Financing Alternatives for Government Contractors

This is a guest post by Richard Lewis, Consultant – Government Contractor Finance, Payroll Finance Division, Sterling National Bank

“While poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second.” – U.S. Small Business Administration, “The Basics”

The good news: Your company has landed a new government contract, one that will result in a significant increase in revenues.

The challenge: In order to fulfill this contract, you must commit to additional people (payroll), training, materials, and related costs. This commitment must be made in advance of receiving payments from your customer (the US Government).

The solution: By planning ahead, you can get a loan from family or friends, use your credit cards, get an equity infusion (very costly and time consuming) or arrange delayed payment to vendors. However, you might negotiate specific terms into your customer agreement to dampen the impact of this challenge (e.g., extended delivery dates, or partial payment upon order placement).

You can also plan ahead in considering your financing options, which can include:

Your existing bank or lender – If your company has an existing line of credit or borrowing arrangement with a bank or other lender, try to negotiate an increase with them. A responsive lender may provide all of the short-term capital needed until the government agency begins payment. Of course there will some repercussions to consider, such as loan covenants or higher interest rates. It’s best to have this conversation as far in advance as possible, and to present a full financing/business plan.

Factoring – This is the sale of your customer invoices (accounts receivable), to a bank or finance company (the “factor”), as opposed to using them as borrowing collateral. The factor will advance a percentage, usually between 75% and 90%, of the invoice amount; the balance is refundable upon receipt of payment, less interest and transaction costs. Some factors may also provide other funding options. The factor will, through the Federal Assignment of Claims provisions, notify the federal government agency customer that the invoice has been financed and is payable directly to them. There are several advantages to factoring; much of the A/R bookkeeping, customer credit worthiness, collections, and credit risk become a shared responsibility with the factor, and the initial approval process can usually be a matter of days.

Although sometimes more costly, it is a viable alternative to traditional bank financing because of its increased flexibility and because the primary credit criteria is based on your government customer, rather than your credit history.

Contract financing/Purchase order financing – You may be able to negotiate financing based upon your federal government customer purchase order(s). Some lenders provide purchase order financing based upon the credit worthiness of your customer (in this case the US Federal Government). PO financing is easiest when your products or services are well established.

A note from Bill: Be aware that financing cost is not “allowable” under DCAA, those costs come straight from your bottom line. But nothing will derail a small business easier than not having the ability to pay the people and get the infrastructure in place. Listen to the experts and get help.

In the next post, we’ll explore four other financing options for federal contractors.

Richard Lewis is a government contractor financing consultant with Sterling National Bank, who offer payroll funding with complete back office support, asset-based lending, factoring and traditional working capital lines of credit, plus complete depository and cash management services. You can contact him at 703-992-8988.


How to Operate as a Prime in a Multiple Award Contract

Congratulations, you’ve won a big IDIQ, where you’re the prime. You got together with a bunch of subcontractors, and now as a group you have won the right to bid on task orders for a given scope or collection of individual agencies.

So here you are, probably with visions of dollar signs, because IDIQ contracts usually have big ceilings. You’re probably thinking, “Send me the revenue!”

Not so fast. Here are seven components you need to understand about operating as a prime in a multiple award contract:

1. Know the customer

As we’ve talked about many, many times, the fish aren’t going to jump in the boat. If you don’t have a relationship with the customer, chances are you won’t get the job.

The exception to this would be contract orders that are based on LPTA or “least price, technically acceptable.”

You also have to understand that you can’t count on your relationship with the contracting officer who issued your contract, because that may or may not be who issues your task orders. In many cases the contracting officers will be in the actual sites that are using this contract to get their work out.

2. Meet with your team regularly

Go over prospective task orders and make an honest assessment of whether you can win. This may be a task order you’ve never seen before, but one of your subcontractors may have a relationship with the customer.

3. Keep up with deal flow and make sure you’re in front of all the potential customers in some fashion

Let’s take a big obvious example like the Navy’s SeaPort-e, an electronic portal where 1,800+ IDIQ multiple award contract holders compete for task orders – 5-25 of which are issued every single day.

SeaPort-e also publish an advanced planning matrix every week, and a source’s sought list (asking for people who might be able to bid) – both of these notices are opportunities to identify a customer you can visit before the task order comes out.

