prepare your business for government sales

prepare your business for government sales This guide provides insight into how small businesses can prepare to sell to the U.S. Government. Topics include finding the most lucrative contract opportunities, successfully enrolling for participation in government contracting and tips for winning government contracts. Readers will also gain access to enrollment resources as well as tips from a small business owner who has succeeded beyond her dreams in government contracting. Specific sections include: 13 Steps to Prepare Your Business for Government Sales Researching and Pursuing the Highest Potential Opportunities Key Success Factors for Enrolling One Small Business s Explosive Growth Through Government Contracting Voice of Experience Enrollment Resources Worksheet: Get Started as a Government Contractor Worksheet: Filling Out a Government Contract Glossary of Key Terms 13 Steps to Prepare Your Business for Government Sales Government agencies federal, state and regional represent a tremendous market for small businesses. According to the Small Business Administration, annual Paul Cernuto High Tech Landscapes, Branchburg, NJ Member since 1989 spending by government agencies with small businesses reached $83.27 billion in fiscal year 2007, up from $77.76 billion the previous year. This number is expected to keep growing in the coming years. Even though these agencies are part of a giant bureaucracy, the process of becoming a government contractor isn t necessarily complicated. Follow these 13 steps to begin. 1. Develop/Update your business for government contracting This objective view of your business should cover your products and services, marketing and operational plans, the competition, your firm s strengths and weaknesses, and staffing needs. It should also define your goals, approach, market differentiators and available resources for pursuing government business. 1/20

2. Classify your product or service Before you begin working with the government, you will need to obtain a North American Industry Classification System (NAICS) number, which the government uses to categorize products and services. Find your NAICS code by going to http://www.census. gov/eos/www/naics/ and choose the code that best describes your products or services. If you don t find an exact match, you can always use the catchall Other within a business category. 3. Determine if you qualify as a small business Federal agencies are required to award at least 23 percent of all purchases to small businesses. To see if your business qualifies as a small business in the eyes of the government, review the Small Business Administration s size standards at http://www. sba.gov/contractingopportunities/officials/size/ GC-SMALL-BUS-SIZE-STANDARDS.html. All you need is your NAICS number, number of employees and annual receipts. Think your company is too big? You may be surprised at how large a company can be and still be considered small and, therefore, eligible for numerous contract opportunities. 4. Get a D-U-N-S Number You need a D-U-N-S Number to do business with the U.S. Government. This is simply a business identification number, similar to a Social Security number. You can get a D-U-N-S Number for free by contacting Dun & Bradstreet at 866-705-5711 or http://fedgov. dnb.com/webform. 5. Obtain a CAGE Code This number identifies companies wishing to do business with the federal government. To request a Commercial and Government Entity (CAGE) Code, download the form at http://www.forms.gov/bgfportal/ docdetails.do?did=11327. key success factors for securing government business As with all sales, government pitches will work best if you know the prospect, have your ducks in a row and emphasize the value your small business brings to the project. Use these tips to help increase your odds. Focus sales on your sweet spot. Pursue those opportunities that dovetail with what you do best. When you are preparing a bid, be sure to clearly communicate your unique value and why the government should choose you over other companies selling the same or similar offerings. Have strong references. Assemble updated contact information for key reference accounts. Contact these companies to ensure they would be willing to speak on your behalf. Know the context for your sale. Research the agency and understand the context in which your product or service will be used. Research previous contract awards for target agencies. Learn about their buying practices before requesting a meeting. Seek contracting experts. Consider hiring a consultant to help you navigate the enrollment process. While there are costs involved, it can be advantageous to receive guidance from a professional who is well-versed in helping. 2/20

