In This Chapter

Close your eyes, and think about your company’s best customer or handful of customers. What do they have in common? Are they long-standing clients who send a steady stream of good business your way? Do they pay on time? Does “net 30 days” really mean 30 days to them, not 60 or 75? Are they rock-solid and stable, with good credit ratings and not likely to go into liquidation before honoring your invoices? Are they open in their communications, sharing news of opportunities to do more business with them?

These typical attributes of a good customer fit just about any type of business and also describe the attributes of the government as a customer. When government entities find reliable contractors, they tend to stay with those contractors for a long time. They’re required by law to pay their bills on time or face strict penalties, and they must share their opportunities publicly, except where limited by national security issues. So doesn’t this sound like a good customer worth going after?

If you’ve picked up this book, you are at least mildly interested in how you can get government contracts. Your company is probably already doing business in the commercial arena (private sector) but hasn’t yet ventured into government contracting. Or maybe you’ve gone after some government (public sector) business but haven’t been successful and want to learn how to get it right the next time. This chapter focuses on the keys to success in getting government contracts.

If you and your organization know you’re going to go after government contracts or if you just want to explore the options, then you probably have one or more of these logical questions:

A first element of success is simply knowing if you should bid on a particular opportunity or solicitation. One way to know this is to assess whether you have products that not only the customer wants but are also different in some way. Ideally, your product(s) should be different from and better than that of your competition. It’s even more ideal if your product has high value to the customer. It does little good to be better than the competition if the product still offers little value to the customer. When you read a solicitation in detail, you’ll be able to see what counts as good in the mind of the customer.

The government has the ability to invest in new technology. The Department of Energy (DoE) national laboratories, for example, have been investing in new technologies for seven decades. The Department of Defense (DOD) is consistently investing in new hardware and software to defend our nation. Lesser known, but also powerful, are other government agencies’ activities that sponsor innovative products. There are contract research and development opportunities for innovative ideas. The government is always interested in products that can help it better do its job. So evaluate if you might have a product that meets a technology need or innovative idea.

In addition, the budgets of all agencies in all governments are always under pressure to do more with less, and the only way they can do that is through increased productivity. So consider whether you have something that can increase the productivity of a government agency.

The bottom line is if you can show that what you’re offering is significantly different from and better than the products they are now buying, you have a very good chance of succeeding in getting a government contract.

If your company is successful in business development in the commercial world, you know what processes work in that arena. Unfortunately, you’ll find that those processes do not necessarily translate directly into the world of government contracting. For example, governments have their own peculiar rules on accounting that have no direct counterpart in the commercial world. Because you must conform to these government rules, for a while you’ll be on a learning curve to get comfortable with the new and different requirements.

Assuming you and your colleagues are adaptable and are willing and able to learn the ropes quickly, you might still wonder if your company is the government contracting type. Well, there is no such thing, so you can relax. Sure, you must meet certain standards. You have to offer a quality product or service at a good price that helps a government entity do something better, faster, smarter, or more cost-effectively. You must be reliable and dependable, getting projects done on time and within budget. But, beyond that, companies doing business with the government come in all shapes and sizes, and that’s not so different from the commercial world.

While you’re deciding whether government contracting makes sense for your organization and if you have any business getting into the game, you might wonder if you have to make a firm decision. You might think you can just toss out a bid and see what happens, like flinging spaghetti on the wall and wondering if it will stick. That’s a perfectly normal, natural thought process, but one that could end up getting you into trouble.

One of the most important lessons to learn from this book is that you should bid only to win. Too often I’ve heard my own clients say, “Well, we won’t win this one, but we’ll establish a name for ourselves with the customer.” Again, this may seem like a perfectly logical way to approach things, but this can be counterproductive. Let’s not even delve into the issue of why you have a negative attitude about your work. Setting that aside, we come to the reality that if you bid and lose, you will have a name with this particular government customer, but, sorry to tell you, that name will be loser! No one wants that.

Winning is difficult enough when you think you can win, so don’t stack the odds against yourself by assuming you’ll lose. Remember, by the end of the process, you and your team will have invested a lot of time and money into this project that, if you lose, you could have used elsewhere, possibly in a more profitable endeavor.

Throughout this book we give you more information to help you make an informed decision, so don’t decide just yet. But if you do end up realizing you have no products that governments can use or that are any different from what they already have, then a no-go decision might be the way to go. And as you learn more about the long, involved process of responding to government solicitations and decide you’re satisfied with the nongovernment work you have, then it’s a further indicator that deciding not to bid may be the best way to go.

