Since your OSDBU reviews all opportunities (trying to make sure things get set aside for small business whenever truly feasible), they can help you identify the proper NAICS code associated with each RFP and the size standard that goes with it.
That is key, because if there’s a contract coming up for competition in a size standard you’re too big for, then having it set aside for small business in that NAICS code does you no good.
Many professional and even administrative services opportunities are run under larger NAICS codes, but if the statement of work is defined as mainly IT work, a sub-set of admin services, that can fit under a smaller size standard that you may qualify for.
By meeting with your OSDBU staff – especially the one for your designated set-aside type, if more than just a “small” business, you can better understand how both the contracting officer and the customer are seeing and classifying the preponderance of the work.
Both parties have decision making authority, but the OSDBU small business person can influence that decision. Ultimately you want the set aside to be in a NAICS code and size standard where you can do the work.
As we’ve discussed, OSDBU’s don’t have any money for you; rather, they serve as a resource, advocate and administrator of the federal contracting small business set-aside process.
(For a clear look at what your OSDBU will and will not do for you as a small business federal contractor, see this list of best practices developed by the Federal OSDBU Directors Interagency Council.)
The reason small businesses need an advocate is because when choosing contractors, government officials see large businesses as safer alternatives then small businesses.
In a perfect circumstance, the statement of work and evaluation criteria of an RFP would be written as if you were the only competitor, or even better, as if you were the only one who could qualify as a competitor.
Even though you want no competition in an RFP, the government wants the opposite. They want to establish that there will be competition – before setting aside a contract for a small business or a specially-certified small business, they want to know that there are multiple qualified resources in that set-aside category.
By meeting regularly with your OSDBU person to review current and upcoming RFPs, you can inform them when this is the case. You can build a case for whether the contract should be set aside for a woman-owned business, a veteran-owned business, a service-disabled veteran owned business, a HUBZone business, an 8(a) business, or a general small business.
Armed with that knowledge, then your OSDBU person can steer the federal agency towards setting aside that contract.
This is a guest post by Richard Lewis, Financial Engineering Counselors, Ltd.
Securing the financing you need to grow your small business can be a challenge. Over the past decade, banks have increased lending to big business by 36%, but over the same period, bank lending to small businesses has declined by almost 15%, and loans of less than $100,000 have dropped precipitously by more than 33%.
Fortunately, small businesses can find alternative financing sources, including a Small Business Administration (SBA) loan. There are several different types of SBA loans, including:
- The General Small Business Loan,
- The Micro Loan,
- Real Estate and Equipment Loans, and
- Disaster Loans
Be sure to check which type of loan is right for your needs before beginning the application process.
SBA loans have been around for more than 60 years. These loans, which were established to promote small business growth, typically have lower interest rates and monthly loan payments.
Unfortunately, the process of applying for an SBA loan can be complicated and it can take a long time to complete the process. Once you do, there can also be an extended period of time before you actually obtain your funding. You can speed up the approval process by observing some simple guidelines. Here are five you need to be aware of:
- Your credit rating counts: Good credit is important for any loan, and that includes SBA loans. Follow good credit rules, like being sure to pay your bills before the deadlines. Obviously, you’ll want to avoid credit-killing actions like foreclosures and bankruptcies.
- Keep your financial documents up to date and organized: This includes all of your financial and accounting documents, as well as your tax records. You might consider using some good accounting software designed for small business if you don’t already to bring greater organization to your records. Having your financial records organized and accessible will move the process along more quickly.
- Spell out the purpose of the loan as clearly as possible: Lenders want to know that you’re a good loan risk, and that means they’ll be interested in what you plan to do with the money. Take the time to outline this in the clearest possible fashion, whether your loan is to add vehicles to your sales fleet or expand the size of your brick and mortar store.
- Explain how you’ll pay back the loan: You’ll need to demonstrate that you have good cash flow. You can do this through your most recent tax records. Lenders will also want to know how much other debt you have. If the loan is for a start-up business, you should pull together a smart financial plan and include credible projections which demonstrate your ability to make your monthly payments.
- Be prepared to describe your history: Lenders will want to know about your finances, but they’ll also be interested in whether you personally are a good risk. That has to do with your relevant experience, how much time you’ve been in business and the degree of professional success you’ve had.
