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The United States Federal Government is the largest purchaser of goods and services
in the WORLD, spending over $400 Billion annually (pre-2009 stimulus package).
The Federal Government buys products and services. The products range from
toothpaste to office supplies and artillery. They also need the services of nurses,
companies, selling to the government is a way to diversify the customer portfolio and
mitigate risk with fluctuations in the economy. Additionally, once you are an
established vendor and have performed satisfactory within contract terms and
likelihood for steady repeat business. Although your profit margins may not be the
highest in this sector, the somewhat predictable budgets and buying patterns (once
you are “in”) can be a motivating factor for many businesses to establish
hurdle upon the time frames in collecting. This can usually be circumvented by
ensuring that you delivered precisely on the terms and conditions and that your
headquartered in the Washington DC area, but also have offices across the country
and the world where purchases are also made. For example, the US military has
bases in many foreign countries. While you can sell to virtually anyone by utilizing
metropolitan area as this is where the majority of the decision makers are located.
There are large government offices all over the country and if you have a service or
product for a niche market such as a military bases or one of the national
laboratories or other specialized institution, then you can easily situate your sales
The US government fiscal year runs on an October 1 to September 31 cycle, with the
peaks typically occurring at the end of the fourth quarter due to a “use it or lose it”
system. If there are unallocated dollars as the year closes, there is a high probability
that the buyers, known as Contracting Officers will purchase your items/services
during these final months of July, August and September. There are other factors
besides the ‘end of year dollars’ that plays a role in government’s decision to award a
Selling to the government does not happen overnight. There is a large time
investment on the sales cycle, as the government is a risk-adverse client. This time
span can range from 6 to 24 months – sometimes shorter or sometimes longer. You
may make 10 or more phone calls before you reach the appropriate government
contact. (There are organizations that sell government related marketing lists and
other supplemental information.) Once you reach the right contact person, you may
have many meetings with your potential client before you make it to the true
decision maker who decides if and when your product/service is needed and will be
funded.
From those meetings, presentations and demonstrations you can assess if there is a
need for your product/service in that agency or department or if you are creating
that need. Some salesmen and women may disagree and feel that the sales rep is
responsible for creating the need, but sometimes when interfacing with the
not. Both scenarios will provide some intelligence on your chances for award and
If you are responding to a request, it is important to know (or ask) where the
determine what products/services are available that meet their specific need. They
may also be interested in determining if a specific type of business can fulfill the
small business or HUB zone, etc can be found on the US Small Business
estimates, and assist in helping the issuing agency determine there is a need to
contract with your organization and demonstrating any value-added components you
possess.
Schedule, this is a clear advantage and should be included in your response. The
GSA Schedule is a “hunting license” or “ticket to the government dance” and allows
the government to accelerate their purchase from you. More information can be
found at www.GSA.gov
Formal request from the government also come in the form of Request for Proposals
(RFP), Invitation to Bid (ITB) and Request for Quote (RFQ). These formal
solicitations (or RFP’s and RFQ’s) for purchases of $25,000 are required to be
these opportunities are not simply “put out to bid” without having an intended
awardee. Companies that have been continually networking, attending trade shows
& presenting their capabilities to the government for 6-24 months, are most likely
the key players in creating the need for their solution which brought about the RFP.
The Statement of Work (SOW) in the RFP many times are written with language
designated companies including GSA Schedule holders, small businesses, etc. These
solicitations are a simple reminder that relationship building is the key component to
skills and knowing your product/service inside and out are absolutely pertinent to
your success in this vertical market. An educated and determined sales force with a
strong management team is important. The sales force must be relentless and
creative in breaking through the government walls and finding champions for their
solutions. They must be well connected at various levels – top, middle and bottom –
and present their solution as a way to make things “easier” for the government,
There are a variety of sources for the sales rep to obtain contacts. Networking
‘inside the beltway’ is important and there are an abundance of venues for one to
officer is a good start. This is a way ‘in’, even if you are not going to win the
business for that particular RFP. As previously mentioned, there are commercial
companies who sell government marketing lists – including names and contact
There are various levels of sales reps that a company may pursue. The ideal
agency where there is a great need for your services. There are limits and laws
surrounding hiring individuals in this capacity who may have the contacts to help
your organization. Sometimes, depending upon the size of your organization, these
individuals may sit on the Board of Directors or be your main government sales guru.
These folks typically understand government, (hopefully your product) and they have
been the customer and understand the processes by which the government
purchases.
