In Part I of this series we explored some of the compelling reasons small businesses might want to branch out into government contracting and some of the marketing and operational nuances involved if they do. Here in Part II of our series, we distill some of those larger themes into concise, actionable advice from experts in the field.
Tip #1: First, get your red tape in order. Here are five quick and easy administrative steps a business owner should complete before embarking on any quest for government contracts.
- Get a nine-digit DUNS number for your business.
- Know your business’s NAICS codes.
- Complete the federal government’s free Central Contractor Registration (CCR) and certify your small business as specially designated (e.g. veteran-, woman-, or minority-owned), if applicable.
- Obtain an active Marketing Partner ID Number (MPIN) from the CCR.
- Use your MPIN to register and certify your business using the Online Representations and Certifications Application (ORCA).
Tip #2: Conduct market reconnaissance. To find out which agencies have recently bought what your business is selling, look through the statements of work on current federal contracts, which can be found on the FedBizOpps website, explains SCORE mentor Jean Jolkovski. “Then go find similar projects in those same agencies nearby.”
Tip #3: Get listed (wisely). The federal government has dozens of industry-specific catalogs that its employees and project managers use to find pre-approved vendors from which they can buy. Getting your small business listed in these catalogs, which are called GSA Schedules, isn’t so easy, however, and if not done right it can turn into a big headache. “I always tell small businesses to hire someone to negotiate the process for getting listed with the GSA,” explains small business contracting expert Marc Amtower. “Otherwise you can end up with too low a price or, like a lot of companies, eating the shipping cost.”
Tip #4: Understand your competition. The government makes it fairly easy to see what other vendors are out there selling in your market space, notes small business contracting expert Marc Amtower in his book Selling to the Government. The primary method of doing this involves running a report called the GSA Schedule Sales Query (SSQ). Amtower estimates that the top five percent of vendors on each GSA Schedule reap somewhere between half and two-thirds of all contracts, while the bottom two-thirds usually share a measly 10 percent. “This provides you with a baseline on the food chain for your niche.”
Tip #5: Get free inside information and contract assistance. There are two key resources a small business owner should connect with to begin their search for government contract business—Procurement Technical Assistance Centers (PTAC) and Offices of Small and Disadvantaged Business Utilization (OSDBU). While PTACs are government-funded, third-party partnerships established to help connect buyers and sellers, OSDBUs are funded and staffed from within each government agency. “The people staffing an OSDBU don’t have any contracts and they don’t have any money,” notes Jolkovski, “but what they do have is lots of information.”
For example, the OSDBU at the federal Department of Transportation (DOT) offers a handy online contact list of procurement assistance specialists, broken down by individual DOT agency. Other OSDBUs, like the one at the federal Department of Labor (DOL), run quarterly Vendor Outreach Sessions, where entrepreneurs can market their capabilities directly to DOL managers in face-to-face meetings. Local PTACs also offer matchmaking events and procurement training seminars to help small businesses.
Tip #6: Tell the government what you can do. To successfully market your small business to government buyers, it’s imperative to create a concise, one-page summary of your company’s qualifications. Known in the contracting world as a Capability Statement (CAPE), this document should include a brief description of a company’s products or services, past industry performance, and staff or leadership. “This CAPE should also be in a pdf or jpg format,” notes Micromentor.org counselor Kenneth Larson, “so it can be quickly attached to an email and then easily opened.” (For more on how to write an effective CAPE and to see some successful, real-life examples, check out Larson’s smalltofeds.com blog on the topic.)
Tip #7: Make it easier for the government to do business with you. Marketing expert Amtower recommends that every small business make its online presence more government contract-friendly by dedicating a separate web page to government purchasing and by accepting payments from the GSA SmartPay credit card. “And don’t forget to include the GSA SmartPay logo on your website, alongside those of other accepted credit cards like MasterCard and Visa,” he adds.
Tip #8: Get clearance to double the size of your potential market. Because more than half of all government contract money is spent on classified projects, Jonkolvski points out that obtaining a security clearance can open up an even wider range of potential new business. To learn more about the process, check out the Defense Security Service’s Facility Clearance Checklist. There, you’ll find an important first step involves being sponsored by either a government agency or another cleared company. (Here’s a copy of a sample sponsorship letter.)
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