The federal government is a marketing possibility for any small business. For most of the federal purchasing agencies, this is an opportunity based on e-commerce. Like all other marketing opportunities, to be successful in selling to the federal government, the business must price the product competitively and be prepared to package and ship according to very specific requirements.
A study of federal procurement sites, which was carried out by Federal Procurement from Small Firms, ranks 2,235 federal procurement centers on their levels of procurement from small businesses during fiscal year 1998. The review looked at contracts over $25,000.
In FY 1998, the government spent $181.7 billion for goods and services in prime contracts over $25,000. Small business received just 18.3 percent of the total awarded or $33.2 billion. The study revealed the centers spending the most on contracts did the least amount of spending with small contractors. Nineteen percent of the centers, 419, did no contracting or less than 5 percent of their contracting with small business. Procurement was concentrated in engineering and management services, general construction and real estate services. Next, but a much smaller amount, were health services, business services, electronic equipment and transportation equipment. Janitorial and commissary services, once procured almost exclusively from small business, are no longer the domain of small business.
What does this mean for you?
Marketing to the federal government is a series of well-defined tasks. Some are done one time and some are done on a repeat basis. Although well defined, the start-up business probably should not consider government contracting until the basics of business have been well established. The basics include definition of products, product sizes, pricing, bookkeeping, shipping and delivery, and marketing. These factors all should be outcomes of your business planning process and development of a written plan. Some contracts have a selection criterion to meet called “past performance.” With no business history, a start-up business will have trouble meeting this criterion.
How to Get Started
It is recommended that producers visit the State of Iowa procurement office for assistance in getting started on the federal procurement system. The contact is:
- Iowa Procurement Outreach Center (CIRAS)
Iowa Procurement Outreach Center (IPOC), Bruce Coney, Program Manager
Phone: (800) 458-4465
Coney’s staff can work with your group on an individual basis, and they sponsor sessions about how to get started with government contracting. The Iowa procurement unit sponsors monthly contracting networking breakfasts in Des Moines and Iowa City and is also considering expanding these events into Council Bluffs. The breakfasts provide networking opportunities with other companies.
Central Contracting Registration (CCR)
After contacting the Iowa center, a business needs to begin the registration process on the Internet. To be a successful government contractor requires Internet capability. The first site to visit is the Central Contract Registration (CCR) site. The CCR is the primary database for information about trading partners who would like to do business with the Department of Defense. The database contains trading partner information relevant to procurement and financial business transactions. CCR provides worldwide visibility to government buyers and finance officers for the purpose of streamlining contract awards and payments. Registration at this site also allows trading partners to avoid registration with multiple procurement offices.
To get started with CCR registration, you must have a Data Universal Numbering System (DUNS) number. The number can be obtained by calling Dunn and Bradstreet at (800) 333-0505. The process to request a number is free of charge and takes about 10 minutes. Registration with CCR is important because the entire federal procurement system is moving to the use of the system. This means that being listed in the CCR directory will give you electronic visibility to government buyers you have not yet met. Signing up here will allow you to do business with anyone in the federal government.
The web site address to get started is: http://www.ccr2000.com
Another web site is: http://dodbusopps.com/html/getstarted.html
This site provides helpful information on getting started with opportunities in selling to the military. It suggests reading a book, Selling to the Military Handbook, as a starting point and offers information about the book.
The Small Business Administration (SBA) has two programs to assist with government procurement opportunities. PRO-NET is a program of the SBA that is an electronic gateway of small business procurement information. It is an Internet data base with information on more than 170,000 women and minority owned businesses. Government agencies as well as prime and subcontractors can use the database to identify potential suppliers. The system also serves as an electronic gateway to the Commerce Business Daily, agency homepages and other procurement opportunities.
Another SBA program is SUB-NET. Prime contractors use this system to post subcontracting opportunities. Small businesses can review this Web site to identify opportunities in their area of expertise. Government agencies, colleges, universities, state and local governments also use the Web site for listing procurement needs.
The Web site address: http://www.pronet.sba.gov
The Bureau of Prisons also buys food products, both perishable and non-perishable. Each prison is responsible for buying its own products as are six regional offices and various training centers. The regional contracting office nearest Iowa is:
- North Central Regional Contracting Office
Tony D. Hiscocks, Regional Chief, Gateway Complex Tower II, 8th Floor, 400 State
Avenue, Kansas City, KA 66101-2492
Phone: (913) 551-1067
http://www.bop.gov
The Department of Justice has an Office of Small and Disadvantaged Business Utilization. This office has the responsibility to give contracts to small, small women owned and small disadvantaged businesses. Justice buys over $2 billion in goods each year.
The Web address is: http://www.usdoj.gov/jmd/osdbu/
The U. S. Department of Agriculture (USDA), Agriculture Marketing Service (AMS) purchases meat products for the National School Lunch program and other Federal Assistance programs. A visit to that Web site will provide a catalog to view information on how to sell products to the USDA and purchase reports.
The Web address: http://www.ams.usda.gov/cp/index.htm
Other Web sites that provide information for government contracting are:
Electronic Posting System: http://www.eps.gov
This site is a link to procurement opportunities.
Defense Supply Center Philadelphia: www.dscp.dla.mil
This center purchases food service items.
Key Factors to Success in Government Contracting
- Work with the procurement technical assistance centers to get started. Network. Go to any government procurement seminars offered and meet the federal purchasing agents present.
- You must utilize the Internet for government contracting.
- Research the Internet. Order any solicitation for products and review it to see if you should respond.
- Respond to any solicitation for a bid from a government office. Do not fail to respond. When you do respond, expect not to receive an award, especially when you are just starting out.
- Be persistent. One Iowa woman-owned business worked for seven years to win a contract bid. Once she did and supplied the product in a satisfactory manner, she continued to receive awards. She now supplies product to PXs all over the world.
- Have your basics of business, pricing, product, delivery and production well established before attempting government bids. A new start-up may be much less successful receiving an award until it has had at least one year in business. One reason for this is bid solicitations may call for past performance information.