What if you’re a typical small business, without the people available to be at all these agencies at once? This is where your team of subcontractors comes in. If you’ve built it carefully, you’ll have people who can touch all the different organizations that are eligible to use the contract.

As soon as you get one of these notices, find out which of your teammates might know this customer or do this work, and figure out how you can work together. Then you’ll be ready as soon as that task order is issued.

4. Bid when you can win, or when you want to meet the customer

In those cases where you don’t actually know the customer, and so your PWin (“probability of winning”) might be low, you might still want to send in a credible response. Not necessarily because you expect to win, although you always hope you will, but because when you get the debriefing, you have an opportunity to talk to the actual customer and build a relationship for the next task order.

5. Help your partners succeed, or get rid of them

Make sure you’re doing everything you can to work with your partners or teammates to help them succeed. If any of your partners are not responding, participating, or adding value, you need to get those people off your team. As an example, my company TAPE just got added to a contract that’s been in existence for a year, and we’ve been added because we can help that prime win more work (replacing former partners who weren’t helping).

6. Be a good prime, don’t steal the sub’s work

Let’s say you’re in the fortunate position where a sub has a piece of work they’ve been doing and they want to bring it to this contract vehicle. Work that out profitably, but do not take over your sub’s work. I’ve heard countless horror stories from small businesses who were on IDIQ contracts and had their work stolen by a big prime who suddenly took over their customers. It may seem tempting, but don’t do it. Those kinds of hits to your reputation do not go away.

7. Make sure you understand the subcontractor’s financing deal, so they can work profitably

There are many performance risks, but the worst performance risk of all is that the sub cannot pay their own people. Since most small companies aren’t in a position to pay the sub before the customer pays, there’s a further delay to the sub than they would normally experience. Can they wait that long?

Stay tuned for the third post in this three-part series (we started with Prime Versus Sub – A Critical Decision), this time focusing on how to operate as a subcontractor in a multiple award contract. Government contracting has shifted over the last 20-25 years. Today I’d say that probably 70% of service-based business from the federal government goes out via IDIQ or GSA schedules, so you’d better learn how to be a prime and you’d better learn how to be a sub.


Prime Versus Sub – A Critical Decision

There are a lot of factors to consider when deciding whether to bid as a prime contractor or a subcontractor. Let’s do an overview of these, and then in upcoming posts we’ll examine each role separately for some of the particulars.

  1. What is the NAICS code of each company on the bid? For large multiple-award IDIQ contracts that need lots of teaming to fulfill the requirements, the fastest growing companies are most attractive, yet those are also the ones most likely to be affected by any changes to the size standards in a particular NAICS code.
  2. What are the recertification requirements? What size will the company have grown to when it’s time to re-certify, and how will that impact compliance with the size standards?
  3. As a prime contractor, will you have the customer relationships to keep task orders coming? In a multiple-award contract, there’s actually no revenue associated with winning. The revenue comes from task orders that are applied to the vehicle after award, and you have to bid on those task orders as well. So if you’re going to be successful as a prime contractor in a multiple-award contract, you need to have a relationship with the customer base to ensure that there will be a flow of task orders to the contract. The other alternatives are to team with other contractors who have those relationships, and/or to devote marketing and business development resources to priming the task order pump.
  4. Where would you fit as a subcontractor? If you’ve determined you don’t have the resources to make the bid as a prime contractor, then you need to pick a good prime where you can apply your knowledge and capabilities. You must have a clear understanding of the prime’s business model, how they earn revenue, and – most importantly – how they select their subcontractors. Do they select particular companies and let them find the resources to complete the task, or do they ask each company to submit candidates and then the prime chooses the best one to submit with the bid (the “best athlete” approach)?
  5. As a subcontractor, do you have the recruitment methods in place to show that you’re providing the “best athlete”? If not, are you willing to invest in recruiting even if it doesn’t result immediately in revenue? Your first-line customer as a subcontractor is the PM (project manager) of the prime contractor. That’s the person who will be allocating the work, so that’s the person you need to nurture a relationship with.
  6. As a subcontractor, are you prepared to help the prime contractor get the bid? Will you respond quickly to requests for resumes, details about past performance, or technical expertise? With almost all multiple-award contracts, a prime contractor will not bring in a subcontractor to participate in a task unless that sub also participated in the bid for the task order. Regardless of how hard you work to GET the contract, you must still be willing to go the extra mile after award. As well, understand that as a sub, your rates are subject to a subcontractor handling fee and profit from the prime, which means that if the rate to the government is $100, the prime gets $100, but you will probably get somewhere between $85-$95, but never $100.
  7. How might an OCI (organizational conflict of interest) clause affect this bid? As a prime contractor, you are fully subject to OCI clauses, which may disqualify you from future work that follows this contract, because you know too much about that new work. As a subcontractor, on the other hand, you can be “firewalled” off, and therefore won’t be subject to the OCI clause.

