Winning work from the U.S. government – the largest purchaser in the country – is not easy. It is critical to understand the rules and regulations of how the government does business. You also need a deep understanding of what the customer wants, much like you do with a private sector opportunity.
In most cases, larger government contracts will issue a request for proposal (RFP) that outlines the scope of work, due date, and specifics that should be included in the contract. Unlike a private sector RFP, the due dates and the specifics are absolute. If you miss the deadline or do not address specific requirements, your proposal will not be considered.
To understand the rules and regulations, designate a member of your team to become very familiar with the Federal Acquisition Regulations (the FAR) as it pertains to your business. The FAR is more than 2,000 pages, broken down into 53 sections. It can be quite intimidating for a novice user.
The FAR offers a bit of information about the process of selling to the government and a lot of information about pricing. The government has established these rules and regulations over a long period of time in an attempt to counter every possible scam. In most cases, the government will have a “most favored nation” clause in the contract that requires it to obtain the best price offered for the service and/or product. If it finds a vendor has sold similar products or services at lower prices without reasonable cause, it has the right to retroactively change the pricing.
It can be difficult for service companies without prior government experience to land their first opportunity since past performance is a key criteria. To overcome this obstacle, many companies begin by working as a subcontractor to an established government contractor. This enables them to gain experience with the government and that specific customer. The prime will typically verify that the subcontractor has a strong job costing system in place and may request a calculated overhead rate that is determined in compliance with the FAR.
To win proposals, you must be very selective about bidding. The RFP process is expensive and the government has thousands of options, so the best government contractors have a very thorough bidding process which typically includes the following questions:
- Do we have good experiences with this customer?
- Can we articulate how we are better than the competition?
- Were we part of drafting the RFP?
- Are we better and cheaper than the competition? Note that successful bidders often offer the lowest price and are technically competent.
- Is there an incumbent? If so, is the customer happy with current provider?
- Are there sufficient resources to complete the project on time and within budget?
- Will other opportunities be lost if we win the project?
- Will we get other opportunities if we win and do a good job?
- Do we need other companies to partner with us on the proposal?
If you are new to this process, there are a number of websites that can be of help. Some of our favorites are:
- The Small Business Administration
- The General Services Administration
- Capture Planning
- Federal Business Opportunities
- Government Bids
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