Federal agencies spend about $60 billion a year on interagency and enterprisewide contracts, but there is limited evidence that they are being effectively used and managed, according to a new report from the Government Accountability Office.
Agencies use multiple-award schedule contracts, multiagency contracts, governmentwide acquisition contracts and enterprisewide contracts to buy a wide range of goods and services. The bill for such contracts was estimated at $60 billion in fiscal 2008, but the total was unknown because the total number of contract was unknown, GAO said in the report dated May 24.
“The total number of multiple-award contracts and enterprisewide contracts currently in use by agencies is unknown because the federal government’s official procurement database, [the] Federal Procurement Data System-Next Generation, is not sufficiently reliable for identifying these contracts,” the GAO report stated. “This has been a longstanding problem.”
Furthermore, there is limited data to show the effectiveness of these types of contracting, GAO added. And without greater coordination and oversight, it is unclear whether the interagency and enterprisewide contracts are effective in leveraging buying power, and the proliferation of such contracts suggests there may be fewer efficiencies and less cost savings than expected in their use, GAO added.
There are concerns about duplication, lack of information, pricing and management. “Data are lacking and there is limited governmentwide policy to effectively leverage, manage, and oversee these contracts,” the GAO wrote.
Duplication of products and services offered on multiple acquisition vehicles has created uncertainty about best pricing. For example, with the General Services Administration’s multiple-award schedule program, there are tools and controls to obtain best prices, but it is not clear whether those tools are achieving that goal, GAO continued.
“A lack of data, decentralized management, and limitations in assessment tools create challenges for GSA in managing the multiple-award-schedule program,” the report said.
GAO makes recommendations to the Office of Management and Budget to strengthen policy, improve data and better coordinate agencies’ awards of multiple-award contracts and enterprisewide contracts. It also recommended to GSA to improve pricing and management of the multiple-award schedule program. Both agencies agreed with the recommendations.
– Published May 25, 2010 – About the Author: Alice Lipowicz is a staff writer for Federal Computer Week.
GAO denied a protest by Perot Systems Government Services, Inc. (Perot) finding that the contracting officer properly rejected Perot’s proposal that contained labor rates not yet approved by the General Services Administration (GSA) [
Perot Systems Government Services, Inc., B-402138, Jan. 21, 2010]. Rejecting several arguments from Perot as to why the rates in its proposal were fair and reasonable, GAO held: “vendors under FSS purchases must quote schedule prices that are published and that have been determined to be fair and reasonable by GSA.” GAO noted that the only exception to this rule was for additional discounts offered from approved GSA prices.
The Procurement
GSA sought bids from contractors holding Federal Supply Schedule (FSS) Schedule 70 contracts for certain professional services. At the time it submitted its proposal, Perot was in the process of negotiating a five-year extension of its Schedule 70 contract. Perot had proposed new labor rates for the five-year extension, but those rates had not yet been approved by the GSA contracting officer. In its proposal, Perot use its proposed, but unapproved labor rates. The contracting officer excluded Perot’s proposal from consideration because the labor rates included in the proposal did not match Perot’s current Schedule 70 contract labor rates.
Approved GSA Prices Are A “Cap” On Prices
Perot raised several arguments as to why its new, but unapproved, rates were fair and reasonable. First, Perot argued that the RFQ required that a contractor’s approved rates be “derived from” its GSA Schedule rates, and its proposed rates were, in fact, “derived from” its GSA Schedule rates. Second, Perot argued that even though a few of its proposed rates had increased slightly, the majority of its rates were lower. Finally, Perot argued that its rates were fair and reasonable because its overall price was lower than the awardee’s price. GAO rejected each of these arguments. Relying on FAR 8.404(d), GAO found that even if the lower rates proposed by Perot could be considered a discount from its current rates, the categories for which higher rates were proposed were improper. Thus, the contracting officer correctly eliminated Perot’s proposal as unacceptable.
