Strictly Business       2

Just as the government is divisible into constituent parts, so is the process by which it buys goods and services. In this chapter, we segment the steps as defined in governmentwide regulation and policy and discuss ways business development can make use of these processes. We end with a section on marketing.

The Eight-Step Acquisition Process

Companies that do well in the federal information technology market understand what business they are in: that of satisfying federal requirements. Every federal procurement results from a set of requirements that guide what needs to be bought from the private sector, whether products or services. That’s how the government thinks.

Thriving in this market is a matter of understanding and becoming involved in the acquisition process. See Figure 2-1 for a process template.

Of necessity, our template implies a slightly simplistic, idealized world not always representative of the real one. It suggests that agency vision/need is the clear motivator of the rest of the process—which it is, except that an agency’s vision or need may have been articulated at a very high level three years ago, and now funding is the true driver and sometimes even the main motivator. (“If we don’t spend all of our budget this year, they’ll give us less the next.”) Market research is often cursory. Requirements definition is difficult to do, and plenty of procurements occur without a clear set.

But whether done poorly or done well, or in the exact sequence presented here, this is the expected acquisition process and very often the actual one, too. The first half of the wheel is the purview of the program office—the people with a mission and a budget—and results in a purchase request (called an acquisition package if the procurement is large enough). The contracting shop takes over the procurement starting in step 5 and stays in control through contract award, after which the program office reasserts itself.

1. Agency vision/need: This may be a need requiring action in a matter of days, or it may be a need stated as a desired capability years from now. The nature of the need and how it’s defined sets the scope and pace of the subsequent steps. Procurements should begin with an acquisition plan, and all acquisition plans begin with a statement of need. Always ask whether the need has been defined and who is weighing possible trade-off factors such as whether to lease or buy. Ask if this is the same person who is writing the acquisition plan and who is responsible for the time frame for its finalization.

2. Market research: This is when personnel from the program office or contractors hired for the purpose collect information about what options are available from industry to meet the need. Some of the tools they use are requests for information (RFIs), sources sought notices (SSNs), and pre-solicitation industry days. Always ask if market research has been done. If it has, ask who conducted it, and make sure those people receive your information. Copy others in that agency who have expressed interest in your offerings, but ensure the information you’re sending them is substantive and relevant. Don’t add to the already deafening white noise in the federal IT market.

3. Requirements definition: After the acquisition team has researched the market, it gauges the available options and defines the requirements of the contemplated procurement and how offers will be evaluated. This step is where the real selling occurs. If the requirements haven’t been set, provide information that details why you offer the best value for the situation. This could set the requirements in a way that favors you more than your competitor.

4. Funding: As part of market research and requirements definition, the government typically requests quotes from the private sector so it has an idea how much money it needs to fulfill the need. Program managers keep up a constant stream of funding requests and constantly compile accounting data. Once funds equal to the government’s estimate of the money needed for a particular procurement are in the right account, a person known as the fund certifying official can sign the funding document, and the contracting office can get to work on the procurement, provided the prerequisite work described above has been performed and documented.

5. Solicitation released: The solicitation states the contracting method and type to be used for the contemplated contract action, whether it is an invitation for bid (IFB), a request for proposal (RFP), or a request for quotation (RFQ). At this stage the contracting officer named in the solicitation takes control of the process.

From the government’s perspective, the solicitation is formalization of everything that has been defined in the acquisition plan. Draft solicitations available for comment typically precede issuance of final solicitations in large procurements in an effort to weed out potential problems ahead of time.

6. Source selection: The source selection team must follow the requirements and evaluation criteria set out in the solicitation or risk protest. This is why the requirements and evaluation criteria setting steps that occur in steps 2 and 3 are so important. At this stage, communication between the government and companies occurs under highly controlled circumstances to ensure a level, competitive playing field.