Applying for any loan, whether traditional or through alternative financing, can be confusing. The good news is that there are experienced professionals who can walk you through the process, answer your questions and maximize your chances of success through long-standing partnerships with banks, finance companies and professional service firms.
This post originally appeared on the Financial Engineering Counselors website at http://www.fecltd.net/blog/?p=102 and was reprinted with permission.
Richard Lewis is a government contractor financing consultant. You can contact him at 703-992-8988.
This is a guest post by Eileen Kent, The Federal Sales Sherpa
A federal sales hunter scans the landscape daily with his own eyes and locates where the most potential for healthy-sized opportunities appear.
The hunter has been trained by other hunters to seize the moment when an opportunity arises.
The hunter approaches the client on a regular basis, and, when the ideal opportunity presents itself, the hunter “captures it” with a closing mechanism like a GSA Schedule, small business preference, or partner. No one ever heard about the opportunity coming, and never found out when the deal was closed and delivered.
We can only see it after-the-fact in the contract data – exactly how the hunter quickly captured the deal.
A federal sales vulture sits on the sidelines and waits for a lucky opportunity to come out on the public websites like fedbizops.gov.
But, by the time the opportunity “dies,” there’s nothing left in profits but a few scraps – and a lot of other angry vultures still fighting with you for the leftovers.
Look, we all have a little “hunter” and a little “vulture” in us.
A note from Bill:
This is sort of like being a little bit country, a little bit rock and roll (yes, I did like Donnie and Marie), and by the way, both strategies need to be applied judiciously. The hunter lands more of what they go after, because the capture is good, and the customer is ready. But, the vulture can get some tasty scraps in these days of LPTA. At TAPE we do have a scanning process (by vehicle, not FedBizOpps), where we look for the following:
- Know the function absolutely cold, with good past performance.
- Make sure the labor hours are specified. If they want you to guess or figure it out, you’re not going to win.
- Write a good, highly compliant response. Check everything to make sure there are no issues, this is critical because…
- Price that baby low, low, low. Profitable, but low.
Many years ago, I asked a big company, one respected for really doing good capture work, how they treated year end. They were candid, and said they like 2/3 of the work to be captured, but 1/3 will be over the transom, with good past performance, nearest customer neighbor, low price. They won a lot of them (well, great proposal shops can write to anything), and it fueled growth.
Our hunter side has found out from the client that the deal is “coming out soon” and then we want to sit tight like the vulture…… waiting …. waiting…waiting for it to be posted.
But it is advised that while you’re waiting for the postings at fedbizops.gov and end-of-year spending, that you still could be a hunter by continuing to scan the landscape and talk to all of your clients about opportunities now – and in the future. If the opportunity has not hit the streets yet, you may still be able to do something to get them to make it a set-aside or to use a contract vehicle with little competition.
And in the coming year, you want to change your tactics to be more like a hunter all the time….or hire a hunter to comb the landscape, get to your customers in the field, and close the deals quickly and quietly.
For more information about having a federal sales action plan built for you so you can focus on the “hunt,” contact Eileen Kent at 312-636-5381 or visit http://federalsalessherpa.com/.
This post originally appeared at https://www.linkedin.com/pulse/article/20140812023632-5572608-in-federal-sales-are-you-a-hunter-or-a-vulture and was adapted and reprinted with permission.
When TAPE was first founded, my wife (CEO/President Louisa Jaffe) and I were sitting around with not much to do because we were just getting started. So we volunteered with the local chapter of AFCEA (Armed Forces Communications and Electronics Association) to lead their small business program. We were a small business ourselves, so this made logical sense.
Now it did take a little time, to find speakers for the various small business programs, and coordinate to make sure everything went well. But in return, we got incredible business development opportunities.
First of all, we were able to reach out to actual potential customers, and other folks in the local government community, to invite them as speakers. These were no cold calls, but we were still making valuable connections!
Second of all, we always got two free passes to attend the events. That meant one of us could be in the small business program, while the other could be with the “big boys” in the other room – a free networking opportunity.
More than 10 years later, and hardly with much spare time to sit around, we’re still getting involved and we’re still making important connections through those efforts. Louisa, for example, is on the board of the Army Women’s Foundation where she meets all sorts of retired army women now working in the contracting industry.