Lesson Learned
Approved GSA schedule rates are a ceiling when bidding on task orders issued under FSS contracts. Contractors should take care to make sure that prices offered are approved GSA Schedule prices or lower. Not only may proposing prices higher than those approved by GSA result in rejection of a bid, it also could result in allegations of overcharging in the event of a later audit by the GSA Inspector General. Thus, GSA contractors should make sure that federal sales personnel and any authorized dealers permitted to sell under the contractor’s GSA contract are adequately trained in this subject.
- May 10, 2010 by Sheila Armstrong - K&L Gates LLP – This blog/Web site is made available by the contributing lawyers or law firm publisher solely for educational purposes to provide general information about general legal principles and not to provide specific legal advice applicable to any particular circumstance. By using this blog/Web site, you understand that there is no attorney client relationship intended or formed between you and the blog/Web site publisher or any contributing lawyer. The blog/Web site should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.
The General Services Administration is calling on the federal government to eliminate its environmental impact through green technology and smarter acquisition decisions, agency officials said on Wednesday.
“GSA has to embrace a zero environmental footprint goal. We should set our sights on eliminating the impact of the federal government on our natural environment,” said GSA Administrator Martha Johnson during a speech on Wednesday evening. “This is our moon shot.”
In an earlier conference call with reporters, Johnson said a zero footprint is a big strategic idea that hasn’t yet been translated into specific programs. But, she added, the agency aims to build leadership around sustainability, develop across-the-board training and awareness and attract young professionals who relate to the mission.
“The first thing you start quibbling about is, ‘What does it mean, how do we know it, where do we start measuring, how will we get the biggest bang for the buck?’ ” she said. “We want to have those kinds of conversations.”
When it comes to green technology, government needs to look at the whole IT life cycle to identify energy-saving solutions, Johnson said. For example, data center consolidation, smart building technology, virtual workplaces and reduced computing power all offer ways to build sustainability.
“It also invites the issue of employee culture. We can put in all kinds of dials and switches, but there is behavior that comes along with it, and we need to engage everyone in that conversation,” she added.
GSA also is working to shore up its workforce, said Steve Kempf, acting commissioner of the Federal Acquisition Service. The agency must fill its vacant full-time positions to improve service to its customers and to relieve the burden on staff, he added. Specific initiatives include recruitment of mid-level career employees, an FAS internship program and opportunities to rotate through positions to build management and information technology skills.
The agency’s fiscal 2011 budget request includes $25 million for acquisition workforce initiatives, including improved training, a more careful accounting of workforce strengths and gaps, and a stronger community-building program for sharing best practices.
“This is a way for GSA to have its own moon shot,” said Johnson. “We’re both positioned and poised and ready and eager to play a more aggressive role in this.”
- By Emily Long – 05/05/10 – © 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED
Business people frequently ask Counselors with the Georgia Tech Procurement Assistance Center (GTPAC) how they can figure out whether it’s worth their while to go after a GSA Schedule. Here are a few pointers to guide your decision-making.
First of all, it’s important to understand what a GSA Schedule is … and is not.
A GSA Schedule is a contract awarded by a federal agency, the General Services Administration, to firms with established track-records of selling products or services. A Schedule contract is long-term (a base term of 5 years, with renewal options to a maximum of 20 years). Schedule contracts cover a wide array of products and services. Contract awards are based on “most favored customer pricing.” While issued by the GSA, a Schedule contract can be used by any federal agency and, in some cases, by units of state and local governments. Since everything is pre-negotiated, government agencies benefit from using Schedule contracts because acquisition lead-times are shorter, administrative costs are lower, and administrative steps are fewer.
From a business point-of-view it’s very important to remember that a Schedule contract is not an order. In other words, once you are awarded a Schedule contract, you must be prepared to actively market yourself to government buyers. For this reason, it’s not uncommon for a Schedule contract to be referred to as “a license to hunt.”
Your initial step in pursuing one of these contracts should be to examine the entire list of 39 Schedules, including nine Schedules administered by the Veterans Administration. You can search for details inside particular Schedules by conducting a key word search at http://www.gsaelibrary.gsa.gov/ElibMain/scheduleList.do. Look for the Schedule that most closely fits your line of business. Subcategories within each Schedule are called SINs — Special Item Numbers. Remember, there is not a Schedule for everything. You eventually may conclude that there is not a Schedule that’s a good fit for your business.