7. Award or order: Contract award occurs when the government declares a winner and signs the cover sheet of the original solicitation. Under the RFP and IFB process, the contractor is legally bound to deliver what was proposed or bid. In the case of an RFQ, the government extends an offer to buy when it issues an order, which most contractors happily accept, although an order recipient does have the right to reject an order within a few days.

If you’re not an awardee, you may have the right to file a protest if you have reason to believe the source selection process was flawed.

8. Postaward: In the implementation phase, performance is tracked and reported in governmental databases. But performance is also the time to be looking for additional opportunities. Shrewd business developers make sure they leverage information gleaned during delivery and implementation to learn about additional needs and new requirements, starting the process of going “around the wheel” for another procurement. For services companies in particular, building a client base requires repeated and ongoing relationship building that shouldn’t stop once the contract is signed. In fact, the first contract is likely just a starting point, a test to see if you can be trusted. In services, there is no victory after which you move on to the next prospect; there is only constant and ongoing engagement.

The Four Dimensions of the Federal IT Market: POET

Topside Consulting, which we mentioned in Chapter 1, devised an acronym to convey the dimensions of the federal IT market: POET. It stands for political, operational, economic, and technical, and companies must learn to navigate all four.

Politics is politics with a small p—this isn’t a reference to lobbying or Congress or political donations. As we’ve already noted, the federal government goes to great lengths to insulate procurement from political machinations. Your party affiliation is irrelevant. Here politics refers to office politics, of which federal agencies can provide fascinating examples.

“One day a client went to Justice and the briefing was going wonderfully, but then they mentioned they’re working with X at Treasury on the same thing, and all of a sudden things went cool,” Topside president Bob Woods told us. It turns out that the two officials at the two departments despised each other.

The best way to understand the network of connections, good and bad, that exist between federal officials is to hire or consult with former civil servants. However, be aware that any former senior fed has friends and enemies, too. As one federal official remarked to us on the experience of being pitched something by a former colleague, “I didn’t like that guy the first time around—what makes them think I’ll listen to him now?”

Operational refers to whether your product, service, or solution will do what it’s supposed to and whether your company will perform as promised. Getting something to properly function in the complex environment of government can be a challenge, and unexpected obstacles can arise. The database necessary for your service might need serious cleaning. Or maybe the program office is convinced you’ve done a bait-and-switch with résumé qualifications. It’s not unheard of for companies and the government to butt heads during this phase.

Economic refers to whether the government has the money to buy what you’re offering. It takes about two years for a single cycle of the federal budget process to complete, and each federal fiscal year has a distinct buying season. Finding the money is a federal problem, not yours, but your understanding of the budget cycle certainly enhances your ability to close a sale.

Technical refers to the technical environment into which you must integrate. Most enterprise-level IT in today’s agencies wasn’t designed with the prospect of replacement in mind. Nor have agencies ever had enough money to re-architect their IT environment into a new, logical ordering; they’ve added and replaced as funding allowed. As a result, agencies have a varied and complex technological setting, the backdrop against which your product or service will be considered. The federal government also has security requirements not necessarily mirrored in the private sector.

Getting Started

When seeking new opportunities, the most obvious starting place is the website where the federal government publishes standalone opportunities worth more than $25,000. Currently, that website is Federal Business Opportunities, a.k.a. FedBizOpps, a.k.a. FBO. The word standalone is significant, since notices for orders under multiple-award indefinite-delivery contracts aren’t posted on FBO.

Of course, if gaining federal business were as easy as visiting a website, there would be no need for this book. Anybody can visit FBO; closing a deal is another matter. Still, those who would dismiss FBO as useless are not quite correct. The truth is more complex.

Yes, an outsider coming in through the front door of FBO will likely find himself trapped in an anteroom. Relationships matter in government contracting, as they do in every market. So does customers’ familiarity with you and your ability to understand government needs and speak agencies’ language. Every company proposal in a full and open competition gets fair consideration, but even a well-written one that betrays a lack of fluency with current government thinking likely won’t get an award—especially if your proposal is the first time they’ve seen your name.

