and the Government Contracting Institute, which are based at bwtech@UMBC. “When many people enter it, they start chasing bids by answering RFPs, but they never win.”
The market, said Larkin, is about meeting the right people and getting to know them. “Without making inroads within the three layers of decision makers,” said Larkin, “it won’t work.”
The companies that want to partake in the federal government’s $500 billion annual contracting spend, yet make only wayward efforts to enter the market, are ignoring the realities of the game, said Larkin, who added that many businesses with misguided approaches have gone out of business.
What it takes, Larkin said, is direction and time. “It takes 12 to 18 months to get where you need to be to start moving forward.”
The first of the three layers of success in the market, said Larkin, is the technical layer. “That’s for the end users or programs managers, who can be difficult to identify. That’s because they are often not easily accessible from the bidder’s perspective, since they often operate from behind the scenes.
The next layer is the acquisition people — the contact who can sign on the dotted line. “‘Contracting officer’ is a typical title,” she said, “but know that these people are not experts at what they’re buying,” which could be anything from computer services to building supplies to toilet paper.
“They’re important, but they don’t want to hear the technical stuff. They’re primarily interested in the potential contractee having the experience needed for the contract in question,” Larkin said. “If they don’t, they’re wasting their time,”
In addition, the contracting officers are interested in a potential contractee’s contract vehicle, such as a GSA schedule. “Each agency has its own range of contract vehicles,” said Larkin. “The government will never sign a vendor-originated contract; they must use the government’s paperwork — that’s their vehicle. If the potential contractee is not properly set up on one, it is very likely that they will not win a contract.”
The third layer concerns the small business representatives. And know that these folks have no authority to buy anything.
“[Potential contractees] can find them a waste of time,” said Larkin, “but they are the advocates that can open doors to small businesses, as well as the large companies who want to subcontract to small businesses.
And that, lo and behold, is the process revealed. “Understanding these three layers is a good way to open the door to doing businesses with the government,” she said.
“Where companies go wrong is that they think they can go straight to the president, the admiral, etc., and make a deal. Not only does that not work in the government, it’s illegal,” Larkin said, pointing out the guidelines specified in the 2,000-page Federal Acquisition Regulations. “You’d be surprised at how many people ignore them.”
Know Your Network
Anthie Zairas, president of Group Z, an 8A [minority] contractor based in Columbia, recently passed “go” and entered the world of federal contracting, garnering a two-year, $3 million deal for national hardware maintenance with the Office of Personnel Management (OPM).
In this case, the process for getting the contract took two years, despite Group Z’s lead coming via an existing relationship. “We’ve been working with the state for 11 years, which is different; but [that familiarity with such processes] still gave us access via a third-party relationship. It helped,” said Zairas.
Filling out the detailed forms was the easier part. “The harder part was the business development aspect, which entailed extensive networking with the government’s people, as well as extensive market research. It’s very involved,” she said with an easy laugh, though still adding that Group Z’s route to paydirt was easier than starting from scratch.
Of course, after winning the contract came the hard part — meeting OPM’s expectations. “But know that it’s easier to go back and secure the contract a second time after all goes well during the first go ’round,” said Zairas, also stressing the importance of knowing one’s certifications and contract vehicles (8A in Group Z’s case), while pointing to the firm’s biggest challenge.
“It was to end up serving as a prime contractor when that’s not necessarily our niche,” Zairas said. “Under the 8A program, we have to do 51% of the work. The rest we subbed out.”
The experience of Dave Garvey, vice president of construction with Stevensville-based R.J. Beasley Electric, another 8A firm, sounds like an extension of Group Z’s. The company has been working in government contracting circles for two-and-one-half years, and Garvey allowed that its contract “almost happened more by default,” specifically after a small project Beasley conducted that has been subbed by a prime, the U.S. Coast Guard Yard in Curtis Bay.
That led to making “good acquaintances” with the local reps (e.g., decision-makers) from the Coast Guard; and even though Beasley came in as a sub, the “mountains of paperwork” still beckoned. “It was just reams and reams,” Garvey said.
But that led to the company being asked to bid on three projects. It won one, which it fulfilled under budget, he said.
Now, Beasley is trying to move toward the next level, which calls for conducting multiple contracts at multiple locations. And that involves new challenges.
“If we get a prime contract, we have to be bonded, and that process was much more time-consuming than we imagined. It took almost three months of daily back-and-forth with the bonding company and its subs, as well as government procurement officers,” said Garvey. “I was more frustrated with the bonding process than the government process.”
Making such a commitment is not without peril for small businesses (which are supposed to garner 23% of the federal contracting budget), which, in Beasley’s case, consists of 10 employees working with numerous subs. In fact, Owner Rob Beasley hired Garvey to handle the contracts, due to the time and manpower constraints.
Then Garvey had to “learn a new language. I’ve been in the construction business for 30 years, but trying to work through the maze of government acronyms and agencies can be overwhelming.”
Tough as the job is, he’s eagerly looking ahead. “I’m optimistic about the reputation we’ve built,” he said, “and how we can build on it.”
Back in the Day
Larry Letow, president and CEO of Convergence Technology Consulting in Glen Burnie, has been working in government contracting circles long enough to know its evolution. And it wasn’t always so tedious, he said.
“Like anything, you have to nurture it,” he said, “and then you have a period of time and you’re tracking it for who knows how long. That’s the difference between [obtaining federal contracts] now and in the ‘old days,’ meaning from the mid-’80s to the mid-’90s. “Back then, it was often a six-month process, maybe a year at most.”
Fast forwarding to today’s market illustrates the contrast.
“Today, there are teams of specialists within companies that chase proposals for about two years,” he said. “The amount of information that the contractors have to collect to make a go, or no go, decision is dramatically more than it used to be. It’s a huge investment of time.”
And that investment comes with risk. “You can afford to lose out on one contract,” Letow said, “but don’t lose several.”
Then there’s life in the winner’s circle.
“With a win comes a period of considerable stability, which is why some companies can grow dramatically,” he said, noting that “70%” of Convergence’s business comes from the federal government. “And once you’re on the schedule, the government pays well and on time.
“So you have to be careful about which contracts you pursue,” Letow said. “But if you do it right, it pays off.”