Becoming successful with government contracting is not an easy feat. There are a lot of small businesses that are trying to enter this vertical – and many of these businesses would likely profit from such a relationship. However, most do not have the resources or the time to go through with the process. This is where it would be useful to outsource your business to government sales (B2G) and marketing program to a company dedicated to that function.

At PublicSpend we specialize in an array of services for small businesses which include researching and identifying government contract opportunities, comprehensive proposal writing and online government qualification marketing to name a few. It is crucial to be highly organized from the beginning of this process which is why I recommend that any business that wants to be successful with government contracting develops a B2G marketing plan and hires a dedicated sales team. It is important to determine if the ROI will be there and if there is potential to develop this aspect of your business.

The first step in the process is to understand the context in which your product or service could be used and determine which government agency could use it. Next, you need to review information on being a vendor for that agency by reviewing information on their website. If you are a small business – I would start off by contacting the small business liaison for that agency and discuss your products and the requirements for selling to that agency and any small business incentives/programs that may exist.

Once you have completed this research, you will know what steps are required for your products. These will include some general steps you need to take, (such as having a DUNS number, registering in the CCR and so forth if you want to contract at the federal level). You also will want to become familiar with the typical procurement requirements/contract language for your products.

One of the best strategies for entering the federal sector is to partner with a larger company. All the primes have small business requirements they must meet. Select several that are in the target market that you are interested in and develop a relationship with them. Most large companies have a small business liaison – just like the government agencies do. That person is the best place to start. You should also try to connect with any contacts that you have within those companies to research the best way to establish a working relationship. Some primes have pre-qualification procedures in place – so you will want to find out what those procedures are – because they can be lengthy.

You also want to get in on the ground floor for opportunities. The best time is in the pre-solicitation or sources sought phase. When you join a team at this point – you will be able to influence the resulting RFP (if the agency has a comment period) – and will be able to develop depth to your relationship with the prime before the RFP hits the streets.

At the state and local (county) levels you will want to follow similar steps in the beginning although you will obviously need to register with the state or municipality that you want to conduct business with. Again, identifying the right contract opportunities and building meaningful relationships with government takes time and resourcefulness – which is why outsourcing may be a good idea.

At PublicSpend we provide a number of services to meet the needs and resources of small businesses looking to be successful with government contracting at any level of government. If you wish to learn more information, you can contact us at 305-600-4576 and one of our associates will be glad to assist you or answer any questions that you may have.

Having spoken with a number of local, Miami-Dade County government vendors it appears that many federal government contracts are going to big business. Despite the reasoning that government has a local preference and that it aims to help out small business, this has not entirely been the case. Throughout Miami-Dade County various workshops and seminars have been held for small businesses that hold such certifications as a SBE or CSBE. Despite programs aimed at generating activity for small business and the local community it has been increasingly difficult for small, local companies to win government contracts.

According to local vendors, most of the Miami-Dade projects are going to medium and large companies while small companies are sitting at home or attending these seminars trying to win new work to sustain their businesses. Other companies with little luck are simply disappearing from the market.

Meanwhile companies like Dell Computer, General Electric and Boeing have moved in. All three were actually counted as “small businesses” doing work in Florida last year. These three Fortune 500s – along with a dozen other billion-dollar companies – soaked up at least $76 million in federal contracts that were recorded as going to small businesses during fiscal year 2008.

The issue of how federal dollars are spent is critical in a state like Florida where 90% of all businesses have fewer than 20 employees and government contracts represent a valuable lifeline amid a tanking economy. While the federal government should be giving around 23% of all direct, or prime, contracts to small companies it has missed the mark during the last three years.

It is simply not fair that Fortune 500 companies have been recorded as “small companies” in federal government contracts. According to the Small Business Administration small companies throughout the U.S. have received a record $93.2 billion in prime contracts in 2008. While that was $10 billion more than the previous year, it only represented 21.5% of all deals.