Down here in Orlando where I’m working with a company we acquired last year, I have been volunteering for a source selection improvement group – an industry/government partner group looking at problems in the source selection process.
This has given me the chance to meet a bunch of people I would have never met otherwise – contracting officers and other companies doing business in the same realm as our Orlando division – and work together to solve problems that affect us all.
These are two very good things, and all it costs is some time.
So get involved – there are government panels, committees putting on networking events, and many other options. You’ll be immersed into the contracting community and as you’ve heard me say many times:
There is business to be found through building relationships.
When you’re recruiting to fill a position as part of an RFP, compliance is a hugely important issue. The candidate must meet the government’s specific criteria for experience, technical skills and certifications to a T.
Believe it or not, I once had a resume rejected for an RFP because the candidate listed their experience with PC DOS, and the RFP had asked for experience with MS-DOS. (They’re one and the same thing.)
It’s absurd, but these things happen. There is no such thing as close enough. You have to remember that the government is not going to interpret, they’re going to measure you against the exact requirement that’s down on paper.
After compliance, it’s time to think about profitability. When you’re hiring for an RFP, you’re not just filling a job within your organization, you’re filling a job that will be billable to your customer. You have to understand what the billing rate translates to in terms of your bottom line, so you determine an appropriate salary.
During the bidding process, you have to first figure out whether you’re in a cost-sensitive environment or not. I wrote about how to compete on price with your salaries in an LPTA environment in a previous post.
You should also consult salary surveys for that particular discipline, to compare other salaries and contract terms. Pay attention also to what your current employees are making, so you don’t anger them and poison your work culture by hiring a bunch of new people at a higher rate.
Finding the right people
These days hardly anyone is using the newspaper to find a job. You have to be in the places job seekers are looking, namely LinkedIn and other social media, and online job boards like Monster.com. For very specialized requirements, you may want to do an insert in a technical association newsletter or an industry magazine.
What are your best recruiting tips for government contracting? Share them as a comment below, or on my LinkedIn post.
In this era of LPTA (Lowest Price Technically Acceptable), there are many more times that you might want to bid on something, even though you’ve done no capture or relationship-building work. And the end of fiscal year is a perfect time to take a look at the circumstances in which you might want to throw a bid “over the transom.”
When to bid
- First of all, does the request for proposal indicate that you need secret knowledge to win? For example, do they want a bunch of resumes, many of them for key positions, or do they just give general staffing requirements?
- Are they looking to see past performance that’s specific to their work, or can you show work you’ve done elsewhere that may have the same size, complexity and scope?
- Is there a big emphasis on price? (The more emphasis on price, the less likely the incumbent has an advantage.)
- Finally, how big is the proposal to write, in particular, the technical and management responses? A smaller proposal has less evaluation or subjectivity in play, and less favors the incumbent.
If there are few or no resumes required, if generally applicable past performance is permitted, and if response time is at least two weeks, these are signs you may want to go ahead and consider a bid.
Conversely, run in the opposite direction if a response is required in three days or less. That bid is wired for somebody else. Maybe not the incumbent, but someone. If that somebody is you, by all means get your proposal in, but if it’s not, there’s no reason to waste your time.
How to compete on price
When you’re competing on price, it’s no longer business as usual. You’ve got to understand what is your wrap rate, and what is the wrap rate of your most likely competitors.
The wrap rate is what you add on top of the salaries or hourly rate of the people in your bid. You’ll add a percentage for fringe, a percentage for overhead – costs directly related to the accomplishment of a job, but which are not billable – and then “G&A” (general and administrative). Plus, profit, of course.
For example, if an employee is sitting at your office but their time is billable to your customer, then you would add that portion of rent, their use of computer, etc. because these things are directly related to project rather than for general work in your company.
You would also add a portion for what is called G&A, or general & administrative. This includes costs like your HR department, accounting people, leadership time that is not billable to the customer, and marketing staff.
On top of those amounts, you put a profit. There are formulas you can use to determine your wrap rate, but typically they’re anywhere from 1.5 to 2.5 (expressed in terms of 1.5 (up to 2.5) times the base hourly salary rate). So for someone who’s salary is $100,000, you would charge $150,000 or $250,000 to the government agency.
