The 18 Steps Complete Guide to Winning Federal Government Contracts and Grants.
This article is based on the ScaleUP USA’s comprehensive Federal Business Accelerator Program.
Why Develop this Guide to Sell to the Government?
As the former CIO of the US Department of Transportation (US DOT), I had oversight of over $3.5B in annual technology investments/acquisitions, over 3,000 IT employees, 10,000 technology contractors, and 200 major technology systems. In this unique position, I met hundreds of federal suppliers and contractors each year from the largest to the smallest who pitched to me for federal business. I realized then, that most entrepreneurs and businesses, especially beyond the Washington DC metro region, had little understanding of the federal opportunity or how to sell to the federal government. I therefore took two actions. First, my social entrepreneurship focused initiative ScaleUP USA created the nation’s first digital Federal Business Acceleration Program that companies can join to learn to win more business from the Federal Government. Second, I created this short 18 steps introductory primer for companies to understand the basic steps required to set up and successfully grow a federal contracting or supplier company in USA. So here is my 18 steps winning formula:
#1: Understand the BIG Opportunity:
The US federal government is the world’s largest customer spending approximately over $1 trillion annually through grants and contracts on products and services each year. In FY 2016 alone the US Federal Government spent $666B on grants and $461B on contracts. In ScaleUP USA’s experience you can build a very successful business in the federal government if you strategize, try hard, have patience, and work systematically.
#2: Get Involved in the Federal Business:
There are approximately 28 million businesses in USA. Of these, 99% of US businesses don’t even try to work with the Federal Government. So if you decide to make an attempt to work with the Federal Government you are already in the top 1%. This step is entirely in your hands! You must get mentally prepared to work with the Federal Government — which is complex and very different from working in the commercial sector. In ScaleUP USA’s opinion once you learn the best practices, tips and tricks, and time-tested formulas, you should do well.
#3: Check Out the Federal Opportunities:
The Federal Government seeks products or services through two different mechanisms including grants and contracts. Before you dive full fledge into working with the government, which is a little complicated, ScaleUP USA recommends that you first check out what the government is buying in your areas of expertise and make sure you like the buying patterns. The Government makes this very easy. For federal grants, you can search the “Grants.Gov” website and for federal contracts you can search “FBO.gov.”
#4: Check Out Your Federal Competition:
ScaleUP USA firmly suggests that you first need to do quick market research about your competition. Would you not like to find out what the government has bought in your area of interest, which agency bought it, which company sold this product or service to this agency, how big was the contract opportunity, and when was it sold? Well this research can be easily done by accessing the “Federal Procurement Data System” website.
#5: Identify your NAICS and FCS codes:
As you may have realized during your research in the earlier steps the Federal Government typically lists/identifies its procurement activities by the North American Industry Classification System (NAICS) and the Federal Supply Classification (FSC) codes. You must therefore know the relevant codes for the products and services you are planning to sell to the government so you can seek the right buying opportunities.
#6: Plan a Federal Business Strategy:
This a very critical step in ScaleUP USA’s opinion. The Federal government is large. Very large. It has around 20 large agencies and 80+ smaller agencies, with over 2.1 million employees. Unless you have a proven strategy to pursue the Federal Government opportunities, you will get lost in selling and lose valuable time, effort, and a lot of money! Without the proper business strategy you are a “rudderless ship on a shoreless sea.” Therefore, ScaleUP USA devotes substantial time to this area in the Federal Business Accelerator Program. This is a very critical step.
#7: Investigate Set-Aside Certifications:
According to SBA the current, government-wide procurement goal stipulates that at least 23% of all federal government contracting dollars should be awarded to small businesses. There are currently four categories under which your small business can be certified:
- Women-Owned Small Business — 5%
- Small Disadvantaged Business — 5%
- Service Disabled Veteran Owned Small Business — 3%
- HUBZone — 3%
According to the ScaleUP USA’s past research, many times Small Businesses pursue set-aside certifications at the wrong time, in the wrong category, and as a stand along strategy — wasting substantial financial resources and time. ScaleUP USA suggests that these certifications be pursued in conjunction with Step 6 and 8 or else these certifications may not be very effective in winning government business.
#8: Build a Capable Federal Team:
There was a time in the past where individual business owners would compete and win big in Federal Government. This aspect is no longer true due to the priority the Federal Government places on IDIQs, BPAs, GSA and other very large contracting vehicles for purchasing. ScaleUP USA’s recommendation is that today’s federal contractors and suppliers must build a strong federal team — an “ecosystem” including internal leadership, external partners, mentors, and subcontractors. This issue requires detailed planning. To understand more about federal teaming strategies, check out the appropriate section in the Federal Business Accelerator Program.
#9: Obtain DUNS Number:
Once you have your steps 1–7 planned out, it is time to register for your DUNS number. This business identification number is required if you want to work with the Federal Government. This number is provided free of charge to companies who want to do business with the Federal Government. Else, there is a small charge. To secure your number visit, Dun and Bradstreet. This is a routine, mechanical, but required step.
