Winning Your First Contract
First steps to success.
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This is a high-level overview of what to expect when starting with government contracting. Remember, this is a challenging industry, but it can be quite lucrative if you stick with it!
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We generally see three “types” who gravitate to this market in the contracting world.
The existing business owner: This individual believes that selling to the government will be the same as selling to the commercial market. As a new contractor, you don’t just register on sam.gov, open your doors, and expect the government to come “buy” from you. This is where most small business owners fail before even starting. They expect the same methods they used with their existing business to translate directly to the government, and they expect it to happen fast. It will not be the case.
Former gov’t contractor: These individuals are working for, say, Lockheed, General Dynamics, or another large contractor. They work around some clients on site, and one day, they get a hint from their client that if they did whatever their specialty is as their own business, then their client would buy it directly from them instead. They then raced out, formed an LLC with one or two friends, and leveraged their relationships, landing their first contract. All probably went well until they stepped back and started asking how they would replicate it. How do they find the next client? Where do they go from here?
Prior military: They will tell themselves they already have a security clearance, socio-economic status, and work history with the government. They often believe it will be easy to jump in and start selling, not realizing that selling is way different from working with the government in the military; their status and clearance are the same as most others in the market, and they are really without much if any, advantage especially since your military crowd tends to confuse selling with directing.
Each scenario brings us to the same conclusion: first and foremost, you need to understand the market and what you plan to sell.
99% of people we communicate with can’t tell me exactly what they want to sell. It’s nearly always the “shotgun approach,” where someone throws stuff out there and sees what sticks. When you do this, you are just wasting everyone’s time; there is no competitive advantage, and you will be unable to understand any specific market with enough detail to develop relationships and sell in it.
Yes, the government does buy everything under the sun, but this does not mean it is “easy” to make them buy. This is a big market and a small community, so relationships are important!
Identify what you will sell (focus on one or two things only), research, and know the market better than anyone else in your region.
So, Where To Start?
Step #1:
Always research what you want to sell and determine who buys it (agencies, state, local government), where, how much, how often, and what contracts currently exist for this product or service.
This is an intensive process about which I will write more articles in the future. However, a solid starting point is understanding the NAICS (North American Industry Classification System) codes. Everything the government buys has a NAICS code assigned to it. Your sam.gov profile is based on which codes you select, as this is how agencies determine what you do.
Step #2:
Take these codes and research websites like usaspending.gov, sam.gov, and FDPS to find the answers to the questions listed above. Each site is used to find contracts or those that have been available and won in the past. Find out exactly who buys what you sell and what amount of money is involved in the average contract.
Save each site to your browser because you will use them weekly.
Cover Your Basics…
After researching and finding possible products or services you think you can sell, you must set up your business branding so it is directed at selling to the government.
You will need a website with at least one landing page directed at the federal government to make sure the government's website pages are accessible and easy to find. The contracting team will look into this for authenticity screening. Also, a capability statement that outlines what you do (like a marketing brochure), some business cards (yes, old school but still works), and social media accounts. For your socials, LinkedIn is an excellent start as, just like for regular companies, many gov’t officials have a LinkedIn.
Another simple addon for your website is any certification you can provide that shows you are a legitimate business. For example, a certification from the Better Business Bureau is small but can help. The contracting officer is deciding based on your business image and past performance, so anything you can do to appear more authentic will help. A little goes a long way with this.
Everything listed above is easily doable for less than $1,000.
The goal is to look professional and for the government officials who review your proposals to get the feeling that you are serious about government contracting.
Use Past Performance:
If you have prior experience in the private sector, you can leverage your portfolio of work to help secure your first contract. You need to be very clear on your past performance and directly relate this to whatever you are selling. Think NAICS codes. If you can get references from individuals you have worked with, that's even better.
In this case, for your marketing materials (capability statement), web design, and communication with the contracting team, you would include your references (names, phone numbers) and highlight what you did in quick bullets. One or two sentences for each of your top projects (action statements) that directly relate to the type of work you are trying to do for the government.
Action Statement Format:
What you did
How you did it
The impact
For example, I roofed five buildings in three weeks by managing a team of 14 subs that completed a $200k project under budget and one week ahead of schedule.
Understand The RFP/RFI Process:
Next, get familiar with the RFP (Request for Proposal) process. The goal is not to focus only on winning contracts (at this stage) but to understand how the process works, what type of things to look for, where to find RFPs, and the timelines. Understanding what to expect with RFPs before you try writing any proposals is best.
