Stimulus Projects – Advantage, GSA Schedule Holders
Selling to the government can be a lucrative long term investment. A company who has done their homework and understands the process and time frames, obstacles, paperwork and financial investment involved will be successful. Government sales should be evaluated to in the same way you would evaluate selling to a foreign country; sales is sales, but there are different rules, processes, internal cultures and protocols to keep in mind.
For a standard B2B organization, selling to the government can be a smart way to mitigate risk, diversify the customer base and survive economic fluctuations. Government business can be steady with predictable buying patterns and guaranteed payment.
The US government is the largest purchaser of goods and services in the WORLD (pre-stimulus) spending $400 Billion dollars annually. There is money to be made in this unique space.
The first step to considering the government as a customer is to conduct market research for your solution. You can do this yourself or outsource to a government consultant who can quickly provide in depth information and analysis. This data will include information about market share, competitive intelligence and historical government spend in your industry and strategic advice on best suited agencies. With that information, you should have a sales target.
Game Plan: Players & Tools
Time and money are the necessary tools to cracking the government nut. Time is essential as the government is a risk-adverse client and there are many hoops to jump through prior to winning business in this sector. Substantial contracts can take anywhere from 6-24+ months to be realized. Government budgets are cyclical but are appropriated in advance, so you may be in line behind the competition but this doesn’t mean you can’t also get a piece of the pie. You just need to get into the rotation.
A sales staff dedicated 100% to the government market is necessary. An educated and aggressive sales force with experience in your industry and also in the government arena is crucial to be effective. Sales agents, consultants and lobbyist can also be helpful and leveraged in conjunction with the sales team. Networking events, trade shows, presentations and meetings are part of the plan and routine.
Because the government is risk-adverse, relationship building in sales process is imperative. Once you have made your case, presented your solution, found a need and the budget dollars to cover the cost – the real magic begins. All purchases over $25k must go out for bid and are found on www.FedBizOpps.gov Most purchases at this level (regardless of B2B or B2G) are slated for an intended recipient or a select few capable of performing within specific terms and conditions. If you have been effective, these solicitations have been written with language that is geared towards your solution.
The GSA Schedule is your government hunting license. Much of the stimulus spend will flow through this contracting vehicle. http://www.govexec.com/story_page.cfm?articleid=42281&ref=rellink The GSA Schedule is a highly leveraged open contract that allows commercial companies to sell direct to the government. There is specific business criteria that must be met to obtain the GSA Schedule and the process can and will take several months. Efficient companies will outsource this to a government consultant due to the opportunity cost associated with completing this internally. Once you are “on Schedule”, you are viewed as a serious contender by the government. The government is required by the FAR (Federal Acquisition Regulation – the government Bible) to first look for the item desired on the GSA Schedule prior to seeking on the open market. Government also prefers to purchase from the GSA Schedule as it accelerates the procurement process – making it a win-win situation for both you and your customer. The GSA Schedule does NOT however guarantee any sales, as it is only a ticket to the dance. (*GSA Schedules are also utilized by state and local governments as well as a select list of NGO’s.)
While a good portion of the ARRA stimulus spend is flowing to businesses who have been in the mix and played the game for several months or years, there are still opportunities to win government contracts. Before, during and after the stimulus money comes and goes, there will be contracting opportunities. The goal is to quickly determine your market share potential and your return on investment while being cognizant of the key resources required and leveraging the resources available to you.
Jennifer Schaus is the principal of Jennifer Schaus & Associates in Washington DC, a leader in government consulting and GSA Schedule services. www.JenniferSchaus.com
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