Chapter 4
Collecting Important Market Data
In This Chapter
• Matching your products to government wants
• Finding data on the market for your products
• Finding data on the competition
• Bid Decision Point #1
It’s time to put your research hat on—or make someone else on the proposal team wear the funny hat. This chapter is all about getting information on what the government wants to buy and who else is trying to sell it to them. By collecting good data on the market for your products or services and on what the competition has to offer, you can start to build a solid case for why your organization best fits the government’s needs.
Making Sure You Have What the Government Wants
We use the word “wants” more than the word “needs” in this chapter and book for a reason. Sure, it is all about what the government needs. Governments need all types of products and services. From soup to nuts (literally), governments need radios, airplanes, coffee makers, hand tools, and heavy earthmoving equipment. They need wedding cakes, left-handed framazoids, janitorial services, bomb detection machines, and hand soap. No joke!
def•i•ni•tion
A framazoid is a mythical device, of questionable origin and unknown use. (It’s the only product mentioned here that is fictitious.)
But what should concern you more than their basic needs is what they really want. They don’t need just any old left-handed framazoids. They need framazoids that not only work seven days a week but also bring them the morning paper and shine their shoes.
So your challenge is to match your products to what the government wants. To do that, you first have to know what the government wants. Then see if what you already make fits the bill, or determine if you can make adjustments to existing products to match their wants. Often, your understanding begins with at best a vague idea of that match. Your job is to gain more knowledge about what the government wants to buy and how your specific customer’s wants fit with something you already provide to another customer. Or you need to figure out how you can change what you already make and sell to another customer to bring your product into line with government requirements.
In later chapters, and especially Chapter 5, we guide you through the details of homing in on the wants of a specific customer and building a case for why your organization is the one to satisfy those wants. For now, you are at the 50,000-foot level, simply surveying the market to see what is generally in demand and whether there is a market for your products.
Finding Government Opportunities
At the national level, the website of Federal Business Opportunities (www.FedBizOpps.gov) is the best source for identifying impending government solicitations and reporting the award of contracts all through the procurement cycle. (Note: you may also reach the site by www.fbo.gov.)
The Federal Acquisition Regulation (FAR) now designates the Federal Business Opportunities as the single point of universal electronic public access on the Internet to government-wide federal procurement opportunities that exceed $25,000. The General Services Administration (GSA) operates this website.
On FedBizOpps, government buyers announce their needs, wants, and business opportunities, which means you can filter through this mass of data. Having all this on one site enables you to search, monitor, and retrieve opportunities solicited by the entire federal contracting community. About 95 percent of the total government opportunities are listed on this site. The nature of the remaining government business is not for public access, for various reasons, such as national security.
Its ease of use and strict requirements on the agencies who post the opportunities provides an easy and inexpensive way for all businesses, and especially small businesses, to access government opportunities.
Government buyers (usually the KOs—the government Contracting Officers) upload their opportunities directly onto this website. Under the sponsorship and supervision of the General Services Administration (GSA), it creates synopses of current procurements.
In addition, you can find notices of proposed contract actions, contract solicitations, amendments and modifications, and contract awards. Most importantly for small businesses, you can find opportunities for subcontracting.
Government Insider
Although GSA provides the electronic framework for the Federal Business Opportunities website, the individual agencies that post on it are responsible for their own quality control. So don’t complain to GSA about wrong dates or information. Take your issue to the relevant agency’s KO.
Beltway Buzz
FedBizOpps has a great feature that separates current from old (archived) information. So if you’re interested in only current procurement actions, you can limit your searches to current records only. Other features allow you to focus on small subsets of the data and further limit searches by geography, dates, agency, type of procurement, small business set-aside programs (see Chapter 9), and classification of products.
Not surprisingly, the volume on this site is large and growing. Whatever figures appear here will undoubtedly be incorrect by the time you read this book. So let’s just say there are easily hundreds of entries each day.
This site has public information; nothing is close-hold, classified, or otherwise restricted. There’s no reason for you to avoid just jumping in and using it. We’ll even give you a step-by-step walk-through of the process, so you’ll want to find a quiet place, with a computer and Internet access, and explore away. If not now, when? If not you, who?
Walking Through FedBizOpps.gov
As with any rich website, you can search for information you need or even information you didn’t know you need in so many ways! These four steps will get you started with the basics.
