Why Small Companies Win and Big Companies Lose Federal Procurements
By Carl Sara
Small businesses are in the driver’s seat when it comes to winning federal government contracts. Too often, they mistakenly believe that their size, resources, know-how and lack of visibility into the agency are roadblocks that they cannot surmount. They further incorrectly assume that the ‘big guys’ have the deal all sown up before the RFP hits the street. None of this could be further from reality. Small businesses actually have the edge in the federal government contracting world for three main reasons.
First, the federal government historically and today has made a firm commitment to both: A) award a significant share of contracting dollars to small business prime contractors; and, B) allocate aggressive percentages of large business awards to small business subcontractors. Right from the start, the odds are in favor of the small business bidder. Remember, you can’t hit the ball if you don’t swing the bat.
Second, small businesses possess the agility to develop innovative solutions quickly. That should surprise nobody at all. Big companies are too wrapped up in bureaucracy, torpor and focus on quarterly earnings. Entrepreneurs, on the other hand, start companies based on their innovations and inventions. They can move fast, decide quickly, pivot overnight and shift to grab the opportunity. Big firms will meet, form a study group, discuss, powerpoint each other forever, then in the end vote to avoid risk and do nothing. It’s the safe choice.
Third, small businesses operate within a low overhead structure that enables outstanding cost competitiveness. There are no layers upon layers of middle management who require offices, infrastructure and support systems and services that mire big firms with even bigger expenses.
Now, when you pair the above conditions with the major reasons why large businesses lose federal procurements, the market is ripe for the small business owner to do well in obtaining lucrative long-term federal business contracts. You just need to get started.
Here are some of the major reasons why large companies lose in their proposal bids. 1) Most government contract awards are made on the basis of price. If you are not the lowest price vendor, you lose. 2) Even large businesses submit offers that do not comply with all the requirements. If you did not comply, you were not in the competitive range and most likely your proposal was not even completely evaluated. You lose. 3) The management approach that was outlined was confusing or did not align with what the government agency preferred. You lose. 4) Something was wrong with the past performance of the company. You lose. 5) The government did not know – or did not prefer – the key personnel written into the proposal. Goodbye. 6) The company was not the incumbent and the government agency found risk in the transition plan. Farewell. 7) Another team offered “best value”. Bah bye.
So, given that small businesses really have an edge, this is what they must do to capitalize on that and win the business.
Small businesses should provide an approach and solution to the problem that complies with all the government requirements without exception. In plain terms, the business owners should ensure that their proposal makes it easy to demonstrate this compliance.
Next, small business leaders should ensure that your past performance on existing and prior contracts is relevant and uniformly outstanding. Ensure that your key personnel are known to the government procurement decision makers and are trusted. Finally, really understand what the “price to win” likely is and design your solution to fit that price.
Top 5 Tips to Successful Government Contracting By Carl Sara
Tip #1. Perform flawlessly on the contracts you currently have -- both in the government and private sectors. You need to leverage that experience and the references into new business and new contracts. Government awards contracts only to companies and teams with proven track records.
Tip #2. Use your existing contracts and research projects to hire outstanding talent. Develop compelling intellectual capital that will be irresistable to government project managers who need capable contractors to help them solve challenges.
Tip #3. Know the government agency's mission and needs so you can tune your offering to the nuances of their requirements. Socialize with government project managers and decision-makers BEFORE the agency is in a declared procurement stage so you can gain their trust and learn the challenges they face.
Tip #4. Innovate wildly and test many alternatives so yo can intelligently identify approaches that the problem, incorporate desired features that set you apart from competitors and result in the lowest cost.
Tip #5. Select key individuals and companies that will weaknesses and help you provide a complete solution and coherent team. Do this early, well before the government asks for proposals. Follow these FIVE TIPS and managing your growth will consume most of your energy.
3 Biggest Mistakes Small Companies Make
By Carl Sara
Mistake #1. Lots of small companies try to grow too big too fast. Small companies are resource constrained. Stick to your knitting and do only what you do best. Not even large companies try to be all things to all potential customers.
Mistake #2. High order volume can swamp small business quality control safeguards. Remember, your reputation is built on the quality of the product you ship. When the order volume increases, ensure the quality control team, resources and processes match the increase in production.
Mistake #3. Workplace politics and office dynamics can hurt productivity. Small companies especially can become wedded to the status quo. Don't be afraid to make policy, assignment, or employment changes that are in the best interest of the business.
AVOID THESE 3 MISTAKES AND YOUR BUSINESS CAN GROW.
Six Secrets to Getting on the right team
BY CARL SARA Summary Winning federal government contracts takes more than having the right products and services. There's a whole strategy around the best ways to get on the right teams to win. Here are six secrets that will make all the difference in the world to your company. And, following them will put you in the driver's seat to win.
The most formidable government contractors jockeying for lucrative federal government contracts are already on a team because government agencies bundle their requirements to satisfy a mission need. The solution they seek often requires an array of capabilities that is far greater and broader than the competencies and qualifications of any one single company.
Secret # One: Getting on the right team begins with knowing which team has the greatest probability of winning the award in the eyes of the procurement decision makers at that agency. So-- research which companies that agency has most recently awarded contracts for specific projects. Try to understand what the procurement officials want.
Secret # Two: Either start with in-house capabilities or add such capabilities to your company that are absolutely indispensable to the agency you have targeted. If you only offer commodity-type, common services then get serious about adding headcount that bring some unique talents and skills that will differentiate your offerings.
Secret # Three: You absolutely must have a stellar past performance record on all existing or prior relevant contracts that is known to government procurement decision-makers. Word gets out quickly, and often quietly when companies perform at mediocre levels. Talk to your current government clients and ask them about providing a reference on your behalf, if needed. If they decline, consider that a red flag and talk to your staff working the project to see how they can improve their output to better meet the level of service the government team expects. You need high marks with no exceptions.
Secret # Four: Familiarize yourself -- and do whatever homework is necessary -- to know the government agency mission related to the procurement as well as the agency employees and decision makers do. Do not skimp -- get immersed and get smart. It will take time but it is time well spent.
Secret # Five: You and your team must have the ability to quantitatively and succinctly demonstrate functional and performance superiority in your domain. Do not shy away from building spreadsheets that illustrate how you identify and measure this. The government wants to see evidence and a clear understanding of your model. This is not about "touchy-feely" things. It's about building and illustrating credible evidence.
And, Secret # Six: You and your team need to be willing to deliver your products and services at a price point below all other competitors. You must work hard to learn and understand how THEY price their work. Your must work hard to cut fat from your proposal. You must be willing to make just enough to make it worthwhile to win in the first place. But not more.