How to Sell to Uncle Sam

Understand That the Government Operates Differently

Goal: Assess whether your company can succeed in this market.

Unlike private companies and consumers — who determine their own sometimes arbitrary criteria for purchase decisions — government buyers must follow rules set out in the 1,600-plus-page Federal Acquisition Regulations (FAR), which seek to make procurement decisions fair, transparent, and a good value for taxpayers. The rules largely succeed at those goals; but they also make the process extremely complicated. Books with 1600 pages will do that.

Before you even set out to learn the procurement process, understand that the government often uses its buying power to squeeze sellers’ margins, with profits on some contracts even capped by law. For a government contract to be worth the effort, then, you have to make it up in volume. (And it’s not hard to do when the typical contract runs $10 million to $20 million and higher.) Also realize that the bureaucracy makes for a long sales cycle. “The government doesn’t pay until it receives something, even if it’s a professional service, like support for software,” says Brian Dunn, managing partner at the Winvale Group, a Washington-based consultancy that helps companies sell to the government.

So look before you leap, says Judy Bradt, CEO of Virginia-based Summit Insight, which advises companies on how to land government contracts. Think about how selling to the government fits into your overall business strategy: What are your core competencies and which agencies need what you provide; what sets you apart; and are you willing and able to devote the necessary resources to win the government’s business? “Look at the time and money it can take to finance, to develop, to win, and to perform this business,” she says. “When you get to the end of this process, you have a tentative go or no go.”

Know the Customer

Goal: Identify what you have that the government needs.

Nobody generates reports and statistics like the government. Which is a good thing for businesses; because it means that a wealth of market research is available free and online that can genuinely help you target the agencies that may need what you do. Start at FedBizOpps, where the government lists requests for proposals (RFPs) for the vast majority of competitive bids over $25,000. The site posts spending forecasts for each governmental agency, which detail exactly what the agency plans to buy, how much it wants to spend, and when they’ll make the purchase.

That’s just the beginning. Susan Zeleniak, president of Verizon’s federal sales group, also looks at each agency’s five-year strategic plan to get a sense for their upcoming priorities; but then she goes deeper. “I sell technology, so I look at the CIO’s plan for the next five years and see what business problems they have and how we could help,” she says. You can anticipate future business opportunities by tracking bills as they work their way through Congress and by monitoring the priorities of the administration.

It’s also worth noting which agencies are on the hot seat. Let’s say the General Accounting Office (GAO), Congress’s investigative arm, blisters the Social Security Administration for not processing payments quickly enough. If that leads to hearings and media coverage, you can be pretty sure that the government will launch an initiative to improve that process shortly thereafter.

Get on a GSA Schedule Contract

Goal: Make it easy for the government to buy from your company.

The first time you land a government contract, you’ll quickly hear about the General Services Administration’s (GSA) Schedules Program. The GSA, which is the government’s purchasing agent, can make long-term agreements to buy from you at what are called “most favored customer” rates. These schedule contracts let the government buy quickly without the hassle of going through competitive bidding. Becoming a GSA schedule contractor can be highly profitable in its own right; just as important, though, it prequalifies you for just about any government work you pursue, including competitive bids. “A GSA schedule contract is sort of a ticket to play,” says Bill Crosley, national vice president of government sales for J&J Industries, a 50-plus-year-old Georgia-based carpet manufacturer.

But schedule contracts are not easy to get, often taking months to process as the government thoroughly vets a company’s financials, operations, and references. “They went to our operations center, interviewed finance and accounting people, and looked at paperwork. They go deep,” says Wright. Some indication of what’s needed comes from the GSA Web site:

Be prepared to furnish price lists for your products and services. Also, be ready to disclose how you arrived at those prices and to provide information about your discounting practices.

Get a Dun & Bradstreet (DUNS) reference check and register at the government’s Central Contractor Registration (CCR) database.

Follow instructions carefully. There are dozens of supply schedules — so it’s vital to both find the schedule that covers what you offer and respond precisely to all that the solicitation requests. Hurrying and making mistakes can mean having to start over from the very beginning.

Get in Front of the Decision Makers

Goal: Boost your odds of winning a bid.

Despite all the rules and procedures, people ultimately make the buying decisions. Finding the right people, hearing what they need, and telling them how you can help is essential, but it’s not easy. “It’s very difficult to get anyone from the government to respond,” says Crosley. Start by understanding that the contracting officer (CO) typically ensures that buyers and sellers follow the procurement rules (essentially an administrative function), while program officers, end users, and CIOs and the like are the people who know what an agency needs and drive the buying decisions.

How do you find these decision makers? Tireless networking. “You can go the traditional trade-show route, or you can go to events that they are hosting,” says Collis Jones, director of business development with heavy-equipment manufacturer John Deere, which has over half a century of experience selling to the federal government.

On a large procurement, the government might invite you to attend a prebid conference or to submit an invitation for bid (IFB) as a way to solicit feedback on how to structure the official RFP. If invited, go. The conference or IFB gives you a chance to influence how the government puts together a bid so that you have a better chance of landing it. “If all you’re doing is responding to RFPs that you never knew were going to come out, you’re just not going to do as well,” says Wright. And as Jones points out, once your bid is officially submitted, there’s not much else you can do. “You can’t reach out to them, you’re in a holding pattern,” he says. “Those can be some of the most gut-wrenching weeks, days, and months — waiting to hear the answer.”

Request a Debriefing

Goal: Learn from your past proposals.

In the private sector, you may lose out on a big sale because the potential buyer had a bad day or because, unknown to you, your competition included the purchaser’s son-in-law. Yes, selling to the government can be a tedious process, but it’s also much more transparent. If your company loses a bid, you have the right to request a debriefing to find out why. “They have to explain to you where you were weak and where you were strong,” says Scott Stanberry, author of Federal Contracting Made Easy.

In fact, most federal contractors request debriefings on a regular basis, says Stanberry, and even suing if you feel you lost out on a contract unfairly is not entirely unusual. Keep in mind that winners, too, benefit from debriefings. “I always do it,” says Zeleniak. “I want to understand why I won. There’s no more effective way to learn.”