Small businesses interested in expanding their customer base should not ignore the largest purchaser of goods and services in the world - the United States Government. The Government purchased more than $200 billion in goods and services last year. It is not just buying battleships and smart bombs either, the Government needs everything from No. 2 pencils to sophisticated electronics to finely honed machined parts. A customer with that kind of buying power cannot be ignored!
A small business interested in Government Contracting needs to determine what the Government is buying and whether it has the resources necessary to fulfill those needs. The best way to assess potential opportunities is to visit the Federal Business Opportunity Web site, www.FedBizOpps.gov, where the Government posts its buying needs.
Subcontracting to Federal prime contractors is an excellent way to ease into Government Contracting and learn the process. In addition, the Government encourages prime contractors to seek out and work with small business subcontractors. The Small Business Administration (SBA) has a subcontracting opportunities directory, http://web.sbagov/subnet/, with contact information for prime contractors seeking subcontractors.
There are a number of practical and legal issues associated with subcontracts. They include targeting potential customers, developing strategic alliances, preparing and pricing proposals, protecting your proprietary data, etc.
Effective and appropriate marketing is essential to successful government contracting. You may have an advantage over others with similar products and services if you are a small business, woman-owned, or a certified 8(a). Learning how and who to market to are the keys to success. The government, or its prime contractor, like any customer, will want to know what makes your product better, cheaper and more effective than your competitor’s.
“Having a great product is not enough. You need to set up the right organizational structure, write a winning proposal, and perform as promised for long term success,” said Ron Perlman, vice chair, NDIA Small Business Division, and Chair of the Buchanan Ingersoll PC Government Contracts Group.
Government contracts and subcontracts provide an excellent opportunity for businesses looking for long term customer base expansion, but new contractors and subcontractors may need help avoiding the pitfalls often encountered by companies new to this arena.
Michael Tuite contributed to this article.