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Contracting with GovernmentDiscussion from the trenches
Cecelia McCloy, PresidentIntegrated Science Solutions, Inc.
© ISSi
Who buys all these products or services?
• Cabinets• Cattle• Nuclear Engineering services• Rocket propellant• Processed cheese• Containers• Bricks• Paper• Microbiologic Services
April 2008 Alliance West 2© ISSi
Is the Federal Government a Customer for me?
The numbers are impressive• 2006 - $300B in contracting• 23% contracting goal to small
businesses•Goals for SDV; Minority; WOBs; Hubzone
• Services and Products bought are extensive
• BUT -It is difficult to do business with the federal government
April 2008 Alliance West 3© ISSi
It Will Cost You to Play
• Marketing will take $$$ and time• Identifying an opportunity to getting a
contract can be anywhere from 6 months to two years•Start small – look at subcontracting opportunities•Build your past performance
• Bidding can be expensive – Responding to a Full Request for Proposal as prime bidder•$25,000 to $55,000 (SB prime contracts)•Many hours of work with a multiple volume set•Need the right people to bid and to run the
contract•Need the right operational systems to perform
April 2008 Alliance West 4© ISSi
Plan
• Which agencies buy my services and/or products?
• What are my services or products? Past Performance
• All agencies have public web pages, review them• Some agencies have procurement forecasts• All agencies require large business prime
contractors to have small business plans• Is a GSA contract an option
• What should my win strategy be?• Some agencies are friendlier to small businesses
then others – learn who they are• Network, Network, Network• Ask – Why would someone want to team with me?
April 2008 Alliance West 5© ISSi
Plan
• How to I find opportunities?• Monitoring the Web
• www.Fedbizopps.gov• Try a private government bid portal
• Work with the Small business representatives from the agencies
• Attend Industry Days or Outreach Events for Agencies
• Use the Small Business Administration and affiliated organizations
April 2008 Alliance West 6© ISSi
Plan
• Identifying – Bidding – Winning• Design your strategy to ensure a Win
•What is the true likelihood of a Win• Is there an Incumbent? Is the agency
happy with them?•What does it take to win? Best Value?
Low Price?•Does this opportunity match my
business?
• Should I team?•Do I have a history with this customer?
Do they know me? Can I do all the work? Strategic Partnering?
April 2008 Alliance West 7© ISSi
Downside to Working for the government
• Bidding process is long and can be complicated
• You may need to hire help!
• There are lots of rules• Federal Acquisition Regulations (FARs)
• There are implications for your business processes (accounting, time charging, benefits)
• Maybe initial cash flow issues • Margins are not large on
government contracts – longevity vs. profits <10%
April 2008 Alliance West 8© ISSi
Benefits of Federal Government Contracting
•Stabilize your Cash Flow•Contracts are often of long duration
• 2 to 10 years not unusual•Government Experience can raise the bar on your company operations•Hire key personnel•Providing a needed service to your community
April 2008 Alliance West 9© ISSi
ISSi story
• First federal contract $300,000 as a subcontractor in March 1999
• First opportunity bid as major subcontractor July 1999 and won but delayed contract startup until Nov. 2000
• First win as prime contractor in March 2005 - Bid was in August 2004• First invoice paid after initial 70 days• Carried payroll of 22 staff on contract
April 2008 Alliance West 10© ISSi
ISSi story
ISSi Gross Revenue
April 2008 Alliance West 11
0
2
4
6
8
10
12
2000 2002 2004 2006 2007
Million
s
Revenues
© ISSi
Conclusion• Know why you want to work for
the Federal Government or government contractor
• Make sure you have identified a viable bid opportunity
• Make sure your company can withstand the cash flow issues
• Make sure you have the financial and operational systems in place when you win
• Don’t hold back - WinApril 2008 Alliance West 12© ISSi