6. Identify National Stock Numbers for all items you sell Make sure all your products and services are identified with an NSN designation. Contact the Defense Logistics Information Service at 877-352-2255 to obtain NSNs. 7. Register in the Centralized Contractor Registration (CCR) system This is the primary source for government agencies to learn about prospective vendors. It lets them search based on each vendor s abilities, size, ownership and other parameters. In most cases, you need to be registered in CCR to win a contract from any federal civilian or military agency. This is also a handy site for setting up your invoices to be paid electronically once you are doing business with the government. To register, go to http://www.ccr.gov. You will need to provide the following: Your Taxpayer Identification Number (issued by the IRS for your business, not unlike a Social Security number) D-U-N-S Number NAICS Code Bank account information including routing number, account number, bank contact information, remittance information for mailed checks and whether you accept credit cards; the ability to process credit card payments will increase the number of government contract opportunities available to you Capability narrative (that is, what products and/or services you offer) Key words that apply to your goods and services (250-word limit) Past performance summary Web site URL Email contact key success factors for securing government business (continued) organizations win government contracts. Use government resources. Attend vendor training sessions provided by government agencies. 8. Determine if your business qualifies for Small Business Certification The federal government sometimes gives preference to certain businesses: those owned and run by socially and economically disadvantaged individuals; those whose primary locations are in disadvantaged urban and rural communities; or those with at least 35 percent of employees in a historically underutilized business zone. Visit http://www.sba.gov/gcbd to determine if your business qualifies. 9. Submit an Online Representations and Certifications Application (ORCA) Visit http://orca.bpn.gov to record all of your company s required representations and certifications so they can be accessed by federal purchasing agencies. 10. Familiarize yourself with both the Federal Civilian and Department of Defense (DoD) contracting legal procedures Read the Federal Acquisition Regulations (FAR) at http://www.arnet.gov/ far/. The FAR is the primary regulation that all federal agencies follow when purchasing goods and services. The most important section to read is part 19 (about small businesses programs). 3/20

11. Check out the procurement forecasts for your targeted agencies Each federal agency produces an Annual Procurement Forecast, which is maintained by its Office of Small and Disadvantaged Business Utilization (OSDBU) or equivalent. Agencies are required to post actualized forecasts on their web site by October 1. You can contact each agency OSDBU at http://www.firstgov.gov to see what goods or services they anticipate buying. 12. Explore subcontracting opportunities You can also market your goods and services as a subcontractor through prime contractors. The Small Business Administration s site SUB-Net (http://web. sba.gov/subnet/search/) is a valuable resource for obtaining information on subcontracting opportunities. Prime contractors and government, commercial and educational entities post solicitations or notices there. You can also find Department of Defense subcontracting opportunities and prime contractor contacts at http://www.acq.osd.mil/sadbu/. 13. Market your firm to the right contacts Select your prospective government customers and research their requirements so you can make highly relevant offers that solve their unique challenges. Identify the agency personnel who make and influence these buying decisions and schedule appointments to speak with them in person. Provide leavebehind materials, such as brochures and catalogs. A word of caution: Procurement and program personnel are limited in what they can discuss with potential vendors, so be careful to learn about each agency s principles of competition before approaching them. Attending small business fairs and networking sessions is another terrific way to make contacts and gain exposure to key agency personnel. Many agencies host events that emphasize how to do business with the Voice of Experience Veteran government contractors confirm that businesses get better at selling to the government the more they do it. Leap ahead in your understanding of how to succeed by reviewing these tips from business owners who have been through the process. Know the agency you are targeting. Before responding to any government solicitation, check out the history of the agency s product/service awards at https:// www.fpds.gov. You can also access sales reported by GSA Schedule contractors at http://ssq.gsa.gov/. Make your price list easy to understand. Address all required items, even if they re not applicable. If you re in a competitive area, you may need to discount your top commercial price. However, don t discount so much that you will lose money on the transaction, and keep in mind that government agencies seek the best value, not necessarily the lowest price. Use the government proposal form. Write clearly and succinctly. Don t use abbreviations and acronyms unless you define them. Show that you understand the stated work requirements and that you are qualified. Have someone else proofread your proposal before you submit it. 4/20