We’ll talk more about OCI clauses and other issues in the next blog post in this series, about how to operate as a prime in a multiple-award deal. After that, we’ll address how to operate as a sub.


A Trade Show Alternative for Federal Contractors and Government

In 2013, the federal government has limited travel and canceled many, if not most of the critical “Business to Government” industry trade shows such as Defense Intelligence WorldwideUS Air Trade and Technology Show, Military Health System Conference, Tactical Wheeled Vehicles Event, GSA FedFleet, GovEnergy, SmartPay and GSA Training Expositions.*

Eileen Kent of Custom Keynotes, one of our guest bloggers, has come up with an innovative potential solution that could bring business and government together in local settings on a regular basis. She calls these gatherings “Industry Solution Jams,” and is encouraging industry associations, SBA, PTACs, Chambers of Commerce and local businesses to consider hosting one of these events.

This solution is a cost-effective way for industry and government to discuss new ideas and present case studies and innovations, and for project managers who are stuck on a problem to see how the marketplace is solving similar problems. “There is talent right outside the federal buildings and bases,” notes Eileen, “but the federal customers don’t have time or the tools (or the budget) to seek new solutions.” An Industry Solutions Jam gives these PMs the opportunity to meet new subject matter experts in a neutral setting.

Eileen also points out that the Federal Government’s FAR (Federal Acquisition Regulation) 15.201 notes that, “Exchanges of information among all interested parties, from the earliest identification of a requirement through the receipt of proposals, are encouraged.” These events fulfill this type of communication and help the Government obtain quality supplies at reasonable prices, and increase the efficiency of the contracting process.

As a first step towards an ISJ, Eileen recommends surveying the PMs and other end users inside the agency to find out their current challenges, e.g., sustainability, LEED certification, IT and cyber security, etc.

Next, she suggests establishing a  facilitator (could be an outside professional, if no one “inside” can assume this duty) to moderate and host the two-hour event, and to publicize an invitation to businesses from within the region who have case studies that prove their solutions for these particular challenges, or who just want to mix and network.

The facilitator, along with the hosting agency and presenting companies, will forward invitations to the small business offices of all nearby agencies, the prime contractors working onsite, local Procurement Technical Assistance Centers and the project managers who may benefit from the topics being presented. Area regional directors and base commanders should be invited as well.

Room rental, food and beverage, and IT costs can all be covered through sponsorship, rendering this a no-cost solution for the agency. Potential sponsors could be small business contractors and advocates, prime contractors, individual facilitators, contractor associations, SBA, PTACs and local Chambers of Commerce –  a third-party association/facilitator or Chamber who can bring together both sides of the equation.

An Industry Solutions Jam would have positive benefits for everyone involved:

  • Small and local businesses have exposure to their local federal customers without travel expenses
  • Agency Small Business Officers will have the ability to meet new local businesses ultimately meeting mandated small business goals
  • Prime Small Business Officers will have exposure to new innovations and potential sub-contractors, who can help them meet their mandated small business goals
  • The government could save time and money by investing in a local innovation that is discovered at the event

For more of Eileen’s insights into the federal contracting scene, please see her earlier blog posts here at The Fish Don’t Jump in the Boat:

Federal Customers Say the Darnedest Things
Cold Calling the Federal Government
Develop a Sales Strategy Now – Before the Summer Federal Feeding Frenzy Begins


Biggest Gaps in Small Business Report Cards

After I posted this article about Bill H.R. 3850, the Government Efficiency Through Small Business Contracting Act of 2012, someone from a LinkedIn group asked, “Do you have any idea as to which departments have the biggest gaps to fill in relation to meeting small business goals?”