Simply trolling through FBO and submitting responses to the opportunities without getting to know your customers will likely be a costly and mostly unrewarding experience. But that doesn’t mean that FBO isn’t useful. It has enormous utility if you use it as an informational tool. On it are posted presolicitation notices of potential upcoming procurements, often with the explicit request for interested vendors to submit information—and the government does pay attention to the responses. Always respond to requests for information or sources sought notices; it’s an expected part of the process and an important way in which government officials can become familiar with you. We go into further detail on how to use FBO in Chapter 3.

In addition, agencies publish on their websites an annual forecast of expected small business procurements. These forecasts are of variable quality and accuracy. Nobody ever seems to have gone back and quantified at the end of a fiscal year how accurate these forecasts were, but the consensus is that even the good ones should be taken with a grain of salt. Still, they are legitimate conversation starters with agency officials to find out who cares about what.

Even when the forecasts are thorough, they’re still just a snapshot of plans that are prone to change. If you’re interested in a forecast-listed procurement, make a phone call to the contact person listed on the procurement (if such a contact is listed) to get additional information. If there’s no contact listed, start making polite inquiries to find out who the responsible people are. You’ll find yourself picking up the phone a lot to tackle this market anyway.

Another source of agency plans is the budget process, a large amount of which is conducted in public view. Every February, shortly after the White House releases to Congress its budget proposal, the Office of Management and Budget posts on its website a spreadsheet, known as an “Exhibit 53,” meant to contain all the IT efforts agencies will undertake in the coming fiscal year. A related document known as an “Exhibit 300” also contains business justifications for major IT projects, redacted versions of which also make their way online to an OMB-run website known as the IT Dashboard.

The Art of the Approach

In a needs- and requirements- driven environment, those who seek to connect with buyers must embrace their mission and learn their language. This requires a mindset shift for those new to the federal IT market, who tend to waste their first months or years in meetings with agency officials telling them how great their products or services are. Some, after a prolonged period of meeting with many agencies but making no sales, will exit the market, concluding that all federal officials can do is talk.

Actually, it’s they who talk too much, and about the wrong things. One former high-ranking federal executive described the problem: “I’m interested in what you want to do for me, can I afford you, and can I fit you in the operation I’ve got now. If you can convince me, then I’ve got every reason to do so. The problem is a lot of times they’re coming in saying, ‘I’ve made this thing, and it’s wonderful!’

“I don’t want to hear what your compound annual growth rate is. I don’t care anything about maps with dots on them that are all your locations, and I don’t care about org charts or pictures of your president,” the former official added.

Get quickly to the point of what specific use your product or service would be to the agency—what incompletely resolved agency problem it will help fix. When calling on the phone, make sure you can tell feds in the first sentence why they should continue the conversation. Months from now, after you’ve proven that you won’t waste their time, you can ask them how their weekend was.

Feds are wary of companies that view agencies as a spigot to be turned on. They want evidence that companies share their belief that the work they do is important and a demonstration that your company’s offerings can help in the execution of that work—and therefore be worthy of being paid taxpayer money. Taxpayer dollars is a term you’ll hear a lot. In the main, federal employees are conscious about the source of their funding and strive to be good national stewards, despite the impression created by occasional evidence to the contrary.

Get in Sync with the Acquisition Process

What separates the successful from the disappointed in this market is a company’s ability to play a meaningful role early in the acquisition cycle. This means providing the right type of information to educate the acquisition planners about your capabilities while there is still time for them to consider your offerings for an upcoming procurement (steps 1–3 of the acquisition process).

By providing information that could be used to form the basis of solicitation requirements, you’re not doing anything against federal regulations so long as you’re careful to observe the rules governing organizational conflict of interest (OCI), which we address in Chapter 7. The reason feds may be open to crafting the requirements or evaluation criteria a particular way is that they truly want to buy what you’re offering—or because your language is the best articulation of requirements they have struggled to write.