Some U.S. government agencies have been overstating their commitment to small business. Under federal guidelines, companies that start small and grow large – as well as small companies that are acquired by larger firms – can maintain the small-business status of their long-term contracts for up to five years.

The multiple loopholes, incomplete government data and the challenge of prying information out of privately held companies make the problem difficult to quantify.

The American Small Business League estimates more than $100 billion a year in small business contracts goes to Fortune 500 companies and others that are clearly not small.

Even successful small businesses have found the process challenging.

Structured Cabling Solutions, a Hialeah, Florida company that designs and installs data and communications networks, spent about nine months compiling the documents required to become a government contractor.

Among its 32 employees are two estimators and three project coordinators who focus on drumming up new clients. But even with an experienced staff, the process of bidding on federal contracts is so time-consuming the firm can only compete for a handful a year. The company only pursues Florida deals but often finds itself up against out-of-state firms with a strong national presence.

Large companies clearly have an advantage because they can afford to play the numbers game and submit more bids at lower prices leading to greater chances of success – particularly in a bad market.

The company recently won its first contract — a deal with the National Park Service to provide data and electricity cabling in the Everglades.

The contracting issues are not new. The Government Accountability Office and the SBA have produced more than a dozen reports since 2000 highlighting problems. While some contractors may misrepresent or erroneously calculate their size, most incorrect reporting results from errors made by government contracting personnel.

The House of Representatives is hoping to close some of the loopholes by making it illegal for publicly traded companies, and any firm with more than 50 percent foreign ownership, to be counted as a small business for the purposes of meeting federal agency contracting goals.

However the federal government could just as easily raise the federal small-business target from 23% to 30% of all federal contracts. Although this might not help considering the fact that the government has not been meeting their small business goals to begin with.

It is a well known fact that GSA or General Services Administration is the organization that oversees the business of the US federal government. On the one hand this organization oversees the business of the government providing responsible asset management. On the other hand it looks after the benefits of the citizens by helping in maintaining the safety of the nation with a variety of products and services.

In the present time a growing percentage of government purchases are done through GSA Schedules. GSA Schedules are actually programs through which GSA establishes long-term government-wide contracts with firms. This program provides federal agencies the access to order a wide gamut of products and services from GSA Schedule contractors. Buyers get the most competitive customer pricing and get the benefit of shorter acquisition lead-times.

Hence it goes without saying that requests for quotes from government and federal agencies are first placed to the contractors who are associated with GSA Schedule. It is also undeniably true that being on the GSA Schedule surely gives you an edge over your competitors. GSA also organizes to encourage and support small businesses interested to acquire a GSA Federal Supply Schedules contract.

Now the GSA is committed towards helping federal government and agencies meet environmental goals and standards. GSA follows stringent environmental policies that promote environment friendly products and services which would reduce harm to the environment. GSA helps federal agencies buy energy-efficient and recycled-content products.

So in this case it is needless to say that if you own a green business you can increase your chances of becoming a part of GSA Schedule than other commercial business competitors that lack green friendly practices. But running a green business or environment friendly business alone does not give you the same amount of credibility as a certified green business can.

It is a fact that in spite of all the rush and competition for winning a contract GSA analyses and evaluates each application individually and weighs the different strong points of a business in respect to the requirement.

Getting your green business certified increases your reliability and dependability factor because obtaining a certification for your green business is not an easy process. During the process of certification a business undergoes a lot of rounds and levels of auditing form the accrediting agencies. During these rounds of audit your business receives a lot of advice regarding the strengths and weaknesses of your business and how to turn your weaknesses into your strong points.

So there is no doubt that GSA Schedule authorities would give full credit to certifications where green businesses are concerned. Indeed why not? After all, the certificate awarding institutes are also tried and tested by the concerned organizations of the federal government. Also in order to get a certificate you need to comply by some set guidelines and practices which if followed makes you a responsible and trustworthy green business.

For more information on green certifications, I recommend you go to Business.gov and read about the plethora of green certifications which might apply to your business. Now is certainly a great time to get started with green initiatives for your business as many businesses small and large are taking proactive measures to make their business more environmentally friendly.

