As we said in our previous blog on the topic, the government is very process driven. That means that when transitioning your technology from the commercial market to conduct business with the government, you will have to adapt to their way of operation. because, like all areas, there needs to be a clear process in place when deciding on the right technology solution. The steps of that process look like this:
- Requirement Development
- Acquisition Planning
- RFP Draft and Release
- Evaluation
- Contract Award
There are a few important aspects of this process that are important to know before you get started.
Contracting Officers
The actual role of a contracting officer tends to be one of the misconceptions of this process.
They are required to be completely competition focused, meaning their goal is to seek out different vendors, which makes this whole process and relationship act in a way that is totally different from the commercial sector.
Another common misconception is the idea that the contracting officer owns the requirement, and therefore, going directly to them with your solution is the best route. In most cases, the contracting officer does not own the requirement, they simply execute the acquisition. In most cases, they are not taking input from the industry back to the end-user.
They are weighted completely towards what is written in the solicitation, and how the proposal addresses that.
Which brings us to the other essential aspect.
The Proposal
In reality, it is all about the proposal. Some people think they might get a leg up because of their connections; but they won’t. In most cases, the names on proposals get redacted to ensure the end-user requirement owner doesn’t know whose proposal they are looking at.
Other people might think they can get a leg up because they have the best understanding of the process, and they surely must have the best solution for the problem. But they won’t get a leg up. No matter what you might know about the process and the subject needs, if it is not indicated in the solicitation, then it won’t matter if you address it or not.
In fact, sometimes the people who may understand the customer needs the most are at a disadvantage, because it really does all come down to what is written in the proposal. You might provide the best solution at a better value than anyone else, but you have to pay attention to the process and what they are putting in the solicitations. If you price for a service that wasn’t indicated in the requirements, and someone else comes in lower, maybe because they didn’t understand the full scope but still hit all the service requirements in the solicitation, then that other contract is more likely to win.
It all comes down to evaluation criteria. What they say they’re weighing, and how they’re weighing it will ultimately lead to the decision.
Compliance
Earlier, we mentioned the importance of compliance when submitting a proposal. It is also important to keep compliance at the forefront as you grow and scale, as new compliance guidelines might be presented at any time.
For example, as you grow, you may face more cybersecurity requirements, or, depending on the route you take, you may also find some accounting standards that you will have to meet.
It is important to note that when you levy these compliance requirements, a lot of times you can bake that into your overhead or other costs so that you are reimbursed for that increase.
Payment Terms
You should never go into any business deal, commercial or federal, without knowing how and when you will be paid. Threats of a recession only make this more essential.
When working with the federal government, you can typically expect payment terms to be around 30 days after invoice. There are some ways to get advancements if you need, but the standard is 30 days.
The process and the systems to get paid can be a bit of a headache, but at the end of the day, you know the government will pay their bills.
Depending on what the economy and markets look like in the next year or so, we may see this as a huge upside to working with the federal government.
A Phase III Approach
There are different paths through this process, however, for our clients, we choose to focus on SBIR as a starting point.
We see multiple unique benefits to this approach.
- You can achieve a couple of million dollars in funding as a start;
- You can meet and further network with a few government customers;
- and what we see as the greatest value: you achieve sole-source authority.
Sole-source authority acts as a sort of unique exception to competition. This achievement means that if the customer comes to the contracting officer and says they want to buy something, and they have sole-source authority to do it, then you can sit down and buy what it is that they want.
In addition, with sole-source authority, you can now:
- Go to the market and sell to drive more revenue;
- Use the sole-source authority to do business with any federal customer (the DoD, the DoE, etc.) for the next 20 years;
- Avoid competitive processes and the race to the bottom.
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The tedious aspects of the process above is a deterring factor for many companies looking to diversify their revenue stream with federal dollars.
However, we have found that the SBIR route provides an effective on-ramp through many of these processes.
How do you eat an elephant? One bite at a time.
How do you make the federal government a lucrative customer of your dual-source technology?
One bite at a time.
Go back and read about how the federal side is different than commercial here.
