The federal government purchases billions of dollars worth of goods and services each year, but as federal contract spending has declined over the years there’s been more competition for fewer dollars.
The most recent published data from fiscal 2015 shows the federal government awarded $439.3 billion in contracts, down 19 percent from fiscal 2010, according to a recent procurement report from American Express OPEN, a unit of the company focused on small business.
This still represents lots of opportunities for small businesses, if they are realistic in their expectations and abilities and establish links with key players.
- Stand out. “Small businesses have to look for smart ways to stand out in the crowd,” says Lourdes Martin-Rosa, a government contracting adviser for Manhattan-based AmEx OPEN, and avoid common mistakes.
“I have seen a medical supply company trying to sell to the Army Corps of Engineers, which mostly buys construction and engineering and architectural services,” Martin-Rosa says. “You have to target your marketing to those agencies that purchase what you sell.”
You can see what agencies are buying at Federal Business Opportunities: FBO.gov.
- Costs. Businesses also have to be smart in what bids they pursue, since the costs of bidding continue to rise. Active federal contractors reported spending an average of $148,124 in fiscal 2015 seeking federal contracts, up from an average of $86,124 in AmEx OPEN’s first survey, in 2010. These costs include filing, market research and other expenses in preparing the bid.
Small businesses need to be realistic about their ability to satisfy the contract requirements, says Dave Chiaro, an adviser at the Small Business Development Center at Farmingdale State College who helps businesses prepare to compete for contracts.
They also need to know they may not get paid for a while, he says — maybe not for six months — and they need the financial wherewithal to sustain themselves during that period.
- Get help. Chiaro suggests seeking help to navigate the government platform. Free resources include the center at Farmingdale State, another at Stony Brook University, and the Procurement Technical Assistance Program at LaGuardia Community College in Long Island City, Queens.
The senior adviser at the Stony Brook center, Ree Wackett, says it’s wise to network with purchasing officers and go to matchmaking sessions or pre-bid meetings with the purchasing agency to get to know the players. “It’s all about relationship building,” she says.
- Resumé. Bring along a “capability statement,” Wackett adds; it’s like a resumé for your business and generally includes your offerings, certifications you have, any contracts you’ve fulfilled before, and the like.
The same is true when competing on local, county, city and state levels.
Tunisha Walker, senior vice president at Capalino + Company, a government relations and strategic consulting firm in Manhattan, and leader of the firm’s Minority and Women-Owned Business Enterprise consulting group, says she encourages clients competing at the city and state level to go to the government agencies’ pre-proposal conferences. This gives businesses the opportunity to ask questions during the bidding process.
- Be creative. Businesses often just see the dollar amount and compete for a bid without taking into account what they actually need to do to secure that contract, she says.
They also need to think creatively, says Safeena Mecklai, an associate vice president at Capalino, because, for example, if they see a contract and think they’re too small to compete, they might decide to apply as a joint venture with a prime contractor or another business.
A lot of times, she says, they don’t think, “Who in my network can I team up with?”
62 percent: Percentage of active contractors who say it’s getting harder to win contracts because there are more bidders for each opportunity, up from 52 percent in 2013.
Source: American Express OPEN