It’s interesting how much money the government spends contracting with businesses. In 2004, for example, the government spent about $300 billion. With the Recovery Act and stimulus programs this number will likely rise in the next few years.

Additionally, 23% of all federal procurement contracts are supposed to go to small businesses.

As you can see, there’s a lot of opportunity in government contracting today. But it is one thing to want one of these contracts and another to successfully land one.

Here are five steps to landing a government contract:

1. Be prepared: The federal procurement process is not an easy process to navigate. The first thing to understand is that federal procurement has its own unique set of rules and regulations which you must learn, called the Federal Acquisition Regulations (FAR). Under the FAR, selling to the government is not simply a matter of offering a fair price for good products to the right person. Instead, the government acquisition process is an animal unto itself, likely consisting of competitive (or sealed) bidding, among other buying procedures. So you need to learn about this process in considerable detail.

It is also a good idea to study the agency you may be targeting, and figure out how your product or service might fit into its needs. Realize that the agency will look critically at your business, especially your financial status, staffing, history and track record.

2. Select a niche: Government agencies are required to meet various small business procurement objectives. For instance, an agency may be looking to contract with a minority-owned business to help it meet its federally-mandated goals. Note, however, that any small business can bid on government contracts, but the ones below are given a special leg-up. They are:

* Women-owned businesses: A woman-owned business is one that is owned and controlled 51% or more by a woman or women.

* A small disadvantaged business: A small disadvantaged business is one that is 51% or more owned, controlled and operated by a person who is socially and economically disadvantaged. African Americans, Hispanic Americans, Asian Pacific Americans, Subcontinent Asian Americans, and Native Americans are presumed to meet this standard. Other entrepreneurs can qualify by showing, via a “preponderance of the evidence,” that they are disadvantaged.

* A veteran-owned business: This is a business that is owned 51% by a veteran.

* A service-disabled veteran-owned business: This business is owned 51% by one or more service-disabled veterans. The Veterans Administration confirms the disability.

3. Set up a CCR profile: To bid on government contracts, you need to register with the Central Contractor Registry (CCR). To register, you prepare a profile of your business explaining what it is you offer and what makes you unique. This “elevator pitch” needs to sell you in a short amount of time, so make it concise (and be sure to mention your website).

4. Locate relevant contracting opportunities: For many small businesses, this is the hard part, but I have two great tips to make the search easier. First, contact the small-business liaison within each agency; each has one. If you meet with the agency’s small business specialist, understand that he or she is not the buyer but rather, a person who will point you in the right direction.

Second, consider attending a “Business Matchmaking” event. Business Matchmaking is a United States Small Business Administration program that is sort of like speed dating; it is a place where small business can have quick get-to-know-you meetings with government and corporate procurement officers.

Business Matchmaking is the brainstorm of Hector Barreto, the administrator of the SBA who recently resigned. According to Barreto, traditionally most of these government contracts went to small businesses “inside the beltway” (in and near Washington, D.C.) Barreto figured that other small business people around the country might like to earn some of these contracts, so he teamed up with Hewlett Packard and created Business Matchmaking, a sort of traveling road show of procurement opportunities.

5. Sell: In the end, it is still business we are talking about. The steps above will get you in front of the right government contact with a possible contract, but then it is up to you to create rapport, explain why your business is better and different, and get them excited about what you have to offer.

Subcontracting is a great way for small business owners to enter the lucrative $500 billion federal market. There are billions of federal dollars being offered though the economic stimulus package under the Obama administration. This has caused the floodgates to open for small business owners competing over contracts directly from federal agencies. For those with no previous experience, winning a federal contract might be a long shot.

Why is subcontracting a great idea?

For one, you can increase your bottom line. You can also learn about the many requirements of government work without having to meet all of them. At the same time, subcontracting can provide direct access to the prime contractor with the kind of expertise and resources that your business may lack.