In the private sector, acquisition planning is less formal; there, if an executive with purchasing authority says to buy something, it’s bought. In the public sector, program office officials authorized to spend money can’t do so until they convince a contracting officer with documented evidence that adequate market research has been done and that the vendor selection process is sufficiently competitive. Contracting officers have final authority, and they often send things back for rework unbeknownst to sellers, who are told by would-be customers that “it’s stuck in contracts.”

Assuming you’re careful to avoid OCIs, here’s an example of what you might proffer when the government is engaged in market research:

If you have a requirement that looks like this:	We would offer the following:
Latency time must be less than 50 microseconds	Products X, Y, Z with a 123 cross-connect
Content must not be exposed to the general Internet	Cloud service A, B, C over 456 content delivery network
30 GB of data per hour must be turned into real-time dashboards, updated in real time with no more than a 1-minute lag time from data generation to visualization	See attached bill of materials that would work in Data Center 789

Get the idea? You’re using your knowledge of the customer’s environment and its business objectives to provide market research information that the customer can then use to draft its requirements for the solicitation. This works when selling products or services.

This next bit goes against the instincts of many a salesperson, but in attempting to sell this way to the government, you have no choice but to frankly discuss the capabilities of your competitors and to get the program office to document that they have examined your competition. The government is legally obligated to seek as much competition as possible, and contracting shops increasingly send back out for additional competition solicitations for which they have received only one response.

A contracting shop, when examining the package it receives from the requirements owner, wants to see evidence of alternatives considered. This consideration can happen with or without your input; if you don’t discuss the capabilities of your competition in a reasonably frank manner, then someone else will do so without you. The advantage of your bringing the subject up is that it’s a chance to note the weak points of your competition and contrast them with your strong points. It’s an opportunity to influence the evaluation criteria so that during the source selection phase, areas in which you’re strong correspond to considerations that will be given more weight than others.

A shortcut in federal procurement for products requirements definition is utilizing a brand name or equal solicitation in which the requirements specify your company’s product performance specifications and calls for it, or any competitor’s product that meets the same specifications. Such procurements are permissible, although government policy discourages their use.

To a seller, brand name or equal may seem like a dream come true, since a solicitation with your brand name on it sends a pretty powerful signal. The problem is, it can be too powerful, causing the contracting shop to look more closely at competing offers representing other brands claiming to be equal or better—especially if their price is less.

Especially in procurements of higher value, the better strategy is to turn specific attributes you offer into performance requirements.

Grow from the Inside

Current engagement with the federal government is the best way to understand present and future agency needs. Any firm with workers touching a federal IT system will doubtless see many areas for improvement. If federal workers spend more time than is reasonable navigating a kludged legacy system, if you see a way to automate a heretofore manual or ineffective process in a cost-effective manner that doesn’t disrupt operations or depend on blue-sky thinking, you’ll have willing listeners. Knowledge of problems and the limitations on solutions are easiest gained at close range.

One federal executive recalled a coding project in which “every time we thought it was done, they would come back and say ‘For another $50,000, we could fix this problem.’” Such upselling has to fall on the right side of the dividing line between helpful and annoying to be effective, but if you’re genuinely able to relieve the government of pain, it wants to know so.

At a more general level, those companies with an established connection to a program office and ongoing interaction with it will naturally be more aware of unfulfilled needs and upcoming planned procurements (for which you should try to get ahead of the acquisition cycle, of course).

Relationships remove risk and uncertainty, as one well-established industry executive told us. That also means a good connection made with one set of federal executives at one program office can set you up to be an inside player at the next program office or agency those officials transfer to—and, in so doing, grow your business in a cost-effective manner. This technique can’t be your only growth strategy, but playing follow-the-customer in a federal context is a vital part of growth. Put another way, if you gain a reputation among officials for doing good work at a reasonable price, of course they’re going to want to hire you again.

Consultants and Research Firms

Though you should strive to cultivate your own set of inside agency contacts, doing so is a resource-intensive project, and sometimes you’ll need an outside lift from a consultant or a research firm. Former long-term feds turned consultants, in particular, can guide you through the seemingly impenetrable maze of agency practice. Such consultants are useful even to well-established firms.