RFIs (Request for Information) will be where you want to spend more time when new. RFIs are designed for government officials to collect industry knowledge and expertise on a project. Based on what industry experts have said, they will use RFIs to build the final RFP. RFIs also let you know what will come down the pipeline as an RFP and allow you to position yourself for the final bid.
The information given during the RFI is used to craft the RFP. In this scenario, you can see that offering solutions to the contract team helps you position yourself as a likely candidate to fulfill the contract.
This happens across the contracting world, even at GDIT, Lockheed, etc. You can look at some of these large contracts and see that they are written in a way that a specific company can fill.
There are some general sentiments in the contracting world (mostly huge contracts) that it is too late to bid when you hear about the RFP without participating in the RFI.
In addition to the RFP/RFIs, learn where to get easy wins. For example, the simplified acquisitions process, GPC card limits, or how to set up a pilot program to introduce your product to a potential buyer.
Teaming:
You can find contractors (preferably primes) who have been in the contracting game for a while and convince them to help you. It's easier said than done, but most new contractors start by teaming with others already in the business. This is one of the best strategies to start.
For example, you can sub with a more prominent contractor with government work experience and relationships if you offer a service. This benefits the larger contractor when your company supplies specific expertise that strengthens their bid.
The greater risk would be with the prime, and if you do well as a sub, you now have real government work that you can add to your portfolio, allowing you to bid on larger contracts in the future.
Many small companies grow to be big without a prime contract. They align themselves with the larger players and build a very comfortable business as a subcontractor instead of going after the prime. Doing this allows you to be part of a larger contractor’s proposal process, which can help you decide if you want that responsibility, enabling you to learn the ropes with less risk.
Many of the largest contracts require up to 35% of the work to be subbed to small businesses, so the opportunities are vast, especially if your product or service is very niche.
So many new companies are looking to prime as their first contract. It’s not impossible, but a better use of your time could be strategy and teaming with others. When you realize this exists, it helps your market research as you should be searching both for the agencies buying your product and the companies fulfilling the current contracts, as they can be potential team members.
Start small, build a reputation, get your feet wet, and do a great job; eventually, those lucrative contracts will come.
Communication With Decision Makers:
The next step is outreach. FDPS and USAspending show exactly which agencies and customers buy what you sell. They also show the companies who earned the prime contracts.
You must identify the top three agencies that buy what you sell in your region. Go onto their websites and find their staff. Search for contracting teams (the titles vary with every organization); some sites list emails & phone numbers, others do not. Do searches on LinkedIn or social media (Facebook can work too).
Every agency should have a small business office dedicated to helping new contractors learn the basics, which is part of federal regulation requirements. Contact all of these offices in your region.
Your starting goal should be to gather 20 - 30 names you can contact. Add them to your CRM.
Start calling them.
In future articles, we will go into more depth on this process, but this is the basic summary of what you need to do.
Differentiation:
So many contractors focus on their status (Veteran, Woman Owned, 8(a), etc.), while these are extremely important. If you lead with this, you will shun anyone you talk to.
Most companies lead with this.
From the contracting officer's perspective, they are looking for a company that can fulfill the contract on time and per the requirements without significant issues. Because of this, you need to be an expert at something. Value must be demonstrated in your marketing, brand image, and communication with the decision-makers.
It must be understood that the government approval authorities will only be experts in some things. This is the purpose of the RFI process, but they will recognize when someone is attempting to be a generalist. They want experts, not generalists.
Trying to be a generalist will cause you to be slotted into the pile of companies with 50 NAICS codes. The companies that list cleaning services, IT services, nuclear waste cleanup, and everything else under the sun on their websites. Focus on one thing and then have one or two codes directly related to this if needed.
If you do a service, identify your strong points, be upfront about what you are great at, and hone in on the pain points you fix. If you did your research, you should tell the contracting team what they need help with, not the other way around.
When you can communicate this message simply (one or two sentences), you will be leaps and bounds over your competition, especially since so many working with the government are arrogant about their titles or status.
In the future, we will go into more detail about each aspect of the contracting process listed above. This was a general overview of what you can expect, with a starting timeline of at least six months before seeing any real traction. Government contracting can be highly lucrative, but most do not have the skin to stick with it long-term.
Let me know what questions you have in the comments below. And if you liked this article, be sure to subscribe below. Happy hunting!
**Resources**
This was an excellent introduction to the process. Very excited to read future articles!