Learning From the Best

Break into the federal government market with a little help from your friends

• By Megan Weadock
• Jan 07, 2008

The average small-business owner may view the world of federal government contracts as an intimidating, mind-boggling realm dominated by huge corporations— with the promise of great financial success just out of reach. However, breaking into the federal government marketplace is a feat that can be accomplished by small private companies—and one that has been achieved by countless organizations, especially in recent years.

Companies in the security industry, especially, are well positioned to take advantage of the burgeoning Department of Homeland Security, which has a budget of more than $46.3 billion in fiscal 2008. The department’s continuous advancements in national and public security make now a prime time to break into the market.

Be a Team Player
Although securing a contract with the federal government is no easy task, there are plenty of ways to make the process more manageable and much less daunting.

The first, and most often repeated, piece of advice is to avoid going it alone. By working with people or companies that have experience with the government market, enterprises gain access to untold amounts of wisdom.

“The federal IT marketplace is as competitive, if not more competitive, as the commercial marketplace. There’s a lot of strategy involved in those business opportunities, and all contracts are very competitive within the federal space,” said Gino Antonelli, executive vice president of development and service operations for Intelligent Decisions, a product reseller, manufacturer, service provider and consultant for the federal market. Since 1988, the company has earned more than $1 billion in sales to support defense, intelligence and civilian information technology requirements for the government.

“For organizations trying to get into the federal space, it’s really important to make sure from a hiring perspective they’re bringing on individuals that clearly have professional tenure and experience that relates to doing business with the federal government, including people with experience from a contractual or IT perspective,” he said. “The [government] market is a completely different environment than the commercial market in so many ways—for example, it’s bound by acquisition regulations, and the mission of the end user is extraordinarily important.”

Ludmilla Parnell is the marketing director of small-business partnerships for General Dynamics Information Technology, a provider of business aviation; land and expeditionary combat vehicles and systems, armaments and munitions; shipbuilding and marine systems; and mission-critical information systems and technologies for the federal government and commercial markets. With experience on both sides of the fence, Parnell agrees that the government landscape is much harder to navigate than the commercial one.

“Contracting knowledge plays an important role in this market, which is different than the private sector in many important respects, from pricing and costing to responding to solicitations and so on,” she said.

Antonelli recommends that small companies coming from a commercial background team up with larger, more experienced enterprises for help in breaking into the government marketplace.

“Link up with an organization that has experience in the federal marketplace, because it is very, very different. If you do that, your barriers to entry are somewhat mitigated,” he said.

DHS recognized this opportunity when it established its Mentor-Protégé Program. The program encourages larger companies to become mentors to smaller companies, providing developmental support, nurturing relationships between related firms and seeking to increase subcontracting opportunities and accomplishments.

Subcontracting opportunities become especially important when a protégé firm applies for a federal contract that requires past performance references, which Antonelli describes as a major obstacle to breaking into the government market. Past performance requirements can include an evaluation of various proposals, points of contact (much like references on a résumé), detailed descriptions of past efforts, and existing and previous contracts that are similar in nature and scope to the company’s current effort.

“The Mentor-Protégé Program is a great starting point,” Antonelli said. “Another way to establish a presence from the federal perspective is to align your company as a subcontractor with some of the larger organizations that have a contractual presence in the federal government. That would enable you to get a better understanding of how the marketplace works, and it gives you that past performance qualification.”

Do Your Homework
Once a smaller company has gotten its foot in the federal government contract door, there are plenty of opportunities for it to carve out a niche for itself. The SBA is a good place to start learning about the various avenues companies can take to secure a contract. These include many different ways to market to government buyers, including getting on the General Services Administration (GSA) schedule, qualifying for the HUBZone Program, taking part in contractor team arrangements and through special SBA programs. The SBA’s Web site also guides companies through the process, from understanding regulation and policy to registering a company and preparing the bid and proposal.

“A great place to start is on the GSA schedule, because a lot of what’s called blanket purchase agreements are derivatives of the GSA schedule,” Antonelli said. “The GSA schedule is utilized as a baseline. Also, it mandates that the government receives the best possible price versus the commercial marketplace, so it’s a great benchmark and contractual mechanism to have in place to service federal IT requirements.”

Parnell, of General Dynamics, a company that is actively involved in the Mentor- Protégé Program, stresses how important knowledge is in the contracting process. Understanding the rules of federal government contracting, such as the Federal Acquisition Regulations, which establish the terms under which the government contracts, are vital. Parnell advises that small companies invest in training as a fast and reliable way to gain knowledge quickly—“and avoid costly mistakes.”

“Many Web sites provide guidance tailored to the needs of small companies,” she said. “Government small-business offices also provide guidance and host seminars, conferences and other events to help educate small businesses on how to work with them. Government prime contractors participate in many of these events and provide guidance through their small-business offices. Also, the Center for Veterans Enterprise assists veteran-owned companies and entrepreneurs looking to start and expand their businesses in the federal and private marketplace.”

Other knowledge that may help small businesses is a simple understanding of the federal market and how their product will distinguish them from the competition.

“This means doing the research to better understand which customers to target, and then focusing efforts on that customer through meetings with them, participating in targeted shows and networking events, and attending industry briefings and customerfocused conferences,” Parnell said.

Small businesses can register on government databases, such as the Central Contractor Registration and the Dynamic Small Business Search, to begin marketing to the federal government. Parnell said small businesses also should list themselves in Dun and Bradstreet, a valuable source of information and insight on the commercial market.

Jump Right In
After 20 years of marketing to government buyers, Intelligent Decisions is a company that has plenty of experience negotiating the confusing realm of federal government contracts. Over the years, Intelligent Decisions has secured federal contracts for a broad range of products and services, such as mobile encryption and data communication, security and conversion, plus a recent contract with the Department of Veterans Affairs for data destruction.

“We know the deal with the federal marketplace— there are an incredible amount of regulations and nuances associated with it,” Antonelli said.

It’s these countless parameters and rules that may have many businesses wary about attempting to break into the federal government market. But by being open to learning from more experienced firms, small companies can start reaping the benefits of government contracts—while furthering the growing trend of cooperation between the private and public worlds.

“A partnership enables the private-public sector to really learn from one another, as it relates to best practices, leading-edge technologies and understanding each other’s goals and objectives,” Antonelli said.