Good consultants don’t just run a dating service to help companies meet federal officials. If all a former fed has to offer is the fact of his former employment, turnover within his agency will soon enough render unimportant who he was. Rather, a good consultant stays fluent in his knowledge of issues, policies, personnel, and challenges within government by continuing to meaningfully contribute to the federal IT community. There are plenty of ways to do so: by joining industry associations or advisory boards, attending conferences, and writing papers.

When making introductions for you, a good consultant should be able to place you within the context of the current agenda so that any meeting he arranges isn’t just a setting for introductions, but a discussion of how your company can contribute.

Occasionally, you might find it worthwhile to engage a firm to conduct custom research to answer specific questions about the federal market, such as potential market size, technology adoption trends, perceptions of competitors, identification of drivers, influencers, and major players. Some of these firms are better than others. Some have real insight into the federal market and the needs of each agency, while others are boiler rooms of recent college graduates trolling through FBO.

Be Strategic

It’s easy in the federal IT market to expend a lot of resources chasing potential opportunities, since on the surface everything is open and competitive. It takes restraint to define a focus, segment the market, identify the stakeholders, and work every day to make sure agencies understand the value you can bring to them.

A disciplined strategy works because growing business in the federal market is an incremental affair, based mainly on references and introductions. When you gain the confidence of one federal customer, you gain the potential confidence of those who trust the first customer.

Even those who understand that underlying relations shape the outward appearance of a solicitation sometimes attempt to pursue business where none is likely. It’s rare to unseat an incumbent from a services contract, no matter what rumors you may have heard, or to get an agency to strip out a competitor’s installed base. Plain inertia and momentum guides a lot of what happens in the government; as we discussed in the last chapter, institutional pressures make it easier for the government to continue doing what it already does than to change.

Anyone who wants to displace incumbents or a longstanding supplier has to make an extremely outstanding case. It’s simply not possible to always be better, faster, smarter, and cheaper than all of your competition and still be profitable. Learn to pick your opportunities wisely, based on facts.

Building up to the point after which your company is a known quantity with a base large enough to support a business can easily take at least two years of full-time prospecting and seed planting. The federal IT market is naturally suspicious of companies without a track record; feds wonder whether you’ll still be here later to support your product or be held accountable for the results of your services. It costs nothing for the government to wait for you to prove yourself.

There’s a very high cost to get in, but once you’re in, you too can stay forever if you remain trusted, relevant, and helpful.

Marketing

Although your reputation will certainly spread through the small, even insular, federal IT community by word of mouth, a planned marketing campaign will do much to establish your company in the first place and to broaden agencies’ knowledge of you once you’ve racked up good past performance.

Prepping the message

Preparing a marketing message for government customers frankly isn’t too different from doing so elsewhere. Yet, many businesses behave as if it were. They refuse to learn about customers, to talk their language, and to take into account the unique properties of each market segment. Certainly companies wouldn’t expect in ordinary circumstances to penetrate a new market by swapping the name of one industry for another in their marketing materials, yet somehow many businesses expect they can get away with that when trying to communicate to the government. Glib attempts to graft language from the latest policy mandate onto marketing materials without demonstrating a real comprehension of agency mission and needs can make things worse. Such behavior betrays a lack of willingness to connect with the agency on its terms, which feds readily interpret as a form of attempted exploitation.

In order to do federal marketing right, your messaging should show you understand the public sector mentality and the world federal buyers inhabit. For example, touting return on capital investment isn’t likely to gain you much positive awareness or generate leads. The government isn’t a business; although the government is receptive to messages of promised savings in the context of total life cycle cost, federal agencies’ deepest concern is about mission execution and support. Showing that you understand an agency’s needs and demonstrating your value proposition in support of those needs—your offering’s return on mission investment—should be your core marketing message.

