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What You Can Learn From Losing a Government Contract

Government contracting can be a lengthy, complicated process—and even when you're more prepared than ever, your bid may be turned down. These CEOs found ways to turn a rejection into a positive win for their companies.
June 15, 2017

While rejection at the end of a long, paperwork-heavy government contracting application process is never pretty, redeeming lessons can appear. These business owners have been both denied and awarded bids on a big scale. In some cases, by learning to play the game, they've gone from hearing "no" to getting a "yes" from the same agency months or years down the road. With the right balance of optimism and strategy, you might join their winning ranks.

Do Your Due Diligence

Wilbur Milhouse is the founder, CEO, and president of Milhouse Engineering & Construction, Inc., based in Chicago. Though no stranger to going after big government contracts, Milhouse generally doesn't join his team for presentations during the contract application process. But during the shortlist phase for a big one—worth roughly $70 million over a five-year period, to be awarded by Chicago's Department of Transportation—he decided to attend an interview. Since Milhouse, whose firm has nearly 200 employees, had only indirect knowledge of the bid, he was present in a backseat role.

"It was a contract we never had before, but we felt good about having an external partner on our team who had worked on this program for five years," he recalls. "As the most senior individual in the room, [the external partner] was supposed to be our go-to guy during the Q&A portion. We figured he would answer any tough questions."

When his team of five or so guys was stumped, Milhouse looked to Mister Go-To, who hadn't said a word throughout the meeting. Milhouse couldn't believe what he saw: His pinch hitter looked to be asleep.

"We should have done our homework and not relied on one guy," he laughs, now able to find humor in the situation. Having spent nearly a year and $100,000 pursuing the opportunity, Milhouse learned his lesson the hard way. "We weren't ready. We hadn't done our due diligence," he says, such as researching the contract and better questioning the external partner.

Fast-forward a year, and Milhouse Engineering & Construction just celebrated good news from the same agency. Though smaller in scale, the $10 million contract to replace all city lights in Chicago with energy-efficient bulbs was an important win. "This time we made sure all our team members were alert and could actually contribute. Before our presentation, we brought in an outside moderator for a practice 'mock' interview," says Milhouse, who was named Graduate of the Year by the Small Business Association's 8(a) program in Illinois this spring. "To prep for it, we drilled and grilled each participant." During the very tough interview, everyone on his team chipped in, making Milhouse proud. Now he knows: It takes a village, and a vocal one, to win.

Prioritize Making Connections

Jennifer Bisceglie's 20-person, Washington, D.C.-area firm Interos Solutions, Inc. focuses mostly on supply chain risk management for defense, intelligence and civilian agencies. After investing about $20,000 to bid on an opportunity through, the point-of-entry for major Federal government procurement opportunities, her team felt good about its chance of winning.

"We talked ourselves into believing that we would win the work," says Bisceglie, "so imagine our surprise when we lost."

Following the rejection, she requested and was granted an in-person debrief with the decision-maker. Through that, she discovered that the winning team actually hired someone who had previously been employed by the awarding agency to work on their proposal, giving them intimate knowledge of its subject matter and mission.

You might want to shortcut the process, but you can't. Patience pays off in dividends—and awards!

—Jennifer Bisceglie, CEO, Interos Solutions, Inc.

"People buy from people they know. It's unfair, but it's true," Bisceglie says. Although an introvert by nature, she now prioritizes connecting with people at industry events. "It's really difficult to sit behind your desk and win a lot of work. That's why I focus my energy on very targeted networking."

Preparation is her other key to success. Of a recent win, she says, "Eighteen months before the RFP was expected to be on the street, we began meeting with the customer. In that time, we discussed our capabilities, grew to understand their challenges and shared some ideas on potential solutions."

Before bidding, Interos did its due diligence by identifying potential teaming partners, as well as competitors. The professional firm they hired to help with writing and managing the proposal also enforced a compliance matrix for the application process.

"We learned not to drink our own Kool-Aid and were accountable for each step," says Bisceglie. "You might want to shortcut the process, but you can't. Patience pays off in dividends—and awards!"

Focus on All Wins, Not Just Big Wins

In business for 16 years, Jo Steinberg's Midland Health provides corporate wellness and flu shot services nationwide. The Brookfield, Wisconsin-based company is certified by the Disadvantaged Business Enterprise (DBE) and Women's Business Enterprise National Council (WBENC).

To better qualify for g­overnment contracting opportunities set aside for small businesses, Steinberg advises other entrepreneurs to get as many certifications as possible. "You need to make yourself as visible as possible. Get to know the people who conduct certifications and ask them for help getting connected," she says. "Also look on LinkedIn for diversity contract managers and do everything you can to make them aware of your company, your products and where you will are able to serve them. And of course, make sure you are always in compliance with government rules and regulations regarding your industry in each state."

Although Steinberg knows the bidding process can reach absurd heights of complexity, it can also be shockingly simple in the end, at least on the state and local levels. On certain bids, she has worked with Dustin Keith, a Florida-based business development consultant who helps companies pursue contracts and find opportunities as subcontractors or teaming partners. A decision-maker from a California state agency once called him and said that she had to break a tie between his bid and a competing one by flipping a coin. With a witness in the room, she tossed the coin. Over the phone, he heard it spinning on a table, then land. He won the deal. "It was a strange and funny transaction," he says, "but totally authorized under the California state contracting manual."

In Steinberg's own experience, she's found that sometimes "doing things with the government is not a piece of cake. It can be really convoluted. That's why so many business owners give up."

Her most discouraging experience was several years ago, when she traveled to Texas for the final step of securing a U.S. military subcontracting opportunity. "When the National Guard has a call for people to go overseas, a lot of physicals have to happen quickly. Physicians will subcontract services to speed things along," she explains.

Upon arrival, Steinberg realized the trip was pointless: The contracting physician had decided he didn't want to share any of the workload after all. "I can't tell you how disappointed I was. I was counting on that revenue," she says. "But you have to take the attitude, 'You win some, you lose some.' Tomorrow's a new day, and you never know what's around the corner."

On that trip, she learned that nothing is for sure, but even this "no" created an opportunity for a “yes.” As a result, she has turned her focus from just big contracts to all contracts. Since the Texas lesson, she has worked with Milwaukee County on a small contract with a big ripple effect. "That agency provided a reference for us when we bid on a very large government contract," she says. "And that reference helped us win the big job. Rejection forced me to widen my scope, and I'm so happy it did."

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