The business of government contracts
Winning a government contract is not easy, but they offer tremendous revenue opportunities that should not be ignored.
Marine Fabricator | January 2012
By Barb Ernster
Despite all the focus on cutting government budgets, including across-the-board military cuts, Uncle Sam still needs good contractors.
Winning a government contract is not easy, but once you learn how to navigate the system, a host of opportunities can happen that might not have been on your radar.
Wes Fue spent 30 years in federal law enforcement and was a source selection official for the Transportation Security Administration under Homeland Security before he retired and began consulting with businesses on how to obtain government contracts. The chance of landing a government contract on your first try is about one in 1,000, and of the hundreds of businesses that Fue has consulted, several have won a first contract. But when people ask him if government is right for their small business, his unequivocal answer is “yes.”
“Nobody buys more goods and services than the federal government,” Fue says. “People are told it’s very hard to do business with the government. It’s not hard, but it is cumbersome. There are at least nine different areas where a marine fabrication shop could enter to do business, and some offer a tremendous revenue opportunity that should not be ignored.”
The North American Industry Classification System (NAICS) is the standard used by Federal statistical agencies in classifying business establishments’ size, and their products or services code.
“On the marine side for fiberglass and composites, the single overriding NAICS code is a three-to-five-billion dollar opportunity,” Fue notes. “If you’re working within the medium of canvas and composite coverings, there are many areas you can go into—Merchant Marines, Army, Navy, Coast Guard and Customs, which all have boats.”
The Department of Defense is the obvious place to look for contracts, but is not always the best, according to Fue. He notes that there are more than 1,100 other agencies to contract with; you just need to find out where they are posted and how to market directly to them. This is where his services can be beneficial.
Where to start
This first step to bid on any government opportunity is to register on the Central Contractor Registration site and the online representations and certifications application (ORCA).
“I find it is important for everyone to be CCR registered even if they’re never going to bid on a contract,” notes Teresa Bouchonnet, a business development specialist with the North Carolina Military Business Center in Franklin, N.C., who specializes in government contracts for the textile industry. Its website (www.ncmbc.us) has a number of links and helpful data for anyone wanting to enter this market.
At the end of the CCR, you will be asked to set up a Dynamic Small Business Profile on the U.S. Small Business Administration site (small business classification is generally fewer than 500 employees). This profile includes a capabilities statement with keywords to describe your products and services. It is an important marketing tool where government agencies search for companies and prime vendors search for subcontractors. Foreign companies can also search the site for U.S. partners.
“When I’m consulting with businesses, I show them what their competition has posted or where they have failed to post any information,” Bouchonnet says. You can also identify your company’s capabilities by NAICS codes, but most people will search by key words.
Most government bids for more than $25,000 are posted on FedBizOpps which currently lists more than 16,000 active opportunities, including more than 50 related to marine equipment and fabricated products for such agencies as the Department of the Navy and Homeland Security. Bouchonnet recommends monitoring the site several times a week.
Another site to monitor is the Defense Logistics Agency (DLA) which posts opportunity items on the DLA Internet Bid Board System (DIBBS). This is a web-based application that provides the capability to search for, view and submit secure quotes on requests for quotations (RFQs) for Defense Logistics Agency items of supply. DIBBS also allows users to search and view requests for proposals (RFPs), invitations for bid (IFBs), awards, military specs and other procurement information.
Government departments produce a procurement forecast each year that is published in print and online, searchable through their websites. The forecast provides a heads up on what each department is seeking to purchase, point of contact, and when the RFP will be issued. Companies can call for an appointment with the contact person, and send out a capabilities proposal in advance.
Companies can also attend agency-sponsored conferences (in person or by webcast) to learn what the agency is planning and meet the program contacts. “Businesses have won contracts based on price, product and quality of goods, but it also helps that the government can put a face to a business,” Bouchonnet says. “Over the last few years, more textile businesses are working with the government in this changing field so that new products can be added to their plans.
Current events can help inform what is happening with our military operations worldwide. The recent announcement by the Obama Administration calling for a shift in some focus from the Middle East to Asia and more reliance on the Navy and Air Force, will give some insights into what type of textile products might be needed, Bouchonnet states.
Pros and cons abound
Sheri Fisher, military sales manager at BondCote Corp. in Pulaski, Va., says the challenge of working with the government is that it can be really good or really bad.
“Contract awards do not happen in a short period of time,” she says. “We’ve seen some take two years to be awarded. This business is continually changing; specifications, appropriations, regulations are one thing today, but tomorrow may paint a very different picture.”
BondCote Corp. supplies coated, laminated and composite fabrics to government and performance specifications for the military, FEMA and Homeland Security. It is considered a first-tier supplier to the prime contractors, but also sells directly to government agencies. Most of its contracts, either direct or non-direct, are out of the procurement agencies for Army, Navy, Air Force and Marines.
There are shipping and marine opportunities within the government through many procurement offices for FSC (Federal Supply Class) 2040, 2050, 2060 and 2090, for example, balloon floats, boat covers, various other covers and bags. Fisher recommends that small businesses tap into their state’s PTAC office. Congress created this program to help small businesses move and grow in the government, state and local contracts, and it’s free.
“All you need to do is set up a meeting,” Fisher says. “A program will be built around your contract interests. The company will receive leads daily based on those interests for federal, state and local, as well as Canada. They also provide assistance in past purchase history of an item.
Besides the SBA, FBO and DLA mentioned above, Fisher also suggests registering at NECO (Navy). Once you set up your profiles with NECO and FBO, you will receive daily leads based on interests. BondCote designed a page on its website to provide quick access to the most popular government links.
A phone call away
Katie Bradford, owner of Custom Marine Canvas in Noank, Conn., started working with the Coast Guard in the mid-1980s after getting a call to measure a boat at Governor’s Island in New York harbor. The captain called 12 other boats for her to measure that day, which resulted in some immediate orders and others that came two years later. Eventually, 30 percent of her business was coming from government orders. That has decreased over time, but Navy and Coast Guard orders from Maine to the Gulf Coast continue to be a steady part of her business, which primarily serves the recreational boating market.
Bradford has never registered with the government and didn’t go looking for contracts. At the time, the government was slow to pay through its purchase order system, and many people didn’t want to work with it. The government started paying with a credit card, and that hasn’t been an issue for her.
“The government streamlined the purchasing business so that they are easier to work with,” Bradford says. “They can check off on their box that I’m a woman-owned company and that’s important to them. Our location is definitely good for us. We’re four miles from General Dynamics Electric Boat (the primary manufacturer of submarines for the U.S. Navy) and the Coast Guard Academy is located here. We do a fair amount of work for the boats that belong to the academy, the submarine base and the Navy sub contractors.”
GSA contracts are another route
General Services Administration (GSA) contracts can be a great way for companies to expand sales of products and services. It’s a quicker way for the government to purchase products and services because the GSA contract holder is prequalified and terms are prenegotiated. More and more federal agencies are requiring products and services to be purchased through a GSA contract instead of through competitive bidding options like the FedBizOpps website.
The government procurement process is a challenging field to navigate and might not lead to contracts immediately, but it can lead to long-term business and certainly increases visibility of your company among senior military leaders, program managers, procurement staff, prime contractors and bidders. Even if you are not the winner of a bid, always ask for a debrief within two days of a contract award. This will help you learn how to improve your bid next time. If the contract bid award is too low, Bouchonnet says, remember that you are in the business to make money.