Again, depending upon your company size, budget and objectives for the
government market, you may want a full sales team or just want to tread lightly into
this arena. There are many flavors and degrees of sales representation in
Washington, DC. There are agents who will sell for you, be your US presence and
ask for a high percentage commission without a monthly retainer. The most
and commission. Still others may only charge a retainer and be confined to certain
areas of their expertise such as proposal writing. Most of the individuals will have a
Trade shows are abundant as well and some are government specific (The General
are industry specific (ie. FOSE and GovSec and F-Ped). These become an opportune
venue to meet the government buyers and spend time with them, since they are
prohibited to accept gifts, lunch, dinner/golf outings, etc. These trade shows can be
an expensive undertaking but there are creative ways to reduce your cost. Some of
the conferences are looking for industry and subject matter experts as speakers for
the breakout sessions. By becoming one of the speakers, you gain more exposure, a
live audience, free press on the conference brochures and more attention and
traction at your booth. With more traction, this becomes basic sales and is a
numbers game.
It is a given that in the sales process roadblocks are met and it is the job of the sales
the program manager(s) and the individuals who have purchasing or influential
authority. Sometimes there are higher issues which could help or hamper a
the Washington DC area can also play a role in assisting with generating funding for
your solution. Lobbyist work at the levels in government – primarily on Capitol Hill
where they can help influence bills and appropriations for specific services and
products. Lobbyist fees may be higher than a seasoned government sales rep, but
will also be able to deliver for you at a different (more political) level. These
individuals may have previously worked for or with senators, representatives and
other elected officials. Most successful lobbying firms will have connections on both
sides of the political landscape which keeps them strong at times when there is a
change in power at any level within the government. Although these firms can be
powerful sources to leverage, they are not a silver bullet. All of these tools lobbyist,
sales team, consultants, agents and proposal writers, must be used in collectively to
The 80/20 rule applies in government contracts as well. Eighty percent of the
contracts are awarded to the top 20 contractors. These prime contractors are large
Raytheon, SAIC, BAE, etc. These organizations usually maintain a small business
liaison office. It can be beneficial to meet with these offices, register in their vendor
database and provide a synopsis on your products/services. Many times, when the
government is working to meet their small business set-aside contracting goals these
You can employ resources to determine if there is a market in the US government for
your product/service. Commercial companies can be hired to do this for you and
searches can be conducted to determine how much of your product/service has been
bought over the fiscal years, which can be segmented by quarter and company
name. It is also useful to search for competitors and understand their position in
the marketplace to determine your potential share. Government budgets are not
secret and this information is pertinent (and available) when focusing on your target
client.
With this information, you may determine that certain agencies may be better suited
and equipped to purchase your solutions than others. By narrowing your target
client to the top 3 agencies best aligned for your product/service based on their
budget, your budget and your contacts within the agency, you can strategically
literature geared toward the government, will help the buyer in understanding how
Each administration, Republican or Democrat has specific goals and focus areas.
Some of these are determined by world events (wars and economic crisis, etc.) and
others are simply areas that they deem important (ie. green and environmental
clients’ mentality and challenges, thus being better able to provide a solution.
who are physically located within the DC metropolitan area. Basic sales skills tell us
that business is earned and awarded to the company/individual where there is a
relationship. In order to build those relationships, the sales rep, the lobbyist, the
consultant for your company should be located close to the client – primarily
Government purchases can – and are also be based on a variety of factors including
price and quality. For many years, most contracts were awarded based on lowest
price regardless of quality or value. This evaluation and award method was not well
received and did not work well for both buyers and sellers – for obvious reasons.
Vendors were caught in a bidding war on price, losing great margins and government
did not always receive the best solution for the need. Best value became part of the
decision making process for the government buyers. This is important to remember,
One strategic advantage many government contractors have is the GSA Schedule.
GSA is the General Services Administration, one of the many government agencies.
Government establishing products and services for a set price. The GSA Schedule
does NOT guarantee any sales, as it is simply a “ticket to the dance”, with no
that they first look for this item on the GSA Schedule rather than seeking it in the
establishing purchasing rules for the government. The FAR is administered jointly by
from you thus accelerating the purchasing process. This helps streamline the
procurement process, as the government knows they are obtaining the best rate for
the product/service.
The GSA Schedule is actually an open and rolling solicitation, meaning that it acts as
an RFP with no close date. There are various amendments that are made to the
There is extensive paperwork involved in obtaining this GSA Schedule contract. This
area) are available to assist you in this process and some many specialize in various
sectors, some providing ancillary services such as business development and sales
efforts on your behalf. Your investment if you choose to outsource this can range
from $8,ooo to $25,ooo depending upon the organization and the services you
select.