When bidding on contracts, large companies are required to submit subcontracting plans and they need small businesses to meet their subcontracting guidelines. One caveat is that subcontractors typically earn lower profit margins compared to prime contractors. However if you choose your partner carefully you can build credibility to enter into a prime contracting role in the future.

Attending networking events with federal agencies such as those sponsored by the U.S. Small Business Administration can help you get in front of prime contractors and decision makers at federal agencies.

Small business owners can also post their profiles for free online and network with contractors through websites such as the Federal Contracting Network and mySBX. You can also sign up with large prime contractors through their corporate websites. Browsing sites such as the SBA’s Subcontracting Network where prime contractors post opportunities can be a good way to identify the key players in the market.

When approaching prime contractors, small business owners need to be able to succinctly explain what they do and show how they can add value. I also recommend that you scrutinize prime contractors to verify that they are trustworthy and will follow through on contractual commitments.

It may sound obvious but make sure you understand the terms and conditions of the contract before signing it. I also recommend keeping any eye on compensation and how quality control will be conducted. Hiring an attorney or other expert in this field may be a good idea.

Finally, you need to ensure the contract is profitable or at least a break-even proposition. Some small business owners may be tempted to low-ball an offer with the hope of leveraging it into other business at higher rates. However this can be a mistake as that same price that will be expected in future contracts.

Does anyone have any other recommendations or resources for small businesses looking to win government contracts? Provide comments below.

I noticed that a huge number of 8A applicants looking to win a government contract are visiting this blog and trying to find out what the DSBS# / Dynamic Small Business Search Number is.  The number is needed on the 8A application form.  Thanks to a comment left by Brisa Tapia in a post I wrote on the Dynamic Small Business Search the mystery can be revealed.  With Brisa’s permission, here’s what you have to do:

-Go to http://www.ccr.gov
-Click on ‘Dynamic Small Business Search’
-Search for the firm’s profile using the DUNS, or Company Name, or CAGE #, etc.
-Open the firm’s profile
-You will see the SBA Customer ID Number in the url (at the top of the page where the internet link is display. I.E., http://www…..)
-The SBA Customer ID Number is at the end of the link and normally starts with a “P” and follow with around 7 numbers (i.e., P0123456)

Earlier this week our engineers pushed the button and we went live with premium functionality on PublicSpend!

We now offer anyone that signs up the ability to better market themselves to the growing audience of buyers that are visiting our site.  As we build the largest database of the most credible businesses in the United States we want vendors who have the qualifications to be listed on PublicSpend to access premium tools to help them showcase their company.  So now PublicSpend vendors that select a premium package can:

• Add an overview about their business
• Request customers to post testimonials about their work
• Post any news, jobs, special promotions or other information about their business
• Customize the web address of their listing so they can be more easily found
• Add a badge to their company website that links back to all their government qualifications

Over the next few months we will be releasing more functionality to help vendors catch the eye of buyers at the most critical point in the buying process – when shortlists are being compiled.  Make sure you keep posted!

Beginning September, 14 2009 the General Services Administration (who administer gsa schedule contracts) will put into place the Mentor-Protégé program to broaden the number of small businesses that are awarded contracts. The goal of the program is to help small businesses gain a foothold in the federal marketplace and foster long-term relationships between small and large companies, which typically hold valuable contracts.

If you are a small business with little or no government contract experience I highly recommend looking into the Mentor-Protégé program. Under this program small businesses can become protégés and receive assistance in their development as federal contractors. “Mentors” are typically established large companies with considerable experience in government contracting that can offer business guidance. Small businesses may also have the opportunity to mentor other small businesses.

I truly believe similar to obtaining a government certification (e.g., DBE) the Mentor-Protégé program will provide the kind of leverage that small businesses need to successfully enter the federal marketplace. Government typically continues to do business with large companies that they know and trust. Small companies can network and partner with these companies and take advantage of opportunities that will help them get ahead.

