If you're a CEO who's just now beginning to pursue government contracting work, here's a quick primer on how best to proceed and what to watch out for:
- Know Your Sales Cycle. Government agencies are some of the most reliable clients out there. The rigorous award process provides a lot of transparency, and there's little danger they'll skip town and not pay the bill. However, because of the process involved in government contracting, it can take longer to receive payment for government work — sometimes up to 30 to 45 days after the work is completed. Make sure you figure this longer payment cycle into your budget planning: Can you cover your overhead until the payment arrives?
- Build Relationships Now. Some 80% of government contracts are never put up for bid. If a contract is under a certain dollar threshold, the agency is under no obligation to issue a bid notice or RFP. Government agencies rely on preferred vendor lists and pre-existing relationships to select the contractors for these lower-dollar procurements. Start getting to know the decision-makers at your target agencies — you never want your bid to be the first time they've heard of your company. Having a solid relationship with government agencies will also help your company get specified on larger-dollar contracts.
- Tackle the Competition. The majority of government contractors lose more bids than they win. Research your target agencies' purchasing histories. For example, do they prefer local contractors? Small businesses? Have they awarded the last several projects to the same company? Plus, make sure the project is one you want to pursue, and research your competitors to position your strengths against their weaknesses.
- Sweat the Small Stuff. In terms of complexity, a government RFP is on par with tax documents, only it involves the government paying you money! Read the RFP closely and pay attention to every detail. It's easy to get lost in all the government-speak, but doing so could mean bidding on a project you're ineligible for, having your proposal disqualified on a technicality, or — worst of all — bidding low because of incorrect pricing. You don't want to be awarded a contract you'll lose money on, or to spend a lot of time and money drafting a proposal for a contract you have no chance of winning.
- Stay on Top of Bid Notifications. Your proposal team will need as much time as possible to draft a winning proposal. The earlier you can find out about an opportunity, the more time your team will have to research, write and revise the proposal — giving you more of a competitive edge.
