CAN I REALLY SELL TO THE GOVERNMENT?
Multi-million dollar federal government contracts awarded to large defense and aerospace conglomerates often get a lot of attention through the media. But don’t let that discourage you from getting your company in a position to sell to the federal government; there are plenty of opportunities for small and medium size businesses, as well. The following Q&A’s will help you determine if your company is a likely candidate to sell to the federal government.
CAN A COMPANY LIKE MINE REALLY SELL TO THE GOVERNMENT‣
The federal government is the largest single customer in the world. They spend over $500 billion per year on goods and services.
Not all federal contracts are with huge corporations. In FY2011 the federal government awarded more than $91.5 billion in federal contracts to small businesses, which represented 21.65 percent of small business eligible federal contract dollars. And in addition, large federal contractors with large contracts must also subcontract to small businesses.
Many think the process of being a federal vendor is perplexing and has become too competitive. However, over the last 25 years, the federal government has worked diligently to simplify and automate the procurement process. With an understanding of the process and the market, a business can see great success in the federal market.
What does the federal government buy?‣
The United States Government is omnivorous in that they purchase everything from paperclips to aircraft carriers. The Government operates as a business, and just like any business they need to make daily purchases to run the Country (Their Business)
How does the government buy goods and services?‣
The government uses a variety of methods to purchase goods and service – from multi-year negotiated complex billion dollar contracts to simple commercial item credit card purchases.
The federal government continues to move the purchasing process to the internet. For example,
The U.S. General Services Administration (GSA) uses a website called GSA Advantage and a purchasing system called e-Buy
The Defense Logistics Agency uses the Internet Bid Board System (DIBBS) to purchase supply items
The Department of Defense uses an on-line system called EMALL
FedBd is a commercial systems used by a growing number of agencies to purchase commercial goods and services using a reverse bid process
How do I get started?‣
This is where we come in. This is our field of expertise, there is a tremendous amount of paperwork to become a vendor with the Government, and that is not all there are various registrations, certifications and qualifications that need to be encompassed before you can start making money. Much of this paperwork can and will look like a foreign language if you do not understand what you are looking at. Making a mistake can be a very costly one. Leave the getting there to the experts.
I have heard that the government payment process is complex and not very reliable. Can I depend on the government paying me for my work?‣
Yes. The government has made great strides to maximize the use of the Internet, electronic payment processes (EFT) and other technology to improve the acceptance and payment process. The federal government uses credit cards for many of its purchases. The Prompt Payment (1991) Act ensures that federal agencies pay vendors in a timely manner. If there are delays, the Prompt Payment Act assesses late interest penalties against agencies that pay vendors after a payment due date.
As with any business transaction, it pays to develop good relationships when selling to the federal government. Such relationships can alleviate challenges should they arise.
President Obama announced his new “QuickPay” plan for small businesses on Sept. 14, 2011. It requires agencies to cut checks in 15 days, instead of 30 days, after they receive a valid invoice. The 15-day payments apply only to prime contractors.
Government Contracting can and will be very lucrative if it is tackled properly and executed strategically. Every ask yourself why all big business has a Government Division? In order to be successful and ensure business continuity and growth you must diversify and find a consistent stream of revenue. The Government Provides Just That
KEARNEY AND REESE MANAGEMENT, INC
govERNMENT products division