The federal government awards nearly $500 billion each year on contracts, and anyone can compete for them! After registering your business, you can join thousands of companies that participate in the government contracting marketplace.
But beware, the contracting process means that thousands of companies also spend a lot of money, time and effort chasing opportunities that they never had a chance at in the first place. Or they pursue strategies that aren’t going to get them any closer to landing that elusive first deal.
Don’t be one of these companies! If you’re interested in winning government contracts, we salute you. Not only is it a lucrative market, you’ll provide a key service to a client with an important mission that impacts us all. So in the interest of opening government markets to diverse new companies, we’re offering this list of seven common mistakes that cost government contractors a lot of time and money so you can avoid making them yourself.
We’ll cover each one in this blog:
- Over-reliance on socioeconomic designation
- Investing in GSA Schedules (when you don’t fully understand them)
- Spray and pray capture management
- Not being realistic about capabilities
- Not understanding how target agencies research and buy goods and services
- Not reading the solicitation and following the instructions precisely
- Failing to identify your differentiators
Over-reliance on socioeconomic designation
There’s a common misconception that getting a socioeconomic designation like an 8(a) certification or qualifying as a Service Disabled Veteran Owned Business (SDVOSB) is equivalent to a license to win government contracts. It’s not 100% false, but it’s also not so simple.
Yes, it is true that government agencies will set-aside contracts for qualifying small businesses, and these set-aside contracts can sometimes be awarded non-competitively to one firm. That’s about as easy as it gets though. You still have to develop relationships with customers. You still have to be attractive to your target buyer and offer needed goods and services. And you’ll still have to write a qualifying proposal.
By all means, if you qualify for a socioeconomic designation, you should absolutely pursue it. But it’s not a panacea. There are hundreds of other firms with the same socioeconomic designations, and they’re working as hard or harder than you.
Investing in GSA Schedules (when you don’t fully understand them)
To be clear, it’s not a mistake to pursue a GSA Schedule, if you fully understand what they are and why you’re trying to get on one. The mistake is spending time and money getting onto a GSA Schedule without validating that a) your target customers use them (not every agency does, and some Contracting Officers don’t prefer them) and b) you are prepared to honor the Most Favored Customer clause.
Getting a place on the GSA Schedule can be a great way for your company to open a door to new opportunities and customers. But unless you have significant government contracting experience, it’s not recommended that you try to do it alone. And even with consulting support, you’ll be digging through company records, filing new ones, and doing hours of bureaucratic busy work so that, twelve to eighteen months later, you might finally win a spot.
And then, guess what? The hard work finally starts, because there’s absolutely no revenue awarded if you eventually do earn a GSA Schedule. Quite the contrary: you then have to compete for opportunities, just like you would on the open market, and if you don’t earn enough in contract awards during your first year on the Schedule, the whole thing could be revoked.
So when it comes to GSA Schedules, make sure you proceed with diligence and caution.
Spray and pray capture management
If you like table games or gambling, you probably understand the importance of spreading your bets. Playing ten hands of online poker simultaneously could help you hit some huge pots, but if you’re not capable of keeping up with everything going on you might be better off focusing on just one or two games.
The same principle holds for government contracting. A lot of vendors want to play a numbers game with their business development, putting in many proposals and hoping they win 10% of them. If you offer commodities or simple products and services, that might not be a bad strategy. Especially if your buyers are selecting based on cost and technical acceptance; there’s not a lot you can do or say in a proposal to impact the outcome, so volume works when the costs of proposing are low.
But for any complex services or competitions that rely on best value tradeoff evaluations, the spray and pray mentality is only going to bring frustration and exhaustion. If your business development strategy relies on finding attractive solicitations on FBO.gov and writing the best damn proposals you can, you’re not going to make it in this market. You need to be further upstream, developing relationships earlier in the acquisition planning phase. Spend less time writing proposals in your office, and more time beating the pavement to shake hands with prospects and partners.
Then when the right opportunity comes along, you’ll feel better about the marathon 96-hour proposal exercise that lies at the end of the rainbow.
Not being realistic about capabilities
I call this the Vanilla Ice paradox: “Do you have a problem? Yo, I’ll solve it.” Sure, everyone wants to be service-oriented, and I believe you and your crack team of thought leaders and experts could certainly solve the problems facing your target customers if given the opportunity.
But this mistake is closely related to the spray and pray fallacy, and it results in a dilution of your key capabilities and differentiators. Furthermore, there’s only a few true “jack of all trades” companies in each sector, and you probably don’t have the resources to compete with them. Better to home in on a precise problem that you and your colleagues are uniquely positioned to solve.
Identify your product-market fit and then focus on finding customers that need what you offer. Not only will this help you find high-quality, viable leads, but you’ll also be more attractive to those large companies looking to diversify their proposal team with uniquely differentiated small businesses.
Not understanding how your target customers research and buy goods and services
See also: GSA Schedules and socioeconomic designations. Once you identify the agencies you’re targeting based on your product-market fit analysis, your next effort should involve determining how those agencies find companies, invite them to participate, and ultimately award contracts.
Because one thing is for sure, none of them do it the same way. Want to sell agile development services to GSA? From 2015-2017, there was a BPA for that. Got an innovative dental IT product? Then you will have to get on a GSA Schedule. The Department of Veteran’s Affairs (VA) Federal Supply Schedule, to be more specific; VA contracting officers can only buy dental equipment and supplies from this particular contract vehicle. And because of the VA’s mandatory Rule of 2, they have to award contracts to SDVOSB concerns if they are available.
Every agency has their own preferences, procedures, and policies for hiring contractors. This is another reason why understanding your product-market fit is crucial; you’re going to have to learn what these procedures are, and they aren’t all written on the website. Some you’ll have to discern through good old fashion BD work.
Not reading the solicitation and following instructions precisely
Picture this: you just spent the past two weeks writing a proposal with your team. You were aware of the opportunity from the start and even had some success in shaping the requirement to match your company’s unique value proposition. You’ve run it through the color teams, built a competitive price proposal, and your graphics are 100% on point. Everything looks great until legal review comes back with the haymaker: your company isn’t even eligible to bid due to a minor certification requirement that you didn’t even know was in the solicitation.
You hate to see it.
But it happens, and it’s completely avoidable. You just have to read the contract. Every single word. Don’t skip ahead to the statement of work and instructions to offerors without reading all the terms and conditions first. Many of the eligibility criteria (and other nullifying nuances of government contracting) can be triaged if you leave yourself enough time ahead of the proposal deadline to work through them.
Failing to identify your differentiators
I hate to break it to you, but everyone has industry-leading best practices, a deep understanding of the agency’s mission, and expert professionals above and beyond the key personnel criteria. That’s all table stakes for the competitive range.
If you really want to win government contracts, you have to know precisely what makes you different from the competition. If you can’t put your finger on it, then you’re probably not ready for prime time. But once you do find it, it’s got to be front and center in everything you do, because if your target agencies and professional counterparts don’t understand and appreciate these finer points, then you’re just another scoop of vanilla ice cream.
There’s nothing wrong with vanilla ice cream, I’ll eat a bowl of vanilla ice cream right now. But it doesn’t excite me enough to stick my neck out for it. And that’s the point. If you don’t have something special, you’re not going to gain an edge in a highly competitive market.
So there’s our list of the top seven mistakes government contractors make when trying to win public sector contracts. The process is wholly different from the private sector, and frankly, it’s a lot more difficult (and costly) to navigate. But once you break through the gates, it’s an excellent opportunity to enrich yourself and your shareholders while doing your part to help government better serve our fellow citizens.
Want to learn more about how to win government contracts? Register for our workshop.