The bottom line is that if you’re competing on price, you’d better get your wrap rate down. That might mean shaving benefits, but that hurts hiring. The easiest places to cut are your G&A by operating leaner and less fixed charges, and of course, profit. Sadly. Also, don’t hesitate to reduce escalation (a clause that protects you against higher material prices) in short-term contracts; it’s an area where competition might not think about reductions.
Being selected for a bid in a year-end cycle can bring you great revenue. Even if you haven’t done the capture work, use the criteria I’ve outlined above and when appropriate, you can take a chance without the advance work usually required!
This is a guest post by Kevin Jans of Skyway Acquisition Solutions.
Fishing with a cast net here in Florida is fun. In the right place, at the right time of day (and tide), the net is full of surprises: bait fish, a crab or two, a stingray, or even a mullet.
However, cast-netting is a futile and costly way to gain sales – especially as a small business in the Federal market. At best, you’ll stumble upon a few opportunities. At worst, you’ll catch a net full of unqualified leads. Most likely, you’ll end up somewhere in between: spending a lot of time sifting through RFPs hoping to find one that fits your company.
Targeting opportunities is just as important in the federal market as it is in the commercial market. History shows time and time again that a focused strategy wins. In the government market, it can be easy to feel like you are drowning in opportunity. Targeting your efforts is one of the best ways to offset this.
Do you know, really know, what you are fishing for? Why do you target specific agencies? Why are you investing your time on specific RFPs and RFIs? This is not about bid/no bid – this is about deciding whether you should be looking at an agency’s RFPs at all. Or, whether you should be in the Federal market at all. What is your plan? What is your target? What are you trying to catch?
Are you filtering opportunities by NAICS, size of opportunity, and socio-economic set-asides? So is everyone else. What if you fine tuned your search beyond the agency? To a division? To a contracting office? To a specific customer who buys a lot of what you sell? What if you knew that the buyer you targeted actually needed your help and would be excited to know about your company? What if you targeted your efforts to the point that the government customers are calling you to make sure you bid on their RFP? That’s what real targeting looks like.
Save your company time: do not fish with a net.
This post originally appeared on the Skyway Acquisition Solutions blog at http://skywayacquisition.com/targeting-government-rfps-fish-net/, and was reprinted with permission.
Kevin Jans founded Skyway after 16 years as a Department of Defense Contracting Officer (CO). As a CO, he saw many companies struggling in the B2G market. He created Skyway to give these small to mid-size companies access to a leadership team of former contracting officers and to show them how to compete and WIN in the increasingly complex market. Learn more at http://skywayacquisition.com/.
Terry Budge is the president and owner of Interlinked Resources LLC. He retired from the U.S. Small Business Administration after a 34-year career with the Federal Government. At SBA, he worked with everyone from start-ups to major corporations that are still considered small. He also worked with large prime contractors, as the auditor that reviewed their business plans to meet diversity goals.
With IRG, Terry continues to advise large businesses on how to make sure they’re giving a percentage of their subcontracting work to small and specially certified businesses. He also works closely with small businesses to help them work successfully with government activities. I thought he would have great insights for small businesses who are hoping to fill those needs.
What is the first thing a small business should do if they want to do business with the Federal Government?
There are some key issues to review. The first is how new is your business? If you are within two years of startup, then you should be working closely with the Small Business Development Centers (SBDCs) in your local area. If more than two years, then go to your local Procurement Technical Assistance Center (PTAC). Both of these organizations can get you started to work with the Government and they are free. You can find them via the Small Business Administration (SBA) website.
Next, register your firm on the Systems Award Management (SAM) site at www.sam.gov. Through your PTAC contact, get a listing of federal agencies and find out which agency may have a need for your service or product. Once you have this, go to the Small Business Offices (OSDBUs) of these agencies for advice on how to deal with that particular agency. Also, seek advice from a competitor or other business that is very active in government contracting.
What is the most important step that most businesses miss?
Not being prepared to deal with the federal agency or a prime contractor before they try and bid a job. They don’t have a “Capabilities Sheet” ready and have not listed their business under the Dynamic Small Business area at www.sam.gov.
They have not done what we call going on a “fact-finding mission” to research each client to see what they need in order to qualify to do business. Start talking to these agencies before trying to bid a job. You must understand all the requirements of a government solicitation, and know that your business can meet these requirements.