For the answer I went to Nick Pontius and his colleagues at GovWin (Deltek), who pointed me towards their free report SBA 2011 Small Business Goaling Report Analysis.

We already knew that Energy got an F on their scorecard of meeting the requirement to award 23% of contracts to small businesses. According to the GovWin report, the top 5 lagging agencies were:

  • Dept. of Homeland Security (awarded 3.8% less to small business contractors in 2011)
  • Dept. of Veterans Affairs (4.25% less)
  • Dept. of Defense (4.5% less)
  • Dept. of Justice (5.67% less)
  • Dept. of Energy (awarded a whopping 35% less to small businesses in 2010 than they did in 2011)

Let’s look more closely at why it’s been a problem for Defense and Energy, in particular, to meet their set-aside requirements. With the Dept. of Defense’s weapons program, the issue is that small businesses don’t typically manufacture weapons (although they do manufacture parts and sometimes specialty items).

Small businesses usually don’t run national energy labs either, those are left to big companies such as Sandia. When those labs are competed, that takes a big chunk of the Energy contracting budget, and thereby skews the percentage awarded to small businesses as the prime contractor.

So when departments have big program like this, they’re competed amongst big companies. Even if smaller companies are involved as sub-contractors, those do not count against their set-aside requirements.

And the converse is true – big businesses don’t even report their small business sub-contracting performance, and in fact many simply ignore the requirement, except when bidding. EVERY small business I’ve EVER met has a story about a contract they pinned their hopes on, which the big business won, but the small business got zero revenue from. (See my blog post, “Large Businesses Want Appliances, Not Sub-Contractors.”)

In a sense, the whole government has failed to meet the 23% goal. Why is this relevant? Well, in the 2013 National Defense Authorization Act, meeting these goals was tied more closely to senior executives in the agencies getting their performance and merit increases. This is a striking change, as small business goals have never been a critical issue, even though it was included in the old National Performance Review from back in the days of Al Gore’s Vice Presidency.

The current administration has made some legislative changes that hold the promise that SB goals and execution will be important and actually measured. But it’s just that, a promise, and we’ll need to see actions backing the promise.


Will FSSI Stop Small Business Federal Contractors Before They Start?

After I posted a link to my little story about starting up as a federal government contractor, there was a flurry of activity on one of my LinkedIn groups, the Federal Government Contractor Network. It centered around something called FSSI.

FSSI stands for Federal Strategic Sourcing Initiative, and was designed by the GSA to streamline the government’s purchasing process across multiple government agencies, in order to increase efficiency and save costs.

Currently, there are strategic sourcing solutions in place for wireless telecommunications, office supplies, express and ground domestic delivery services, print management, and computer software, with more to come. In the LinkedIn discussion, Professor Samuel Bornstein put out some of the numbers:

OMB and GSA expects to implement an additional 10 FSSIs in FY2013. GSA is about to release its FSSI for Janitorial and Sanitation Products & Maintenance, Repair and Operations Products (JanSan & MRO). From an existing list of 6,461 JanSan & MRO contractors, only a “select few” will be the winners, as Blanket Purchase Agreements (BPAs) are awarded. In the previous FSSI for Schedule 75 Office Supplies, there were only 15 BPAs awarded out of 569 contractors. We can presume that there will be many losers in the FSSI for JanSan & MRO, and many new small business federal contractors will not be able to sell to the government. As OFFP’s Joe Jordan recently stated, “Not all who want to sell to the government can sell to the government.”

Another commenter warned, “The days of visiting a local contract office and building a long-term business relationship based on knowledge and first-class service and knowledge may be gone for good.”

Is it all bad news for federal contractors? So here’s what we know – first of all, in a conversation with a procurement head for a medium-sized agency, I was told that FSSI caused her some problems at first, then when it stopped working altogether (presumably because the BPA holders weren’t building those relationships we’ve been discussing), the agency simply went and filed an exception. No more FSSI.