1. Log on and read the guide.
Go to www.fedbizopps.gov or www.fbo.gov. Read the appropriate “User Guide” at the far right of the home page. You will undoubtedly want the “Vendor” Guide, which provides lots of good descriptions of the site’s capability.
Government Insider
Although the User Guide for Vendors shows how to log on to FedBizOpps, you don’t need to have a user account to access many of the features of this site. But if you want to post your company’s capabilities, you’ll need to register in the way described.
2. Search for opportunities.
You can now do a search for opportunities, using various search criteria—whichever ones are relevant to you. The choices are:
• keyword
• opportunity/procurement type
• posting date
• response deadline
• last modified date
• place of performance zip code
• set-aside code (“set aside” solicitations allow only specified business concerns)
• classification code
• NAICS (North American Industry Classification System) code
• agency/office(s)
3. Look at your search results, and decide what refinements you’d like to make.
Here’s an example of results you might get from a relatively simple search. This search was done on NAICS code 236XX, within the Department of Energy. (236XX means any five-digit code beginning with 236. “236” means “Construction of Buildings.” The final two digits describe more specific types of buildings.) Looking for only Active Documents (and no restriction on the age of the document), the search got seven hits. Four were for “Sources Sought” and three were for “Pre-Solicitation.”
You may want to stop now and do a real-time search, using www.fbo.gov and an NAICS code relevant to your own company’s capabilities to see what results you get. It shouldn’t take you long to become at least passably familiar with the way to find opportunities of interest to you and your company.
4. Refine your search to location.
Continue using the example from Step 3. You may already have a better example, one you developed from that step. If so, then you’re off and running, so feel free to continue using your own rather than the example provided here. Try confining your search to a specific place of performance, such as by zip code. The sample search above revealed seven potentials at five different locations around the United States, all of which were for the enhancement of facilities at DoE’s national laboratories. So if your interest were only at Brookhaven National Laboratory, you would have seen two “hits”: one for Sources Sought and the other for pre-solicitation. However, in early 2009, you would have noticed that, although the pre-solicitation is an “active” document, it bears a date of 2005. Without knowing anything more about the opportunity, that’s not exactly a high-priority posting. This construction project appears to be in some sort of limbo.
Beltway Buzz
In addition to information posted on FedBizOpps.gov, there are pay-for-service organizations offering more convenient and focused analysis of current or upcoming procurements. These businesses are listed in Appendix B.
This short excursion through fbo.gov is only a high-level look. Once you get a feel for the site, you can quickly harness the power of it as a source of leads and dig deeper with more complex search strategies.
Learn About Your Competitors Through Your Customers
The best source of data about your competition is your customer. Remember, we use the term “customer” in this book to mean a prospective customer, the government entity that you’re trying to get a contract with. So you might find it odd that you would go to your potential customer to learn about the competitors going after that same customer. Well, here’s how it works.
So long as it’s not in the context of a specific opportunity, you can and should take the time and effort to meet with your customer at his place of business (see Chapter 5) because this is a chance for you to tell him about your company and your capabilities of providing what he wants. But if you use the session wisely, you can have a goal of getting information about your customer’s situation and problems and also getting insight into your competition. You probably already know who the incumbent is and what other companies have expressed an interest in solving the customer’s problems.
def•i•ni•tion
The contractor currently supplying the government with products or services is the incumbent.
Devoting Resources to Your Search
With so much free information online, any business that’s serious about getting government contracts should consider designating someone in-house to regularly cruise the local and national websites of agencies you’ve identified as potentially good marketing targets. Even if carrying this responsibility is only a fraction of an employee’s workload, this person can develop an “institutional memory” within your company. Then that individual could be in charge of engaging one of the fee-for-service providers to take the research to the next level. Even in a relatively small company, such a single-point-of-contact can avoid unnecessary fees caused by over-enthusiastic sales and marketing staff asking for results on inappropriate opportunities.
Red Flag
You may find that using a fee-for-service provider meets your needs. But you must carefully monitor the use of that service. If you don’t control the use, you could be in for an unpleasant surprise, such as unexpectedly large fees caused by, in hindsight, foolish and unnecessary requests.
Your First Bid Decision
Staff work, led by the capture manager, the proposal manager, and the relationship manager, support the bid decision points. Top management (TM) chairs the meetings at those points and makes the decision at the end of the meeting about whether to proceed with the efforts to create a winning proposal or to suspend such activities. Sometimes the decision to continue or to suspend is subject to further developments, such as getting cooperation from a key subcontractor.