If and when you find a relevant Schedule, GTPAC recommends you look at spending reports on individual Schedules at http://ssq.gsa.gov. This will give you some ideas about what kind of money is being spent on individual Schedules and who the prominent, winning Schedule contractors are.
You should do further market research on your potential competitors. Use the GSA eLibrary at http://www.gsaelibrary.gsa.gov to identify existing Schedule contractors, their contract terms and conditions, their product and service offerings, and their pricing. Remember, too, that today’s competitors may be tomorrow’s business partners; GSA Schedule contractors are allowed to team-up with one another to execute government contracts.
Once you’re ready to proceed, use the link in the GSA eLibrary for the Schedule you’ve identified to go to FedBizOpps — the central repository of virtually all government bid and proposal solicitation documents — so you can download the Schedule solicitation. Look for the link in the eLibrary that reads: “Click here to view the current solicitation on FedBizOpps.” An alternate way to find a solicitation is by using the links from this page: www.gsa.gov/schedulesolicitations.
The solicitation will consist of several different documents, so be sure to download them all. Collectively, we’re talking about hundreds of pages here, so the real work now begins – you must read, and re-read, everything. Only you can make a serious and accurate assessment of the impact of GSA’s terms and conditions on your business. Particularly pay attention to the instructions in the solicitation — you will need to follow these “to the letter” to ensure that GSA accepts your proposal.
Note, too, that many Schedules solicitations allow you to submit your proposal in an electronic format rather than on paper. These Schedules are designated as “eOffers.”
Does all this sound too daunting for you at this point? Take heart! After all, there are lots of ways to do business with the government, not just through a Schedule contract. In fact, GSA itself contracts extensively with vendors outside of the Schedule process. You can take a look at a forecast of GSA’s acquisition needs at www.gsa.gov/smbusforecast. This forecast can help you plan your approach. And don’t neglect to consider possible subcontracting opportunities with GSA contractors; you can find the major ones listed at www.gsa.gov/subdirectory. Your GTPAC Procurement Counselor can help you find many other government contracting opportunities at the federal, state and local levels.
Oh, and one more thing. If you do decide to to pursue a GSA Schedule contract, be sure to register for and attend GTPAC’s class entitled “Understanding the GSA Schedule Process.” Just click on the TRAINING tab on our website to identify the dates and locations of this class.
© 2010 Georgia Tech Procurement Assistance Center – All Rights Reserved.
The General Services Administration has spent $4 billion in Recovery Act funds to convert federal facilities into higher performing, green buildings, the agency announced on Wednesday.
“GSA’s aggressive Recovery Act obligations put people back to work across the country and leverage our buying power to invest in green jobs, energy-efficient technologies, and both traditional construction and emerging green markets,” agency Administrator Martha Johnson said. “By creating a greener, higher performing federal buildings portfolio, GSA’s Recovery Act investments will save taxpayer dollars in energy efficiencies and build a more sustainable economy.”
As of last week, the agency had awarded stimulus construction contracts to more than 500 firms for 391 projects. The projects are in all 50 states, two U.S. territories and the District of Columbia.
Following a trend seen elsewhere with federal construction spending, GSA said many competitive bids came in lower than originally anticipated, allowing officials to reinvest an additional $173 million into green projects.
“By delivering on time and under budget on these green retrofit projects, we’re not only making more cost-saving building improvements than anticipated, but creating new opportunities for more than 500 companies nationwide,” Vice President Joe Biden said.
GSA’s federal buildings fund received more than $5.5 billion through the American Recovery and Reinvestment Act. Of that, about $4.5 billion was made available to convert federal buildings into high-performance green buildings.