This is why maintaining your relationships is the critical issue. I can’t begin to tell you how many times in my 30 years of doing this, an agency winked and nodded and said, “Those XYZ guys do real good work for us,” making it real easy for us. We made XYZ a subcontractor, and voilà, our relationship as the prime contractor was immediately solidified.

Or an agency just ignored all the folderol as one more swing of the pendulum, and contracted using another vehicle we were on – being the company they have a relationship with, and again, problem solved.

FSSI will save some money. It will help GSA reduce cost. It will not be as friendly to small business as the open Schedules. And then the pendulum will swing, and FSSI will disappear or morph into something more friendly, reversing these unintended effects.


Federal Customers Say the Darnedest Things

Eileen Kent, our federal sales sherpa, told us, “When I was at a trade show in 2010, I was sitting at a breakout session and I overheard two federal contracting specialists behind me discussing a large procurement. One CO said to the other, “I really would rather not put that out on FBO (fedbizopps.gov, the public bidding website), because it creates too much noise.”

Steer clear of the noise

What do you think they meant by ‘noise’? Kent believes it meant a variety of things:

  • “Noise could be their phones ringing off the hook from vendors who know nothing about federal contracting, but have a thousand questions about the bid.
  • Noise could be all the rustling of paper and unpacking of hundreds of responses – from vendors who don’t have the qualifications, but they have to consider nonetheless.
  • Noise could be all the angry losers protesting the winning bid and holding up the project.

 If I were in contracting, I’d want to eliminate the noise too – wouldn’t you? That’s why there are GSA Schedules, IDIQs, BPAs, and sole source contracting vehicles to avoid the public bid process.”

Become a known angel

Another great quote Kent heard while in the field was, “We’d rather do business with a known devil than an unknown angel.”

“Basically,” she explained, “They were telling me that even though I could prove my service was better, they didn’t know me. They would rather stick with the company they know, with all their quirks, than risk their project on a newbie – no matter how good I was in the commercial world. So I needed to start to become a known angel to these federal clients.”

How do you become a known angel? Kent advises to:

  • “Stay in front of the federal client and help them with issues that are too small for the incumbent to even notice or care.
  • Be willing to refer a partner who is an absolute subject matter expert on areas you are not. It’s better to pass on a project that doesn’t fit than to try to dance around an issue. If you don’t perform perfectly, it will reflect on the client’s record, so only work on projects that are in your wheelhouse.
  • Always deliver perfectly and on time.

Eventually, they’ll put your phone number on their speed dial, and they’ll start to call you for more and more tasks. In a year or two, you could be kicking the incumbent out. Now you’re the known angel.”

Know – or hire – your competitor

While on a military base, Eileen heard a fellow cold-calling contractor tell the CO that his father had served. “We like to take care of our own,” was the response.

  • “Hire a vet if you plan to sell to the military, it’s as simple as that.
  • In this industry, it is very possible that your competitor legally hired a retired employee and it’s been past the employee’s official waiting period and they’re able to sell for your competitor – back to the agency. This is a reality of the business, so be prepared to out-perform them, go sell to a different agency, recruit that retired employee, or build a teaming arrangement with your competitor.”

Speak up as soon as problems arise

“Problems don’t age well like fine wine, tell us about them immediately,” a project manager once said to Kent. This was a great piece of advice, as federal project managers would rather work beside you to solve a problem then be surprised by a problem you knew about for a while but could not resolve without their help.

The key to landing the work

Kent’s most favorite quote comes from a retired CO who had a say in developing some of the acquisition rules during her 35-year career. This retired executive attended one of Kent’s federal sales classes and told the class, “Unless they know, trust and love you, they are not going to work with you.”

Kent’s response? “Class dismissed.”

Eileen Kent has trained over 10,000 in federal sales, proposals and GSA Schedule Contracting. Her woman-owned small business has helped organizations win tens of millions in federal contracts, through teaching federal sales strategies one-on-one and in team training. For more information, call 312-636-5381 or connect with Eileen on LinkedIn (http://www.linkedin.com/pub/eileen-kent/1/a48/a80). 


Cold Calling the Federal Government

According to Eileen Kent, the Federal Sales Sherpa, “Everyone has a fair and open opportunity – to make a phone call – the rest is all about relationships.”