The bid decision points described in this book occur at pivotal times in the proposal process. These points are presented at specific times, but the process from identification of opportunity to delivery of the proposal is seldom smooth. Therefore, the decision points may arise at times other than in this nominal schedule. But that’s no problem. Things happen, and you need to have a decision point when you see a major change in circumstances.
The format of the decision point activities is the same, but the data supporting the decisions changes. You can reasonably expect to see clear improvements in the accuracy of the information each time you have a decision point.
Of all the functions of top management, participating in and leading the bid decisions is among a small number of responsibilities—perhaps three—that are truly not only important but also high leverage. An incorrect decision—either way—can be not only costly in dollars (wasting money on bidding the wrong competitions) but also costly in lost opportunities (failing to bid in a competition that you could have won).
Some of the considerations in deciding to bid or not to bid are as follows:
• Have your company’s people had pre-solicitation contact with the customer so as to both give and get the critically important information? If not, that’s a strong “no-bid” signal.
• Is your best information that the customer either wants you to win or at least doesn’t mind if you win? If you have no knowledge of this, that’s a strong “no-bid” signal.
• Where do you stack up with the customer in relation to the competition? If you have reason to believe that you’re no worse than third in the customer’s mind, that’s again a strong “no-bid” signal.
• Do you know what the customer’s view of the “should cost” is? That is, about what cost is the customer expecting to see from the offerors? Can you meet or beat that price and still make a profit? If you either have no clue what the customer expects, or your company can’t meet or beat that number (even if it’s a difficult proposition), then that’s a strong “no-bid” signal.
• If you fail to bid and win this job, how large is the stream of business and length of the contract that you will miss out on? Sometimes, you may feel compelled to put forth a super-duper effort to win this contract, because the non-winners are frozen out of a large amount of business for the life of this specific contract. So if this is the case, it’s a strong “bid” signal.
• Are there clear ways to expand the contract after an award in such a way as to greatly increase the profitability of the contract through Change Orders? So even if you have to bid the initial contract at a very low margin, and even at a loss, are there opportunities to obtain follow-on work, at higher margins, so as to recover from an initial high-risk, low-margin situation, and result in a much better circumstance, in the long run? If so, that’s also a strong “bid” signal.
• Do you have a program manager-designate who is not only well qualified but also has positive name and face recognition with this customer?
• Do you, in combination with any business partners (subcontractors), have the right technical and managerial exposure to the customer?
• Is getting this contract consistent with or at least not in conflict with your strategic plan?
• Is this program real? That is, is it a part of the customer’s budget, or is it just someone’s dream and will never actually result in a contract for anyone? To guard against such a “phantom program,” you should do your best to verify, from budget and planning documents within the funding agency, that there really is funding earmarked for the program you think is real. This is a difficult task, and sometimes you get a false answer, but checking with independent sources, such as other agency documents, is a necessary step in avoiding these programs.
• Can you, in combination with your business partners (subcontractors), offer past performance citations that will be at least as good as those of your competitors? If not, should you look for additional subcontractors to fill the gaps in your own capabilities? Over and above citations required, can those same subcontractors, or other subcontractors, help to fill the gaps between what your company can do well, and the total task?
• What is the “Precipitating Event”? The precipitating event is the reason, or reasons, the customer is conducting this competition at this time, in this way. If you don’t understand the precipitating event, your response is very likely to fail to address the customer’s real concerns. These concerns may or may not be clear from an analysis of the solicitation.
• If this is an existing contract, and there is an incumbent, what information do you find about that contractor’s performance on that existing contract as revealed in the public record of that contract (obtained under the Freedom of Information Act)?
• What are your hard-core discriminators and win themes that show you are not only different from but also better than your competitors in ways that are important to the customer? Note that many of the important considerations are reflected in “Section M, Evaluation Criteria.”
• Do you have the right combination of in-house employees and contracted staff supplementation to create a winning proposal at a reasonable cost?
At this early stage, the TM’s reasonable expectation is that some of these questions will not be answered completely. Perhaps many are not well covered. The good news is that those not well covered then go onto an action item list for work to close the knowledge gap.
The Least You Need to Know
• You must match your products to what the government wants to buy.
• Your search for relevant data should focus not only on narrow products but also broader markets.
• The website www.fbo.gov is a wonderful source of information about past and current government markets; learn to use it effectively.
• Bid Decision Point #1 will help you discover whether your top management (TM) supports going forward with the plan to try to get into this market or not.
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