A great way for tech companies to grow organically with their current products and/or service offerings is to procure government contracts. The federal government is the largest contractor in the United States. Landing a government contract, however, is not the same as contracting out your product or service commercially. It is a process that involves considerable up-front work.
There are tactics technology companies can use to break through the barriers to entry and land those contracts. But before we go there, let’s explore some do’s and don’ts when dealing with the government, as described by Matt Hankes in his article “Secret to Winning Federal Contracts” published at www.fedmarket.com.
Matt states, "The game known as federal contracting is fraught with rules and regulations. The game is so complicated that it even has its very own rulebook, the Federal Acquisition Regulation ('FAR')." He goes on to say that "Winning the game is not about following the FAR, though. The winners of government business know the secret is in selling. Yes, selling to those with whom you have created relationships built on trust."
As you can see, relationship building and the sales process is just as important in landing government contracts as it is with commercial ones. You can secure government contracts if your company has products and/or services the government needs AND the ability to build relationships through a skilled and motivated sales department. The article continues to make this point clear: “Although there are many pitfalls for companies embarking on an adventure in the federal arena, none is more costly or prevalent than the mistake of not adequately focusing on the relationship-building (or sales) process. Selling in the federal marketplace is much simpler in practice than it is in theory. To sell successfully in the federal market, one needs only do three things properly:- Establish the customer’s pain point;
- Create a solution; and
- Make it easy for the agency to choose you.”
Bypassing the key barrier to entry: past performance
In late 1990’s the federal government codified detailed past performance rules within FAR. Past performance is a significant barrier to entry for companies wanting lucrative government contracts. An article published on http://www.smalltofeds.com/entitled ‘The Small Business Government Contracting “Past Performance” Challenge’ describes it best:
“As a small business begins the proposal submission process to federal government agencies or to prime contractors the past performance challenge is a major challenge. By definition a start-up company in government contracting has no direct government agency past performance projects to site in meeting the requirement in requests for proposals (RFP’s) for historical references to similar projects in terms of size, duration and complexity.”
So how can an established technology company sell their offerings to the federal government? The article makes one suggestion: “Many small businesses work through prime contractors to "grow" past performance history (subcontracts count). By teaming with a sizable firm a small entity can relate its participation to larger projects and ultimately graduate to a good library of references, carefully maintained and kept as a living, growing data base of good customer service records that can be sited again and again in proposals.”
A better, quicker way:
I will now share a shrewder way to enter the government market. It can take years for a company to develop past performance status. A great way to eliminate this barrier to entry is to acquire a company which already has a past performance history. The challenge is to locate a target with synergies and a coverage area of expertise in information technologies.
Ideally, you want to acquire a company with a comprehensive understanding of technology and revenue procurement process as well as a proven focus on relationships and sales.
To view a spot-on example of such a company for sale and Navocate's Featured Listings, click here
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