According to data available on the Federal Procurement Data System-Next Generation Web site, GSA awarded the majority of its buildings contracts competitively and using a firm fixed-price structure. It is not clear from the data, however, how many of the awards GSA tacked on to existing construction contracts. More than $567 million — or 14 percent — of GSA’s Public Buildings Service stimulus contracts went to small businesses, the data shows.
GSA said some construction projects were under way before the stimulus and that Recovery Act funding was used for additional phases of the work. “Other contracts were awards against previously competed IDIQ construction or professional services contract, while other awards were made by competing new contracts,” the agency said in a statement.
High-performance green buildings generally use less energy, water and resources than typical federal facilities. The agency’s Recovery Act plan states that green buildings also will improve indoor environmental quality, worker productivity and recycling opportunities while cutting air and water pollution.
GSA anticipates that its new construction and major buildings modernizations will achieve LEED silver certification from the U.S. Green Building Council for use of sustainable design and technology. Silver is the third highest of four certification levels available, after platinum and gold.
GSA received an additional $750 million in stimulus funds to renovate and construct federal buildings and courthouses. Those renovations need not be green. Another $300 million is devoted to upgrading land ports of entry.
Some of the agency’s ongoing Recovery projects include the construction of a new energy-efficient courthouse in Austin, Texas; the installation of a solar roof on the Veterans Affairs building in downtown Philadelphia and the conversion of a former World War II munitions plant in St. Louis into a high-performance green building.
GSA is required to obligate at least $5 billion by Sept. 30, the agency said.
- by Robert Brodsky – GovExec.com – April 7, 2010
A new skirmish is emerging in an ugly, ongoing dispute between small business advocates and the federal government over its past — and perhaps continuing — practice of awarding small business contracts to Fortune 500 companies.
The American Small Business League in a lawsuit is accusing the General Services Administration of destroying information in a database that could help advocates trace the violations, and the league has asked a federal court in Northern California to force the government to restore the data, which spans 10 years, and to make the information public. A federal judge is set to decide on the request for a preliminary injunction by the end of April.
For years, the Petaluma, Calif.-based organization, which represents 100,000 businesses seeking federal contracts, has tried to hold the government accountable for federal regulations that require 23 percent of its contracts to be set aside for small businesses. The government has never met that goal, small business advocates say. Instead, many contracts have been awarded to companies such as Falls Church-based General Dynamics, Xerox and General Electric, advocates say, withholding billions of dollars annually from small businesses.
“I believe $10 billion a month in federal contracts that by law should be going to small businesses are actually going to Fortune 500 firms and to some of the biggest companies around the world,” said Lloyd Chapman, president of the ASBL.
“It’s devastating to small businesses,” Chapman said, adding that he’s talked with several that have closed because they couldn’t get contracts.
A spokeswoman for the GSA said her agency could not comment on the lawsuit.
At issue is whether large businesses deliberately defrauded the government and should be punished, as the advocates argue. The Small Business Administration denied that the contracts went to large companies intentionally. A spokesman said the awards resulted from a number of problems: companies mistakenly applying for contracts because they were unaware of the complex guidelines of what constitutes a small business; data entry errors; and agencies failing to update records after large companies, including General Dynamics, bought small businesses that earlier had received contracts.
“In nearly all the cases, it’s a data integrity issue, not awarding the contract falsely,” said SBA spokesman Jonathan Swain. “The integrity of this data is a top priority” for SBA Administrator Karen Mills.
The dispute centers on the government’s move last month to drop a field from its database that captured companies that identified themselves as small businesses. Advocates say they used that field to determine whether large companies had illegally misidentified themselves as small businesses to get the contracts. Companies that falsely represent themselves are subject to fines of up to $500,000 or a prison term of up to 10 years, though the government has rarely if ever imposed the penalties, advocates say.
A study issued by the SBA’s inspector general in February said 11 of 36 contracts it sampled were awarded to businesses reported “as small, but the contract file reflected that they were other than small.”
“We really don’t know how much business we’re looking at” that was lost, said Fred Valerino Sr., director and founder of Pevco, a 70-employee Baltimore company that sells pneumatic tubes, similar to the devices used in drive-through bank windows, that allow government hospitals to send items from one end of their building to another.
