Securing government contracts can be highly profitable for small businesses, once they learn to navigate the system and create proposals that capture the attention of federal agencies.
At a recent American Express OPEN for Government Contracting: Success Series event in San Diego, experienced contractors offered their advice to help win these government contracts.
In 2015, the government purchased more than $430 billion in goods and services from the private sector, according to government website USASpending.gov. Because federal agencies must set aside 23 percent of their prime contracts for small businesses, said Lourdes Martin-Rosa, founder and president of Government Business Solutions and American Express® OPEN Advisor on Government Contracting, "small-business owners can have a piece of that pie."
During the day-long event, speakers offered the following tips for success:
1. Do your homework.
The more you know about government agencies and their needs, the better your chances will be of winning contracts, said Deniece Peterson, director of industry analysis for Deltek. Each year she reviews the federal budget in an effort to anticipate government purchasing needs. "You have to turn data into intelligence," she explained. "You have to put the puzzle pieces together."
2. Use NAICS codes that reflect what you do best.
Federal agencies use the North American Industry Classification System (NAICS) to classify businesses according to the products and services they offer. Will Gist, deputy director of the San Diego Contracting Opportunities Center, said it's important not to use too many NAICS codes when bidding on government contracts. While there's no limit to the number of codes you may use, he said, having too many can make you look like you're working outside your primary area of expertise.
3. Market your business.
An important aspect of successful government contracting is marketing yourself, according to Gist. If you don't tell potential clients what you can do for them, you may not be able to differentiate yourself from the competition. A good way to market yourself is to create a capability statement you can send to potential clients. Like a resume, it should tell federal agencies about your experience and capabilities.
4. Look for agencies that need your services.
When you set out to market yourself to government agencies, be sure to choose the ones that are most likely to use what your company has to offer, said Martin-Rosa. When you identify a prospective agency, make sure you understand its mission, how it's organized and what its goals are. This will give you insight into the kinds of products and services it needs.
5. Respond to Requests for Information.
When agencies aren't certain about what to put in a Request for Proposals (RFP) they often send out a Request for Information (RFI) to learn more about the things contractors can provide, said Martin-Rosa. Responding to an RFI gives you a chance to suggest what should be included in the RFP. If you can help an agency build an RFP, you'll be more likely to win the contract, Martin-Rosa said. "It is relationship building."
6. Attend pre-solicitation conferences.
If you receive a notice inviting you to attend a pre-solicitation conference to discuss a potential contract, it's in your best interest to attend, according to Martin-Rosa. Taking part is one of the ways contractors learn about RFPs before they're issued. By attending, you're making it known that you're interested in working with the agency—and you also are developing valuable contacts.
7. Only partner with contractors you trust.
Partnering with other contractors can greatly improve your capabilities and increase your chances of winning government contracts. However, it's important to partner only with people you trust, said Ron Perry, president and CEO of Teya Services. According to Perry, you can protect yourself by carefully researching potential partners. He recommends teaming only with companies that are as committed as you are to delivering excellent goods and services.
8. Write proposals that can win contracts.
Writing proposals that consistently win contracts isn't easy. Carl Dickson, founder of CapturePlanning.com, said your goals should be to provide government agencies with all the information they seek and to find ways to differentiate yourself from other bidders. To win contracts, said Dickson, you must convince agencies that you're offering a quality of goods or services that other companies can't match.
9. Try to see things from the agency's perspective.
Most contract proposals are won or lost based on how well the author understands the agencies he or she is working with, said Dickson. Before you begin writing proposals, make sure that you understand what the agencies need. Whenever possible, talk to agency evaluators about the things they like and dislike about the proposals they see, said Dickson.
10. Be persistent.
If your initial proposals are rejected, don't give up. It takes time and commitment to learn the ins and outs of federal contracting. Each time you respond to an RFP, you're gaining valuable experience, said Gist. Gist calls the process "learning to speak government contracting." It requires persistence, hustle and a desire to succeed.
For more government contracting resources, visit openforum.com/governmentcontracting.