government and provide information regarding their program activities. The General Services Administration Expo, for example, hosts more than 10,000 agency customers each year. You can learn about the GSA Expo and other small business events at http://www.expo.gsa. gov, http://www.gsa.gov/sbu and http://www. businessmatchmaking.com/. Some agencies require potential vendors to register on their databases in order to do business with them. Researching and Pursuing the Highest Potential Opportunities Once your business is prepared to sell to the government, it s time to start the process of finding the best opportunities for your company. This stage involves a great deal of information, but once you learn the structure of the government procurement process, you ll be on your way. Read about the following details of government procurement to identify the methods, areas and contracts that have the highest potential for success. Voice of Experience (continued) Learn from those who preceded you. Consultants, government agencies and associations are available to show you the ropes and increase your odds of success. Check with your local development office for a consultant referral and use the resources in these guides to find information that will save you time and money. Understand how the government buys The government buys goods and services in five primary ways: Micropurchases Purchases under $3,000, which don t require competitive quotes. Agencies can make these purchases on a government-issued credit card without getting approval from a procurement officer (hence, the ability to process credit cards is important to selling to the government). To sell your goods and services through micropurchases, contact small business specialists at the agencies you re targeting. Each federal agency has a specialist to assist small businesses. These specialists act as advocates, providing Theresa Alfaro Daytner Daytner Construction Group, Mt. Airy, MD Member since 2004 5/20

information and guidance on doing business with their agency, procurement procedures and marketing opportunities. Simplified acquisition process A streamlined way for agencies to solicit and compare bids valued at over $3,000 and under $100,000. It requires less documentation and involves fewer approval layers than typical government contracts. These contracts are to be awarded to small businesses, unless the contracting official can t find two small firms that can compete on price, quality and delivery. If you would like to sell products or services through simplified procedures, make sure you re registered with CCR and ORCA. Sealed bidding Used when an agency s requirements are very clear, specific and complete. The agency issues an invitation bid, describing to potential vendors the product or service needed; instructions for responding; conditions for purchase, delivery and payment; and a submission deadline. On a predetermined date, each sealed bid is opened in a public setting by a government contracting officer. All bids are read aloud and recorded. The contract is then awarded to the lowest bidder found to be responsive to the government s needs. You can review new bid invitations at http://www.fbo.gov. Contract negotiations A more complicated and time-consuming process typically used by agencies for purchasing highly technical products valued at more than $100,000. Agencies issue a request for proposal (RFP), inviting vendors to respond. These proposals can be subject to negotiation after they re submitted. If the government is merely considering acquiring goods or services, it may issue a request for quotation (RFQ) to gather data from available vendors. Responses to RFQs are for information-gathering purposes and aren t considered an official offer to the government. RFPs and RFQs are available for review daily at http://www.fbo.gov. Consolidated purchasing Used by multiple government agencies to gain economies of scale from shared purchasing needs, such as furniture, carpeting, office machines and perishable foods. The government awards these centralized buying vehicles to multiple potential vendors and negotiates prices ahead of time. This way, when an agency needs those goods or services, it can choose one of the vendors on the list and acquire the necessary items much faster than with a traditional RFP process. For example, Governmentwide Acquisition Contracts (GWACs) are consolidated purchasing agreements for the acquisition of IT products and services. You can find and respond to GWAC opportunities by going to http://www.fbo.gov. Identify business opportunities The most successful government contractors seek out opportunities in which they can excel. Use the following resources to identify opportunities that align with your skills and offerings. Visit http://www.fbo.gov to find 6/20

available opportunities valued at more than $25,000. (Simply log in as a vendor, click on opportunities and enter your NAICS code to find out what various agencies are buying.) Visit http://web.sba.gov/subnet/ to find subcontracting opportunities. Contact the various government agencies to request access to their Bid Board. You can log on to these sites and bid on all products and services by NSN number. Usually this information is available at agency sites under category names such as doing business with the government or SBA opportunities. Participate in consolidated purchasing opportunities Federal agencies can use Governmentwide Acquisition Contracts (GWACs) and the GSA s Federal Supply Service Schedule Contracts to buy commonly used products, services and solutions. If you would like to be considered for inclusion in these contracts, follow these steps. Before filling out a solicitation to participate in a GSA contract, you will need to submit a past performance form to Dun & Bradstreet s Open Ratings site. The GSA has Open Ratings give an objective evaluation of vendors previous performance by polling a series of customers. Simply contact Open Ratings (www.ppereports.com or reports@openratings.com) and provide them with your D-U-N-S Number, anywhere from 6 to 20 customer contacts, including email addresses, plus a fee. Once you receive your Open Ratings evaluation, go to http://www. gsaelibrary.gsa.gov to view schedule Dr. Lynn McMahan Southern Eye Care Center, Hattiesburg, MS Member since 1977 contracts, choose a schedule that matches your products or services and submit the solicitation provided. Within 30 to 180 business days, you should hear whether your solicitation was approved. If it is rejected for any reason, you can request a debriefing from a GSA contract officer within three days to learn why. If your solicitation is approved, you ll receive a contract number that allows you to list your products and services on the GSA Advantage! web site (http://www.gsaadvantage. gov), an online shopping service for all government customers. For more information about the GSA Schedules, call 800-488-3111, email mashelpdesk@gsa.gov, or go to http://www.gsa.gov and click on GSA schedules to walk through the submission process. One Small Business s Explosive Growth Through Government Contracting Back in 1990, Patricia Pliego Stout had no plans to market her company s travel services to the government. A visit to an 7/20