What do prime contractors wish more small businesses would do?
Be prepared before coming to them to get work. Pick a prime, then go to the prime and discuss their requirements before asking for a contract (another fact-finding mission). Let them do some mentoring or provide you with guidance. Establish a relationship after you insure that they may have work for you now or in the future.
How can small businesses communicate their value to prime contractors?
Research the prime contractor first via their website and your local PTAC. Look at the types of contracts that the prime has; understand what the firm does. From that understanding, develop a good “Capabilities Sheet” on your firm, with expanded details on your company website and available as a PDF file. Always use a professional company e-mail address. Most primes will not even give you consideration if they see an address from @hotmail.com or @yahoo.com.
Give good references from other businesses you have current or past contracts with. If you cannot do this, go back to the prime and find out what is needed to deal with them either now or in the future. Be persistent. When you have prepared all the prime’s requirements, start a follow-up process through phone and email. The squeaky wheel gets the oil. Polite follow-ups keep your business on their radar.
What are the top three benefits of working as a subcontractor rather than directly for the client (federal agency)?
- You will find it easier to communicate with a prime buyer than with a government entity, and requirements like pre- and post-award surveys, FAR requirements in the contracts, and pay system requirements will usually be less onerous.
- The prime contractor usually has flow-down requirements that are passed down to the small business – contract requirements that may also be levied to you. If you have a good relationship with the contractor, you will learn about other available government contract requirements.
- Once you start getting a track record with dealing with several primes, it certainly helps as a reference when dealing with the Government. Your experience with these prime contracts should be listed in the Dynamic Small Business area of www.sam.gov when you register and keep it updated each year.
Terry can be reached at 267-549-4689 or http://www.irgroup.net.
This article originally appeared on The Chief Visionary’s Blog of The American Small Business Coalition, LLC, and was reprinted with permission.
(This is the first of six reports based on a conversation with Amy Morris, Morning Anchor at WNEW All News 99.1 (CBS Radio DC) These reports will also ‘air’ on All News 99.1.)
Once upon a time, the U.S. Government developed a way to streamline how it makes certain buys in a way that reduced the administrative burden for both agencies and vendors. But they didn’t stop there. Also built-in to this process was a way for agencies to increase business opportunities for small and disadvantaged business concerns in government contracting. Known as the ‘Simplified Acquisition Procedures,’ this procurement method accounts for billions of dollars in competitive and non-competitive obligations each fiscal year.
But while many in industry bid on and are awarded buys this way every day, most don’t realize it’s a different type of contracting when compared to how most dollars are obligated each fiscal year. “Simplified Acquisitions account for nearly $40B in obligations since the start of FY12,” says Guy Timberlake, chief visionary officer and CEO of The American Small Business Coalition. “It may be a drop in the bucket, but I never turned down an opportunity to engage agencies this way.”
That’s because according to Timberlake, his first million dollar deal in government contracting was the result of developing a relationship with a Navy customer via these smaller buys.
Another potential perk for some in industry is the fact most Simplified Acquisition buys are awarded via a purchase order, a standalone contract. “Purchase orders are not buys placed against an established contract vehicle so this eliminates some of the traditional upfront investment of pursuing and being awarded a GSA Schedule, Blanket Purchase Agreement or Indefinite Delivery Contract.”
So which agencies are buying this way and what are they buying? Timberlake says “Nearly all of them and pretty much anything they want to buy that is considered goods and services.”
Note from Bill: As Guy points out, this is a way to build a relationship. These small purchase items represent “starter” contracts, requiring no vehicle, and can be a way to prove yourself or your solution. Part of the reason for reaching out to ASBC is because they have really focused on the simplified acquisition process, and have made this a way of business to be reckoned with. And since we were members of ASBC back when it started, it’s always good to see more of our small business advocates succeeding.
Guy Timberlake is Chief Visionary and Chief Executive Officer of The American Small Business Coalition (The ASBC). Under Guy’s leadership, The American Small Business Coalition is credited with enhancing the knowledge, skills and confidence of small government contractors, facilitating hundreds of productive partnerships between small, mid-tier and large companies, and contributing to the successful award and capture of contracts and subcontracts valued at more than $10 billion dollars.