#10: Register in SAM:
The Federal Government requires you to have an active registration in SAM to do business with it. To register in SAM, at a minimum, you will need the following information:
- Your DUNS Number, Legal Business Name, and Physical Address from your Dun & Bradstreet (D&B) record.
- Your Taxpayer Identification Number (TIN) and Taxpayer Name associated with your TIN.
- Your bank’s routing number, your bank account number, and your bank account type, i.e. checking or savings, to set up Electronic Funds Transfer (EFT).
This again is a free, mechanical but required step. SAM registrations may have to be updated regularly to continue working with the government.
#11: Understand Federal Acquisitions:
Federal Acquisitions is a beast in itself that needs to be tamed. Once understood, the acquisitions process is standardized across the civilian and defense agencies unlike the state and local government rules and regulations — which differ. Check out the Federal Acquisition Regulation (FAR) and the Defense Federal Acquisition Regulation (DFAR). The government is aggressively moving towards contract vehicles that focus on procuring indefinite quantity of supplies or services during a fixed period of time. Therefore, ScaleUP USA recommends that your company establish and implement a strategy to win business through GSA schedules, IDIQs, BPA’s and other variety of mass purchase program. More information about this type of contracting is included in the Federal Business Accelerator Program.
#12: Offer Innovative Products and Services:
Clearly, the government is not interested in buying outdated products and services. Offering innovative and transformative products and services is important to create clear vectors of differentiation and beat competition in the federal marketplace. The question is how do you consistently innovate and transform efficiently and effectively in areas the government wants with limited resources you have? This is a complex question. ScaleUP’s USA’s research indicates that there are strategic ways to achieve this objective by woking with transformation as a service companies like GOVonomy as well as seeking government to fund your innovation! If you have established innovative service or product to help the Federal Government or need help in driving innovation in your products or services, connect with me via LinkedIn to discuss further or check out the appropriate section in the Federal Business Accelerator Program.
#13: Create Opportunities for your Company:
The Federal Government is a very large entity. It is impossible to adequately cover this organization especially if you are a micro, small or mid-size organization. So how do you compete with the larger companies and the incumbents who have a large business development staff or insider information? You can use a program ScaleUP USA developed and implements called “Federal Market Development” which focuses on creating opportunities, internal champions and community of interest from government employees and helping your company become a trusted advisor. This is a very affordable alternative to costly sales teams. If you need assistance in setting such a program for your company connect with me via LinkedIn to discuss further.
#14: Create Winning Proposal with Pricing:
If you don’t know how to write winning proposals and provide competitive pricing you can forget winning Federal Government business! Price too high and you lose. Price too low and you are out of business. ScaleUP USA spent considerable time documenting some of the best practices in these areas and has built a module for what it takes to build a winning proposal with smart pricing and impactful business capture process. There are ways to do this without burdening your company. If you need help, then check out this ready list of best practices and tips and tricks available in the Federal Business Accelerator Program or join this Winning Proposal Writing Program.
#17: Learn to Deliver Peak Performance:
The way to grow business in the Federal Government is to first create and understand the opportunity, then conclude the mechanical steps to register for the business, learn to win business and finally to masterfully implement the federal contracts and grants successfully. If you don’t know the last step — that is to implement successfully, then your first win will be your last win! We at ScaleUP USA call this successful implementation “Peak Performance” and we have developed a simple formula that allows you to come under budget and in time each and every time. Either develop your own methodology or use ours — but do make sure you master the art and science of successful implementation.
#18: Create Strong Past Performance:
The final act of becoming successful, is standing on top of a table and shouting out to the world how good you are! How do you do it? When you have a strong “past” performance, ScaleUP USA recommends that it may be worthwhile or in some cases required to get a document called the Open Ratings Past Performance Evaluation Report. Here, Dun & Bradstreet(D&B), conducts an independent audit of customer references and calculates a rating based on a statistical analysis of various performance data and survey responses. Typically, these reports have a shelf life of one-year and if they contain positive ratings, it can be a great scorecard for pitching your services to new government or business customers and for teaming. I highly recommend that you get this.
This guide is a short summary of the ScaleUP USA’s comprehensive Federal Business Accelerator Program. If you are serious about hunting for wins in the Federal Government, I sincerely recommend that you join the full program today!
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About the Author:
Nitin Pradhan is the former award-winning CIO of the US Department of Transportation, and a first term Obama Appointee; He is the current CEO of Launch Dream and leads their ScaleUP USA — Digital Business Growth Accelerator Initiative and is also Managing Partner of GOVonomy, an innovation as a service for governments and government contractors. He is also a Mentor at Mach 37, the nation’s top Cyber Accelerator, Z-nation Labs (India), and on the External Advisory Board of Accenture. Business and Government leaders can connect with him on LinkedIn or follow him on Twitter.