Valerino said government audits show that his competitor, a Swiss multinational corporation, received 147 sole-source contracts from the government that were destined for small businesses. “All we’re looking for is a fair share of the industry,” he added.
Last year, the SBA reported that the government had set a record in 2008 awarding federal contracts to small businesses. However, it said only 21.5 percent of the contracts went to these firms, still below the 23 percent requirement. Advocacy groups such as the National Association of Small Business Contractors said the shortfall represented $30 billion in lost revenue to the firms.
Swain of the SBA in part faulted an overwhelming crush of contracting transactions — 8 million — that government officials oversee each year. He said the government is training contracting officers to look for errors and increase quality control.
“We are periodically running anomaly reports to identify any contracts that are coded as having gone to a small business that might look questionable,” Swain said. “We’re sending those reports to the procurement officer in the agency that specifically awarded the contract to reconfirm the data.”
-by V. Dion Haynes, Washington Post Staff Writer – Monday, April 12, 2010; A15
The National Institutes of Health is confident it can survive the scrutiny of the Office of Federal Procurement Policy as OFPP reviews the agency’s governmentwide contracting authority.
“We feel very confident that we have a successful program,” said Diane Frasier, director of the NIH Office of Acquisition Management and Policy, said April 7. “We are tried and true.”
NIH has come under some increased scrutiny as reports have surfaced that the General Services Administration has asked OFPP to not extend NIH’s GWAC authority.
Fraiser would not explicitly say whether NIH’s governmentwide acquisition contract would receive the blessing from Office of Management and Budget procurement officials, but she said her program has been around for 14 years and has received OMB’s designation as a GWAC host since 2000.
To be a GWAC, OFPP must grant an agency the designation. And few are given. Agencies with designations must get OFPP’s approval whenever one of their GWACs comes up for renewal. Compared to the number of multiple-award contracts surfacing throughout the federal government, government-wide contracts are a rarity. Only NIH, the General Services Administration, NASA and the Environmental Protection Agency now have the designation.
NIH’s Information Technology Acquisition and Assessment Center (NITAAC) has submitted its materials to OFPP. Frasier expects to sit down this month with Daniel Gordon, OFPP administrator, and his staff, to discuss NITAAC’s status as an executive agent of GWACs.
“We have to assure them that we have a well-run program,” Frasier said. One proof of its success is its sales. Since January NITAAC has had more than $100 million in orders on its Chief Information Officer-Solutions and Partner2i (CIO-SP2i) GWAC.
She also said agencies trust NITAAC enough to send their big orders to the center. Agencies, such as the Defense Department, have looked to CIO-SP2i for demands with engineering and program support, security information management systems and Internet-accessible database services. The Obama administration’s drive for a more open government may even bring more customers to NITAAC, Frasier said.
If NITAAC gets the designation from OFPP, Fraiser can take the next step in getting bids for its CIO-SP3 and CIO-SP3 Small Business contracts. NITAAC has already released a draft request for proposals and in March formally responded to questions about the contract. Fraiser said she expects business to continue growing, and to that end, NITAAC has put the ceilings for each CIO-SP3 contract at $20 billion.
Still, NITAAC has lost business as agencies, such as the Homeland Security Department, launched their own department-wide IDIQs or as other agencies set up multiple-agency contracts, Frasier said.
Despite agencies’ efforts to launch their own vehicles, Frasier said they should realize the GWACs have strict standards and reporting requirements for OMB. They are held to a higher standard, unlike the other contracts popping up.
Multiple-agency contracts are similar to GWACs in that both are interagency contracts. However, GWACs are specifically for information technology products and services, and agencies interested in awarding a GWAC must first get OFPP’s permission. They don’t need that approval to award MACs.
Facing OMB’s review of her program, Fraiser said she’s not running a “fly-by-night operation.”
“NIH has 14 years of experience in running a major IT program, and was one of the first programs to earn OMB’s designation as a GWAC,” Frasier said.