economic development conference changed all that. Stout, president and CEO of the Alamo Travel Group in San Antonio, Texas, heard government representatives speaking about vendor opportunities. That empowered me, Stout says. My business was doing well, but I could see this could really accelerate my revenues. I looked at this man telling me about being a government contractor and thought, I am going to do this. Since that day, Stout s business has grown exponentially. The company now processes nearly 530,000 transactions a year for corporate, leisure and government travelers. Today nearly 75 percent of Stout s business comes from the government contacts she has built and nurtured. Alamo Travel is a thriving company with 14 offices doing business in seven states. Stout is thankful for her success and shares these tips for becoming a prosperous government contractor: Find a consultant When you first work with the government, it can be intimidating, Stout says. I was so excited to get my first government proposal years ago, but when it arrived, it was almost 300 pages, filled with language I didn t understand. A local economic development office recommended a consultant who could help Stout respond to the RFP. Initially, Stout was hesitant about paying for the consultant s services, but now says it was a great investment. She worked with me to learn about my business, she explains. It was terrific to have someone with fresh eyes come in to tell our story and who could help me understand the government s language. That was the first of many government contracts that Alamo Travel won. The company is now certified as a travel service provider for federal and state employees of the State of Texas, the General Services Administration and the Department of Defense, and provides travel services to the Department of Justice, US Citizenship and Immigration Services and more than a dozen Air Force bases in the area. Don t underbid Don t bid with a price you can t sustain. It s easy to underestimate the work and costs involved with performing on government contracts. This can be an expensive mistake. Every contract is unique, so don t make assumptions. Ask questions to be sure you understand all the elements involved so you can price correctly. Work from the inside out Ensure that your business is financially strong. Set up your own support network by having a great business administrator, accountant and banker. Make contacts I love to go to conferences, and I attend 10 or more each year, Stout says. It s a great way to meet contracting officers face to face and show them you re serious and committed. 8/20

Resources for Getting on the GSA Schedule The following list of sites can help you understand the enrollment process better. Acquisition Central http://www.acquisition.gov Web site for the federal acquisition community and the government s business partners. Center for Acquisition Excellence http://www.gsa.gov/cae The site offers a free, self-paced vendor course titled How to Become a Contractor GSA Schedules Program. It describes the program, how to submit an offer, the award process and how to successfully market to the GSA. Contractor Team Arrangements http://www.gsa.gov/cta Information on creating partnerships between two vendors working together to increase visibility and meet GSA requirements. Department of Defense s Office of Small Business Programs http://www.acq.osd.mil/osbp/index.html The DoD offers programs such as the Mentor-Protégé Program, the Small Business Innovation Research Program, Women-Owned Small Businesses Program, Indian Incentive Program, Historically Black Colleges and Universities/Minority Institutions Technical Assistance Program and Service-Disabled Veteran-Owned Small Business Program. Getting on the GSA Schedule http://www.gsa.gov/gettingonschedule More information and training opportunities for potential GSA contractors. Read the GSA s guide, Doing Business with GSA at http://www gsa.gov/gsa/cm_attachments/ GSA_DOCUMENT/Doing%20 Business%20with%20GSA-11-17- 08%20update_R2R01j_0Z5RDZi34K-pR.pdf Read the GSA s guide, The Steps to Success How to be a Successful Contractor at http:// vsc.gsa.gov/stepstosuccess.pdf Get GSA Schedule sales information at the GSA s Vendor Support Center at http://www.gsa.gov/vsc/ Multiple Award Schedule (MAS) Express Program http://www.gsa.gov/portal/gsa/ep/ contentview.do?contenttype=gsabasi C&contentId=22292 Designed to simplify and accelerate the process of vendors obtaining MAS (multiple award schedule) contracts (also known as GSA Schedule contracts). Minority Business Development Agency http://www.mbda.gov Access to markets, capital, training and more. Office of Management and Budget http://www.whitehouse.gov/omb/index.html Information on planned federal spending. 9/20