If you reach that decision, well, at least you haven’t wasted more money than the price of this book or transportation costs getting to the local library to read it!

Just because today‘s answer or the answer you come to in the near future is “no-go,” this doesn’t mean that’s the right answer forever. Change is the only constant in today’s business and government worlds. So as your company develops new products or perhaps merges into another company with such products or you yourself change jobs or careers, any one of these changes could require a re-evaluation of the situation.

In addition, government requirements or needs evolve over time. For example, few would’ve thought the United States government would ever buy American technical services to go to the former republics of the Soviet Union to assist in, and monitor, the de-commissioning of nuclear weapons! Virtually no one thought that in 1970 or 1980, but in the mid-2000s, that requirement became obvious and necessary.

Another early step to take in your process to ensure success down the road is to understand the three levels of government opportunities and which might be the best fit for your business. This book covers the three major categories of government contracts within the United States: federal, state (50, plus the District of Columbia), and local (all the cities, counties, and regional authorities). However, covering in great detail the many different agencies within those three levels is far beyond the scope of this book.

We focus primarily on United States federal government processes and how to get federal government contracts. So throughout the book, most references to “government” will mean federal government, but you’ll see a number of instances where we offer specific information about state and local (S & L) contracts as well.

When dealing with the different levels of government, remember that they don’t work under all of the same rules. Here are some ways state and local contracting differs from federal contracts:

Before deciding to pursue government contracts, you should know whether such contracts fit into your company’s strategic plan. At this point, you may be saying to yourself, “Say what? I didn’t know I had to have a strategic plan, I just want to know how to get government contracts.” Best business practice says you can’t carry out business without a good plan, and best government contracting practice says you start with a good business plan and then see how contracting fits into it or enhances it.

If you do an Internet search for “strategic planning process,” you’ll get oodles of hits. Though detailed discussions on how to create strategic plans are beyond the scope of this book, if you don’t have one, here’s a suggested high-level outline of a strategic plan courtesy of NetMBA (www.netmba.com/strategy/process) to get you started:

The important thing about any strategic plan is that you must not only create one but also continuously revisit the elements of the plan. Doing annual strategic planning and then allowing it to become shelfware is not the best use of the plan. Consider the plan a living document and have a specific mechanism to keep it current.

Government agencies establish a set of criteria on which they will evaluate how well a response to that agency’s solicitation meets that agency’s requirements or needs. These evaluation criteria (that is, what counts as being “good” in the eyes of the customer) typically contain many evaluation factors, and vary from contract to contract. But the contract is most often awarded to either the company with the lowest offered price (among otherwise-acceptable offers) or the company that is sufficiently better than other companies though its price might be higher. It is important to know where, from a strategic standpoint, you and your company seek to be.

You can think of your company’s positioning as fitting somewhere in a competitive triangle, as shown in the following figure. The place for your company in that triangle depends on the circumstances of that competition. You may want to be toward one corner on Competition A and toward another corner in Competition B depending on what you think the customer’s evaluation criteria are for each competition. However, your company is most likely to pursue a consistent strategy in most of its offers. So whatever else is a part of your strategic plan, you should decide where, in the triangle shown in the following figure, you typically strive to be.

The three pure business strategies are price, differentiation, and focus.

Each corner of the triangle in the figure represents a pure strategy. The upper corner (#1) is clear. Companies in that corner are competing only on price. A handful of companies, some rather large, feature one of their divisions (usually, for support services and at the low end of the technological spectrum) with rock-bottom labor rates and barebones compliance with the solicitation requirements. The company strategy is to price its services at such a low rate that the customer is almost forced to choose that bid over others, even if they judge competing bids superior. In the industry, this is called, “Pass/Fail for other evaluation factors, and award to the lowest price bid.”

Corner #2 at the bottom left is also clear. “Differentiation” means that a company’s strategy is to offer solutions different from those of the competition. An example is to offer a Macintosh platform, when all other offers feature PC platforms. However, to be successful, this difference must also be judged “better” in the eyes of the customer.

The meaning of Corner #3 is perhaps the least obvious. “Focus” describes the case in which a company goes after a market that is so specialized, and in some cases so small, that other potential offerors are simply not attracted to that line of product or service. Most of the time, these markets have relatively high barriers to entry.

A good example of this type of strategy is Dr. Scholl’s foot care products. That market is so small (in relation, for example, to the personal care products sector) that Dr. Scholl’s has enjoyed a dominating role in that market segment. Other than house brands, Dr. Scholl’s has no significant competition.

