If you are a CEO who is considering pursuing government contracting work as a means to diversify your revenue channels and grow your market, here's a quick primer on how best to proceed and what to watch out for in the B2G market:
Know The Government 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 Agency 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. To discover target agencies, you will need to review past award histories and future spending plans to see which agencies are active buyers in your market, then target to them with direct messaging that highlights your capabilities, differentiators and your unique value proposition.
Research Your Government Market Competition
The majority of government contractors lose more bids than they win. When considering a bid, research your target agencies' purchasing histories to understand their contractor preferences. Does the agency prefer local contractors? Small businesses? Have they awarded the last several projects to the same company? Knowing your competition is key to winning government bids. Your competition will aim to compete on price, value, reputation or some combination of the three and understanding your competitors in the market will help you to better highlight your key strengths in your bid proposal.
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.
Bids are Okay, Budgets are Better
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. You can use a bid notification service to alert you when a new bid or RFP is published, but savvy vendors leverage agency relationships and agency budget and planning documents to spot potential contracting opportunities months or years before they come up for open bid.