We’ve also stressed that there really is no “federal government market,” just a collection of agencies and departments with different missions, although within those verticals, there do exist horizontals of functionality and governmentwide drivers that agencies share in common. How you’re positioned to sell within the nexus of those two dimensions will affect the phrasing of each of your marketing messages.

Target account profile

Segmenting the federal government in order to find people receptive to your message can be done with something we call a target account profile (TAP).

A TAP is meant to answer three basic questions: where are the places your product or service will be a possible fit; what relevant prior experience or knowledge of the agency’s mission do you have; and which personnel layer of the four we described in Chapter 1 cares most about what you are offering.

Sample TAP
Product and service relevance indicator	Knowledge of agency mission	Personnel layer
My product is compatible with the existing database environment.	We have experience in logistics.	Functional, operator level.
Customer needs real-time analytics of sensor data.	We believe our experience in the global financial sector has relevance in highvolume environments.	Our capabilities are first recognized, understood, and appreciated by chief information security officers.

In seeking to determine the relevance of your offering, you’re looking for matters of basic compatibility. If you sell data analytics software not compatible with Oracle, don’t waste your time marketing to an agency that’s an Oracle shop. If a prospect demands security clearances at a level higher than your personnel possess, move on.

You also need an idea of who is responsible for the issues to which your offering pertains. Remember, it’s better to create awareness of your company and your offering from the bottom up rather than the top down.

Marketing mix

Most marketing to the government, except for corporate marketing emanating from giants that dominate the federal IT market’s upper reaches, is lead generation in one form or another.

Channels of communication used to reach prospects have dramatically changed since the turn of the century, in no small part due to the terrorist attacks of 2001. The old model of direct mail tanked after the anthrax scare, and although the Postal Service today irradiates only mail sent to the White House, Congress, and federal agencies located in the ZIP Codes 20201 to 20597 (i.e., locations within Washington, D.C., itself), direct mail never recovered its preeminence. For why, look to the rise of the online world: an active online presence, including within social media, is now mandatory.

Tightened post 9/11 security has also made industry association events even more important than they were before. Federal building security measures themselves—metal detectors, x-ray machines, bored and surly guards checking to see if you have an appointment—aren’t what’s caused events held elsewhere to rise in value. But the mindset they represent, that of a locked-down building ready to haul up its drawbridge at a moment’s notice, doesn’t encourage networking. One-on-one meetings with feds in their offices are vital, but outside events are a more likely venue for lead generation.

Advertising has a role, too, and there is a competitive group of online, print, and radio outlets dedicated to exclusively covering the federal government. You might also consider special interest outlets in the field of the feds you’re aiming to reach. If you already advertise in those, making the message of interest to feds can be as simple as adding what contract vehicles you possess (such as a GSA schedule) to your ads.

What mix of these channels you choose depends much on your particular circumstance, including budget and personnel constraints, but your approach should be based on your target account profile. A TAP narrows down the universe of possibilities to a small group of likely customers within a particular market segment, and your marketing mix should be informed by their preferences. Develop targeted white papers, case studies, and webinars. Participate on social media sites dedicated to particular groups. Conserve your event participation and sponsorship fees by going to events where you’re surest to interact with your targets, not necessarily to the most popular events.

Your marketing mix will change as your company evolves. But in the beginning, whether you are a new company or a brand-name company introducing a new technology, focus singularly on each domain of federal activity and work to leverage success in one agency across all agencies where that similar situation exists.

Final Note

Sales, business development, and marketing activities are best conducted with the federal acquisition planning, market research, and requirements-writing processes in mind. Remember, classic sales prospecting and qualification occur while government customers are surveying the market, defining their requirements and the basis for selection. All of this happens before the contracts shop takes over.

Identifying key stakeholders in the acquisition process and delivering the right messages at the right time are the primary challenges for industry. You can begin by segmenting the market into actionable targets using frameworks like the TAP, POET, and the four-layer personnel model to construct messages that will catch the attention of the people you need to reach.