worksheet 1 Get Started as a Government Contractor Getting started on the process of becoming a government contractor can seem daunting. However, much of it is a matter of effort, and getting organized is a good way to start. As part of the system you set up on your computer to keep track of all the resources, connections and information you will be aggregating during this process, use this worksheet to help you assemble key information. As you progress in working with the government, you will likely want to track and manage pertinent contracting information in an Excel spreadsheet or other contact management system. background information Check that you have the below information, which you will need as you enroll to participate in government contracts. D-U-N-S Number NAICS code CAGE Code NSN for (product/service name) NSN for (product/service name) NSN for (product/service name) NSN for (product/service name) NSN for (product/service name) NSN for (product/service name) Number of employees as of (date) Annual receipts for year ending Activities checklist Yes No Registered with CCR Registered with OCRA Validated small business status Checked qualification for 8(a), SDB, WOB, SDVOB or HUBZone 10/20

worksheet 1 Get Started as a Government Contractor Follow-up questions Write down questions you have about the Federal Acquisition Regulations, subcontracting opportunities and other issues. Many of the organizations found in the Enrollment Resources section of this guide may have information that answers your questions. It s also prudent to seek advice from professionals such as your attorney or accountant. Questions about Federal Acquisition Regulations Questions about subcontracting Outreach activities Upcoming agency appointments Date Name Notes Time Agency Date Name Notes Time Agency Date Name Notes Time Agency 11/20

worksheet 1 Get Started as a Government Contractor Upcoming events Research upcoming networking events at sites such as http://www.openforum.com, http://www.expo.gsa.gov, http://www.gsa.gov/sbu and http://www.businessmatchmaking. com, and track them here or in your online calendar. After each event, keep notes on contacts made and follow-up activities that may be able to help you grow your business network. Upcoming business fairs Event #1 Event name Date Time Location Registered? Post-event follow-up Event #2 Event name Date Time Location Registered? Post-event follow-up 12/20

worksheet 1 Get Started as a Government Contractor Upcoming matchmaking sessions Session #1 Session name Date Time Location Registered? Post-session follow-up Session #2 Session name Date Time Location Registered? Post-session follow-up 13/20

worksheet 2 Filling Out a Government Contract Completing a government contract may seem complicated. However, a little preparation can make a big difference. As part of the system you set up on your computer to keep track of all the resources, connections and information you will be aggregating during this process, use this worksheet to help organize your thoughts and develop a strong case for why your business should win the contract you re aiming for. prospective client information Target agency last contact Contact name Contact title Phone E email Address City/State/ZIP Target agency last contact Contact name Contact title Phone E email Address City/State/ZIP Target agency last contact Contact name Contact title Phone E email Address City/State/ZIP Forecast opportunities Solicitation number P post date Synopsis Solicitation number P post date Synopsis 14/20

worksheet 2 Filling Out a Government Contract Solicitation number P post date Synopsis Questions you can use when preparing to respond to a government solicitation: Think through and document answers to the following questions about your business. Have these answers on hand each time you apply for a contract or meet with a potential government contracting source. What is our area of expertise, and how will it benefit this agency specifically? Who is our competition, and what are our strengths/weaknesses against them? Who has the authority to purchase in this office? What do we know about that person? Have we reached out to that individual? What objections might this buyer have to purchasing from our business, and what is the best way to address these concerns? Who have they previously awarded contracts to in our product/service area? What information do we know about why this vendor was selected? 15/20