Few strategies are absolutely pure strategies that would put your company in the extreme corners. However, the danger is that your strategy will be in what we call the “Bermuda Triangle of Losing,” which means stuck in the middle. The center strategies appeal to almost no buyers as the criteria for what counts as good tends to be in one of those corners. By default, your proposition is, “We certainly are another offeror!” and rarely wins the contract.

Despite your own best efforts at acquiring government business, you may reach the point that the logical (if unfortunate) conclusion is that government business is not for your company. So an exit strategy is another important element of a strategic business plan because the lack of a clear exit strategy is a common cause of business failure. Even surviving businesses can look back to a time where the warning signs were clear that exiting was the best, if not only sensible, strategy, but they ignored the signs.

If you see signs that your future efforts are not likely to produce contracts, then your best strategy is to cut your losses and exit the government contracting arena.

Of all the elements of success, this is the most important: the number-one reason for losing competitions for government contracts is the lack of top management involvement in the process. The participation of top management is a key to winning. This might be one person or a small group of people, and it’s typically senior officers in your organization. This involvement makes a difference for many reasons.

The customer can tell if top management is truly involved. For example, has the top management visited the customer’s place of business? The customer typically knows top management by face and name and tends to award government contracts to people with positive name and face recognition. For example, if the highest-ranking person in your company known by the customer is the local program manager, the conclusion drawn by the customer is that no one above the program manager cares about the program. This is probably not true, but why let your customer guess wrong? Make it a point to be present on some occasion to make yourself known to the customer.

Your proposal team knows whether top management cares about this opportunity or not. If top management has given the personal stamp of approval to the team’s leadership and assigned the right priority, staff members know it and will work harder because of that commitment. Who wants to work on a proposal and requirements for a contract if management doesn’t support the company’s winning it?

Business development is too important to be left to the marketers. Good marketing people come to rely on top management and use those individuals to speak to their counterparts in the customer’s organization. We discuss more about proposal team roles and responsibilities in Chapter 5.

Only top managers can build certain relationships. Confidence and a feeling of well-being is just as important in government work as it is in commercial work. Winning depends on the customer having the confidence and good feeling that either the customer wants your company to win or at least doesn’t mind if your company wins.

Financial staying power is the ability to fund marketing and sales efforts and to keep on doing so until you are successful in getting that government contract. As you might imagine, this is an important key to success.

The battlefield for government contracts is littered with companies who came to the arena without the financial backing to stay on the field long enough to be successful. Regardless of how well prepared you are, success comes only after much hard work and the focused effort of many people, all of which you must fund with money. This endeavor is not for companies with shallow pockets.

However, deep pockets are not enough. Just throwing money at the problem will not ensure success. You must have realistic expectations about how quickly your marketing success will translate into revenues and how quickly these contracts will show a positive cash flow. So having the money is not enough; you must have good financial planning, forecasting, and budgeting as well.

In addition to financial staying power, successful contractors have another kind of staying power, which involves waiting and waiting and waiting to see your efforts finally pay off. Patience means doing it with a sense of calm. At one time in my government contracting career, the John Lauderdale Standard Prayer was, “Lord, give me patience, but give it to me now!” Fortunately, I’ve learned to muster up patience without having to demand it now, but I keep the old prayer on hand just in case!

The history of government contracting is replete with examples of successful commercial companies who attempt to enter the government market without patience. A typical and, sadly, often repeated scenario is this: a Silicon Valley company, very successful in the commercial market, believes the government market is its Next Best Thing. So the company takes a successful (usually relatively junior) person from the sales or marketing ranks, who has zero experience in selling to the government, and transplants that seller to the Washington, D.C., area.

The charter is to “go get government business.” The title is “Director of Government Marketing and Sales.” After two weeks, the director’s immediate superior gets on the phone and asks, “Well, you’ve been there two weeks. Where’s your first contract?” This is a disaster in the making, as neither the director nor the immediate boss has a clue that patience is an absolute requirement. It may be months or quarters or more likely years before the first contract comes in and even longer before net earnings appear.

People experienced in the ways of government procurement process (described in detail in Chapter 5) know it is long and complex and not readily understood by the general public. Like the proverbial battleship, the process is difficult to get started and once underway, almost impossible to turn about quickly. It takes a mighty, focused effort to turn the ship. That’s the bad news. The good news is that, once underway, the ship tends to go in the same direction for a very long time. It’s slow to get started but can be a reliable source of revenues and profits, often for years and years.

The Least You Need to Know