There are some “fine print” details about GSA Schedules. GSA is a non-appropriated
agency, meaning that they do not receive federal funding and therefore must self-
fund. This funding is generated by assessing an Industrial Funding Fee (IFF) of less
than 1 percent on all GSA Schedule sales. The fee is .75%, enough to cause
administrative and accounting/financial work for the vendor. These fees must be
reported and paid quarterly (calendar year) to GSA. There are commercial firms who
Additionally, there is a sales quota of $25,000.00 USD for the first 24 months of your
GSA contract and $25,000.00 for each year thereafter. If these thresholds are not
GSA contracts ensure that the government is obtaining the best price for the
your GSA proposal, GSA requests a dated copy of your commercial sales price list.
Along with this, GSA requires details on any price deviations from that commercial
price list – or your CSP – Commercial Sales Practice. They will compare your MFC, or
Most Favored Customer pricing to your proposed GSA Pricing. For each item you are
providing to the government, they expect to receive the same or a comparable price.
These issues are resolved through formal negotiations with your GSA Contracting
Officer. Many companies shy away from government contracting, but the GSA
Because the GSA Schedule is a contract, there are certain terms and conditions that
apply. There are limitations on price increases per 12 months. These vary by
schedule. These changes are contract modifications and must be formally approved
by the Contracting officer. These tasks can be completed in-house by someone
in GSA Schedules.
The GSA Schedules are segmented by industry. For example, Schedule 84 is for Law
Technology services. Each schedule has similar basic terms and conditions, but they
requirements. This can include but is not limited to: possessing a Dun & Bradstreet
Past Performance rating is also required, which is a formal process conducted by the
prices, that fall within the generic descriptions in the GSA Schedule Solicitation;
submit offers in English and accept payment in U.S. Dollars; ensure that all items
offered are compliant with the Trade Agreements Act; accept U.S. Government
and completing applicable GSA training, which is an on-line course entitled Pathway
To Success.
Completing the GSA Schedule paperwork process can range from about 3-10
months. There is a 30 Day Express Program – offered only for specific schedules
that meet specific criteria including financial ratios and sales volumes. Please note,
the proposal for the 30-Day Express Program once it is determined you have met the
strict criteria.
Some schedules allow state and local government purchases. (Schedule 70 and
Schedule 84) This means that state governments who wish to procure your products
directly can do so through the GSA Schedule. Again, this simplifies and speeds the
acquisition process for the client. The State of California has a CMAS program –
California Multiple Award Service. CA will grandfather your GSA Schedule pricing
once you have met their additional requirements and add you to an approved vendor
list for state purchases. The District Of Columbia government also purchases directly
database. Most states have an on-line form and a nominal fee (approximately $15
your industry codes and in most cases a Tax ID Number (TIN). Foreign companies
can work with a Registered Agent in the US, establish a US subsidiary or explore
other alternatives for obtaining a TIN. Once you are registered you will receive RFP
notifications and such designated to your area of expertise and industry. Again,
these come down to relationship building and leveraging sales representation, etc.
Some states also have formed consortiums whereby they purchase collaboratively.
contact information and responding to RFP’s, etc. Depending upon your sector, you
may receive multiple emails per day requesting a quote or proposal. You can choose
to respond or not. Keep in mind, the buyer may be shopping for a low price or
something specific, so it’s best to know the buyer – and if you don’t – make it a point
to know him/her. B2G still involves basic sales, and relationship building.
Government is a huge entity and you can’t know everyone, so focus on the agencies
that work best with your solutions and where your solutions compliment their needs.
Sometimes you will get lucky with a quick buy. If you do, get to know that person
and understand why they bought from you so that you can replicate your process.
Foreign businesses will have to pay close attention to the Trade Agreement Act and
Buy American Act. The TAA focuses more on country of origin relating to
manufacturing and products – how and where the end product is composed. The
exceptions relate to the US government procuring non-US goods that are not
Federal Acquisition Regulation and also the General Services Administration website
for current information and language regarding The Buy America Act and Trade
Agreement Act for foreign companies, as these regulations are undergoing changes
different in some of the ground rules. Knowing those rules and identifying
government savvy experts to guide you through the government puzzle - can be the
differential in being another government vendor and being the successful and
is the founder and principal of Jennifer Schaus and Associates. Ms. Schaus has domestic
and international clients who provide both services and products to the US Government.
Her expertise is in representing clients to complete the GSA Schedule process and
advising on best sales practices for the US Government marketplace. She also provides
Venture Capital for various industries. For more information and to contact Jennifer
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