By Matthew Weigelt – Apr 08, 2010 – About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week.
The General Services Administration seems to again be pushing to be the only provider of governmentwide acquisition contracts. The agency’s GWAC director is trying to get the Office of Federal Procurement policy to strip GWAC authority from the National Institues of Health, according to Joanne Woytek, program manager at NASA’s own Solutions for Enterprisewide Procurements GWAC, wrote today on FCW.com.
Woytek reported this in a posting to Harvard professor and FCW blogger Steve Kelman’s Facebook wall, and Kelman in turn based a blog entry on it.
Woytek said Friday morning that she has not been contaced by GSA or OFPP about rescinding NASA GWAC authority.
Officials from NIH’s Information Technology Assessment and Acquisition Center are slated to meet soon with Dan Gordon, OFPP administrator, to discuss a request he recevied to remove NIH’s Chief Information Officer-Solutions and Partners contract from the list of GWACs, according to Kelman.
Woytek said in her Facebook posting that she thinks GSA will try the same maneuver with SEWP when it comes up for renewal in 2012. Her Facebook posting and comment on Kelman’s blog were just “heads up” that she wanted to pass on to him, she said Friday.
None of the agencies involved responded to requests for comments.
Overall GSA’s move, which is not the first attempt by the agency, raises the question of whether the government has too many GWACs, multiple-award contacts and indefinite-delivery/indefinite/quantity contracts, and if they have started overlap.
Experts are split on the decision.
Competition among contract vehicles, including the alternative default contracts inside each agency, promotes customer service and innovation, like competition in other markets, Kelman wrote. When GSA had a monopoly on the government contracting business, it also had poor customer service and little innovation when it had a monopoly on the government buying market, Kelman — himself a former OFPP administrator — wrote.
Martha Johnson, GSA’s administrator, agreed in a recent speech at FOSE 2010, saying GSA didn’t know how to spell “marketing” when agencies were required to buy from GSA. Competition has forced GSA to improve on its innovation and customer service.
However, other experts say there are too many GWACs that are selling much of the same items, especially commodity IT products. As a result, it creates inefficiencies in government operation.
Woytek disagreed with this characterization, saying there are only two commodity GWACs – SEWP and NIH’s Electronic Computer Store.
Bob Woods, president of Topside Consulting and a former GSA commissioner, said agencies should let the larger organizations, such as GSA, handle the commodities. Then the agency can allow employees in their contracting shops to attend to the agency’s unique purchases.
“Competition isn’t as important if you’re not taking care of the basics of business,” he said.
Furthermore, agencies can save money by paying the GSA’s 0.75 percent fee upfront to get general products, instead of launching their own contracts to get the same things, he said.
SEWP’s fee is 0.5, which would be even greater savings for agencies than using GSA’s vehicle, Woytek said.
At the same time, the government may be paying higher prices because of too many contracts
Ray Bjorklund, senior vice president and chief knowledge officer at FedSources, said companies believe they should be on each of the contracts to have access to a lot of business. But it creates more work and more divisions inside a company to deal with each contract’s specific requirements, such as reporting information.
As companies submit more bids and pour more resources into getting a chance to even compete for the work, costs can increase for the govenrment, he said.
Today, the marketplace has changed dramatically since the 1990s when agencies were first given the chance to start up their own contracts, he said. Now, most agencies have settled on their client, and industry is advanced enough to handle more complex work. The government now should consider GSA’s move several years ago to merge two different GWACs and created the Alliant GWAC for IT products and services. While there were some bumps along the GWAC’s way with bid protests and court cases, the principle is fine, he said.
Now, the acquisition community is waiting for officials in OFPP, who have the authority to deny an agency its GWAC status, to decision how it plans to address the issue of too many contractors or more competition.
“I wish OFPP would take a leadership position and reconcile this issue of GWACs and multiple-agency contracts,” Bjorklund said.
by Matthew Weigelt–Federal Computer Week-Apr, 01, 2010 - About the Author: Matthew Weigelt is acquisition editor for Federal Computer Week. © 1996-2009 1105 Media, Inc. All Rights Reserved.