Many executives selling to the federal government believe that cold calling is the wrong approach to opening doors to new opportunities.

“Of course we all wish we could be referred into the ideal opportunity within the federal government, but that’s not always realistic,” says Eileen Kent. “Therefore, at some point, when all contacts, partners and customers’ referrals are exhausted, a federal sales executive is going to have to have to pick up the phone and make a cold call or two hundred.”

What is the key approach to selling to the feds? Kent says the approach should be a “hat in hand,” subtle approach of asking questions, listening and learning – not selling.

“When I’m selling to the feds, I’m looking for the key end-user on the inside who requires my product or service to complete their mission. For example, if I’m selling furniture, roofing or construction, I’m going to call on the facility manager, the property manager and the sustainability officer. If I’m selling software, I’m going to try to locate the CIO, the IT Director or the IT Security Officer,” says Kent.

“My approach is simple. I ask whomever answers the phone, ‘I was wondering if you could point me in the right direction – I’m looking for the person who handles……’ and the person who answers the phone 99% of the time helps me find my contact.”

When you get your key contact on the phone, tell them you are new to their agency, but you’re not new to the industry and you are here to help them look good. (Note from Bill: Start off by mentioning that you were referred by the first person you spoke to. Now it’s not a cold call at all!)

Then, Eileen suggests you continue with, “I have some industry intel (whitepapers/capabilities briefings/training programs) that you may find interesting for your next project. But before I do that, I have a couple of questions so I understand your role at the agency……..” Most end users, Kent says, are happy to endure a few basic questions regarding their role, their vendor who currently supplies similar products and services, and how they found that vendor.

From there you can ask the subtle question, “How is it going with ____(competitor name)_____?” Your hope is they share with you all the good, the bad, and the ugly. At first they’ll share the good but they always dish on their known devil – the incumbent.

Kent calls this the wedge issue. “Once you find a crack in the cemented relationship your new client has with the incumbent, wedge in with a solution to the crack, and then tap, tap, tap with a cost-effective solution.” As you fix more of these small fissures – breaks – in the fed’s relationship with the incumbent, eventually the client will start calling you for more and more tasks.

The ultimate goal is to unseat the incumbent, but that is something that happens slowly over time. You need to build the relationship and move it carefully. Your first call is the introduction. Your second call is delivering a capabilities statement. Your third call might be a possible capabilities briefing/webinar.

Your fourth call addresses a need. Your fifth call provides a suggested solution/white paper/recommendation/idea. Call six through eleven are for follow up. Call number 12 is a bid and then wait, wait, wait, wait and WIN! Federal sales opportunities take 12 to 24 months, just like courting someone for marriage. Take it slowly and steady and you will eventually win.

Every conversation starts with an introduction that feels cold, but as soon as the formal intros are done, it’s no longer cold. Find something in common and ask them for help. (Note from Bill: Talking about anything, from the weather to the big game, warms up a call at least from cold to neutral.) The federal employees work for you and they’re happy to help.

Kent says, “I have never had someone in the government behave rudely toward me and I have cold called in DC, Chicago, Atlanta, Dallas, Denver, Los Angeles, Las Vegas, San Francisco and San Diego for the past 12 years. They may be short because they don’t know me yet, or they’re shy because they don’t know whether or not I’m a nutcase, but once I set their mind at ease that I’m new and need a little help, they always point me in the right direction, which in time leads to a win.”

Eileen Kent has trained over 10,000 in federal sales, proposals and GSA Schedule Contracting. Her woman-owned small business has helped organizations win tens of millions in federal contracts, through teaching federal sales strategies one-on-one and in team training. For more information, call 312-636-5381 or connect with Eileen on LinkedIn (http://www.linkedin.com/pub/eileen-kent/1/a48/a80). 


Develop A Sales Strategy Now – Before the Summer Federal Feeding Frenzy Begins

“Repair your boat, prepare your map, update your tackle and cast your nets!”

That’s the message from federal sales strategist Eileen Kent. She says that during this time of sequestration and possible federal employee furloughs, federal contractors are becoming more and more disenchanted with selling to the federal government in 2013. Primes are cutting back on their sales teams, their proposal efforts, their capture management and their project management teams.