Glossary of Key Terms Government terminology can be confusing for the uninitiated. Use this glossary so you may be better able to speak the language. Basic Ordering Agreement (BOA): Written agreement between a buyer and a seller outlining the terms, specifications and prices of the goods or services to be supplied. A basic ordering agreement is not a contract. Bid Protest: Challenge by a bidder against the awarding of a government contract. Blanket Purchase Agreement (BPA): Simplified way to fill anticipated repetitive needs for services and products. Capability Statement: Document that summarizes a company s background, certifications, experience, capabilities, expertise, past performance and pertinent codes, such as D-U-N-S, CAGE, etc. Central Contractor Registration (CCR): Primary vendor database for the federal government. All individuals or companies wanting to be awarded government contracts must be registered in the CCR. Certified 8(a) Firm: Business eligible to receive government contracts under the Small Business Administration s 8(a) Business Development Program because it is owned and operated by socially or economically disadvantaged individuals. Change: Any action that requires a revision to the original requirements in a contract. Change Order: Written order directing the contractor to amend a contract. Commercial And Government Entity (CAGE) Code: Five-character ID number that identifies government contractors. Commercial Marketing Representative (CMR): Individual who works with prime contractors to locate subcontractors. Contract: Mutually binding legal agreement that obligates the seller to furnish supplies or services and the buyer to pay for them. Contracting Officer (CO): Individual who has the authority to enter into, administer and/or terminate contracts and makes related decisions regarding the contract. 16/20

Glossary of Key Terms (continued) Default: Failure by a party to fulfill a contract or to comply with the requirements set in the contract. D-U-N-S (Data Universal Numbering System) Number: Nine-digit number issued by Dun & Bradstreet that the federal government uses to identify a contractor and list its address, telephone number, employee size and other information. FedBizOpps: Online entry point for government procurement opportunities over $25,000. Buyers are allowed to publicize their opportunities directly at the web site (http://www.fedbizopps.gov). Federal Acquisition Regulation Council: Governing body that makes FAR interpretations and rulings. Federal Acquisition Regulations (FAR): Set of rules that government agencies must follow when purchasing goods and services. Full and Open Competition: Refers to the rule that all appropriate suppliers may compete for a contract. General Services Administration (GSA): Independent agency that establishes procurement policy and secures the buildings, products, services, technology and other workplace essentials for government agencies. Invitation For Bid (IFB): Method used to accept a sealed bid and includes a description of the product or service to be acquired, bidding instructions, packaging, delivery, payment, contract clauses and deadline. Mentor: Individual or business who creates a program to advance strategic relationships with a less experienced business. Negotiation: Bargaining process that precedes an agreement between two or more parties. A successful negotiation usually results in a contract. North American Industry Classification System (NAICS): Set of categories developed by the United States, Canada and Mexico to classify businesses in the three countries. This classification replaces the old SIC code. Prime contractor: Individual or business contracted to perform a specified piece of work. Procurement Technology Assistance Centers (PTACs): Located across the United States, these centers help small businesses complete the steps to work with the federal government. 17/20

Glossary of Key Terms (continued) Protégé: Individual or developing business who cooperates with another more experienced individual or company to improve its capabilities. Request for Proposal (RFP): Government document outlining the criteria and requirements to evaluate offers. Request for Proposal (RFP): Government document outlining the criteria and requirements to evaluate offers. Sealed Bidding: Procurement method involving solicitation of bids and awarding of a contract to the individual or company whose bid benefits the government most, considering price and pricerelated factors. SCORE, Counselors to America s Small Business: Nonprofit association that provides entrepreneurs with free, confidential face-to-face and email business counseling. Small Business Administration (SBA): Independent agency chartered to protect the interests of small businesses and maintain free competitive enterprise. Standard Industrial Classification (SIC) Code: See NAICS. Subcontractor: Individual, business or corporation hired by a prime contractor to perform a specified piece of work required as part of an overall contract. Taxpayer Identification Number (TIN): Number assigned to a business by the IRS that is needed to complete CCR registration. Women-Owned Small Business (WOSB): Small business that is at least 51 percent owned and controlled by a woman. 18/20

NOTES To learn more about our products and services, call 1-800-NOW-OPEN or visit us at www.open.com For more OPEN Book Insights, and other resources to help you grow your business, visit www.openforum.com Copyright 2005-2008 American Express Company. All Rights Reserved. The information contained in this document is meant for advisory purposes only. American Express accepts no liability for any outcome of its use. 19/20