GSA expects the program to increase the overall number of small businesses receiving GSA contracts and subcontracts. However, GSA won’t measure the program’s success on the basis of awards and dollars alone. Officials plan to consider success as an increase in the number and value of subcontracts awarded to protégé companies by mentors. They also want to see expanded expertise by the protégé firms by seeing them enter industries that have they have not traditionally worked in.

To encourage companies to become mentors, the program allows contracting officers to look more favorably at bids from mentor/protégés. They can consider prime contractors’ compliance with its subcontracting plans as a factor in evaluating the company’s past performance.

For more information on the Mentor Protégé program go to the official site.

Please feel free to provide comments below regarding how useful you think this program will be for small business.

Recovery.org (not to be confused with the official federal site) is a great tool for tracking local stimulus projects. It uses search technology to aggregate information from local, state and federal websites as well as researchers who browse newspapers and public notices. Recovery.org also has clickable county-by-county maps and offers detailed breakdowns of specific projects often including the contact information of the person in charge of the project.

Here is how to get started with tracking local stimulus projects:

Click on a state (e.g., Florida) within the map. The map will then zoom in on the state of Florida and all the active recovery projects will be listed below. You can mouse over different counties within the state to view the current number of active projects along with their total value. On the list below the map you can filter statewide active recovery projects by city and project type (e.g., bid, presolicitation) which makes it easier to browse.

When you scroll down the list of active projects, you can then view each project’s name, location, county where work is being done along with the project type, estimated value, estimated jobs and publication date. You also have the option to comment on a specific project, which is a great feature.

Filter by city and select Miami.

Click on Rehabilitate Runway to view the details of the project.

You can view a more detailed description of the project. You also can vote on the project as “Worthwhile” or “Unnecessary” and select from specific reasons that support your point of view. For example, if you click on “Worthwhile” you can select “Long-Term Value” and then click submit. Keep in mind that you can select multiple reasons from the list.

If you decide to comment, scroll down and click “Be the First to Comment” – this will only appear if no one else has commented. Otherwise the link will appear as “Add New Comment.”

Another great feature of Recovery.org is the automatic notification feature or Business Registration Form. Without having to actively browse the Recovery.org website for projects, you can register with Recovery.org to continually receive notifications of upcoming economic recovery projects to your inbox for the location and industries you select.

The government is required to award 23% of its contracts to small businesses. However getting a foot in the door and navigating the federal bureaucracy to land one of these deals can be daunting. Bidding for government contracts is a highly competitive process that is typically done online through the GSA schedules. Buyers will typically only reach out to the most responsive and responsible vendors who offer the lowest prices.

This is why Hector Barreto, a former administrator of the Small Business Administration has organized networking events to introduce the government and large corporations to small business. Business Matchmaking hosts events throughout the country to educate small business owners and put them in front of buyers. The events typically target minority, women, veteran and disabled veteran owned firms who are limited in their ability to gain exposure to contracts.

While the event is free, participating small businesses have to meet certain eligibility criteria. You must have a DUNS number and register with the Central Contractor Registration, the government’s primary vendor database. Event organizers pair small businesses with buyers based on the services offered and needed. When a business signs up, they get prepped so they can take advantage of every minute of face time. If there is not a strong fit between vendor and buyer, Business Matchmaking can suggest where to go at another agency.

Business Matchmaking is sponsored by SCORE and several major corporations (e.g., American Airlines, Microsoft). Organizers estimate that $7 billion to $8 billion in contracts have been purchased over the past three years from connections made at the networking events. And they have helped organize over 75,000 meetings.

This can be a strong lead generation tool for your business, so why not attend one of these events? At the least you can gain a list of relevant government contacts to follow up with after only several hours of attending.

The weak economy has impacted most businesses but the government has to keep operating and has to purchase new products or services. The government also purchases a variety of products from transportation to security guard services and janitorial services – and they pay on time!

You can find out about upcoming events in your area here. If you are a buyer, you can access the Portal for Buyers to get started. If you cannot attend one of these events, you can join the Business Matchmaking online network to connect with buyers and learn about program updates.