Basically, they’re pulling up their nets and leaving the industry – for opportunities they believe are open in another marketplace altogether.

“This is the perfect opportunity for new vendors to enter the federal marketplace,” says Eileen. “While the primes struggle with losing their contracts, cutting their project teams and letting people go, new contractors should be strategizing and focusing on new ways to support the government in its goal to streamline business processes and saving money.  It’s time to get out there and start casting your nets.”

How do new businesses position themselves to win federal contracts?

Kent says, “As a federal sales sherpa or guide, the first thing I do is look at a company’s direct competition. How much business are they doing with the feds, what agencies are buying from them, how much and with what contracting vehicles? This intelligence is vital to finding where the fish are biting. Despite what you read in the news, they are, in fact biting.”

The second step is to train the company’s ownership and management team, along with the sales executives, on how to fish for leads and opportunities. “The info is out there, you just need to know where to look,” says Eileen. “Most guides won’t show you their secrets, but I will.”

There are many public classes offered by PTACs and the SBA and a variety of federal marketing companies, including Eileen. These can help the entire team understand federal key decision makers, critical terminology, and methods of opening doors and closing deals, quickly and quietly. The goal is to build long-lasting relationships inside the government and close deals that are “under the surface.”

The third step is to build a federal sales action plan, which includes a focused list of agencies based on the competitive analysis, who to contact and with whom to partner. This federal sales action plan must require the sales team to report their results and their contact conversations weekly so the management can track the legacy of every relationship and help steer the sales (boat) toward fertile waters.

“This is not rocket science,” says Kent. “Like fishing, it takes patience, persistence and perseverance, but it also requires a guide who can tell you where all the fish are hiding. It also  takes a good size boat to handle the rough waters and times when the fish are all biting at the same time.”

When will the fish bite? “From June until September, 2013, it’ll be a feeding frenzy because agencies still have to spend the 2013 budget – so the time to prepare and strengthen your nets, equipment, maps, team and relationships – is NOW.”

Don’t sit on the riverbank watching FBO.gov waiting for opportunities and complaining when you lose.  As Eileen and I both say, “The fish don’t jump in the boat!”

Eileen Kent has trained over 10,000 in federal sales, proposals and GSA Schedule Contracting. Her woman-owned small business has helped organizations win tens of millions in federal contracts, through teaching federal sales strategies one-on-one and in team training. For more information, call 312-636-5381 or connect with Eileen on LinkedIn


A Little Story About Starting Up

A family friend – who is a service-disabled veteran – recently called to discuss his idea for a potential business. Louisa and I get these kinds of calls all the time, and are happy to hear people out and offer a little advice.

What happened on this call is what happens 99.9% of the time. We told him, “Yes, you have a good idea. Now you have to do the work.” For example, his business needs a corporate structure. There are plenty of ways to put that in place. We sent him to an online resource that does this for a nominal fee. He also needs to get registered in what used to be CCR and is now SAM.

(The SAM website (System for Award Management) has consolidated the registration tools at CCR/FedReg, ORCA, and EPLS. To find out how to register your business in SAM, check out the podcast and presentation put together by my friends at WIPP (Women in Public Policy).)

His idea involved a particular government agency, and he already had preliminary conversations with the PTAC, as well as the agency’s small business office and diversity officer. That’s great, but now he needs to go back to all those parties to touch base, find out what and who they know, and see if they can help him meet the right people.

Next, he’s already got his personal service disability status taken care of, but he doesn’t yet have the certification that his business is majority-owned and operated by a service-disabled veteran. In order to keep fraud from occurring (as it did in the early days when businesses were self-certified), the government regulates these things with a detailed certification process.

Of course all of these things take time. And meanwhile, time’s a-wasting on his good idea. So we suggested that while he’s pursuing his good idea, he should get these other pieces in place. One action we suggested right away was that he register for the agency’s schedules so that they can order his idea more easily.

The point is, it’s not enough to have a good idea. You’ve got to have the discipline and the  entrepreneurial “stick-to-it-ness” that will make that government agency say, “Yes, you have a good idea,” AND, “I’ll order it!”

Hopefully as this fellow goes along I’ll be able to report back to you on what he’s doing and we can take instruction from his experience.