The General Services Administration said today that it’s awarded $4 billion in contracts for hundreds of building construction and renovation projects through the Recovery Act.
More than 500 companies across the country have received contracts for the 391 projects GSA has funded so far since the Recovery Act was passed in February 2009. GSA overall received $5.5 billion in stimulus funds for construction projects, including $4 billion to improve the energy efficiency of existing federal buildings.
Vice President Joe Biden praised GSA for stretching its Recovery Act dollars further than originally planned. Due to the slumping economy, bids came in lower than anticipated, allowing GSA to fund an additional $173 million in work. “By delivering on-time and under-budget on these green retrofit projects, we’re not only making more cost-saving building improvements than anticipated, but creating new opportunities for more than 500 companies nationwide,” he stated.
Some of the projects now underway include construction of a new energy-efficient courthouse in Austin, Texas; installation of a solar roof on the Veterans Affairs building in downtown Philadelphia; and the conversion of a former World War II munitions plant in St. Louis into a high-performance green building.
by Tim Kauffman-Federal Times-Apr. 7, 2010
Consumer demand may remain sluggish, but the federal government is still pouring stimulus dollars into the economy, to the tune of more than $500 billion annually. And though most government contracts go to big corporations—the GEs and Boeings of the world—23 percent of all government spending (some $115 billion) is set aside specifically for small businesses.
The process of winning a federal contract can be painstaking, long, overwhelming, and certainly competitive, but the potential payoff can be huge. If you are interested in government work, how can you get started?
American Express OPEN’s Victory in Procurement program for small business recently conducted a survey of 1,500 entrepreneurs who were government contractors or actively pursuing a contract. A panel of three small business owners and two government officers gathered as part of an all day event organized by OPEN at the Grand Hyatt Hotel in New York on March 31 to discuss the survey’s findings with more than 400 small business owners and to offer their tips to make government contracting easier for your business. Here’s what they had to say:
Start small. This was the No. 1 tip from successful small business contractors. Government agencies view past performance as a key indicator of potential success, and to get your foot in the door, you should bid on projects worth as little as $3,000. A good strategy is to start by subcontracting. More than half of all the surveyed federal contractors said they got their start by pursuing these opportunities. “Find out who the larger prime contractors are, and offer to provide your services to them,” says Julie Weeks, president and CEO of Womenable, a business consulting firm based in Empire, Michigan, that focuses on enabling women’s entrepreneurship.
Do your research. “Many small business owners think that the government’s not going to buy what they have,” says Susan Sobbott, president of American Express OPEN. “[But] they buy almost everything.” Much of your research can be done online. The first place to start is registering yourself on the Central Contractor Registration (CCR) database, where you can create a profile making it easier for government procurement officers to find your product. Then, get on the pre-approved bidder list on the General Services Administration (GSA) schedule, where you can also look up what your competitors are doing. For a complete list of all Federal Business Opportunities, visit fbo.gov. Knowing your specific target market will help, says Randall Lebolo, president of Lebolo Construction Management, a construction company in Boynton Beach, Florida, whose business is now 90 percent government contracts.
Stay persistent. In the survey, contractors reported that it took almost two years on average to win their first federal contract. “Preparing for a government contract is like training for a marathon,” Sobbott says. The most successful contractors unsurprisingly invested the most time and money in the bidding process—an average of $86,000 in cash and resources during 2009, according to the survey.
Cultivate relationships. “You think of the federal government as this cold entity, and that it’s all about putting together a big proposal, but it’s still all about relationships,” says Maureen Borzacchiello, president and CEO of Creative Display Solutions, a trade-display company in Garden City, New York, that has bid on five contracts. Relationships with government procurement officers are crucial. Agencies also have liaisons from the Office of Small and Disadvantaged Business Utilization (OSDBU) who will lobby on your behalf. Partnerships with other small contractors are also important; bidding for contracts as part of a team is another good strategy for getting started.
by Peter Vanden Bos – INC Magazine – Mar 31, 2010