Contracting with Uncle Sam Preparing early and paying attention to some key issues will help build success.
By Robert S. Frey
For-profit small business contracting companies that support the federal government are presented with both unparalleled opportunities and significant challenges. There are a number of issues that small business owners should keep in mind when preparing to enter the federal contracting arena. Diversify Customer Base Beginning early in your company's life, pursue contracting opportunities with a broad spectrum of federal customers, including defense, civilian, law enforcement and intelligence agencies and organizations.
This approach provides several tangible advantages for your business. First, your company is less impacted by shifts in executive branch federal budget decisions and by changes in Congressional spending patterns (e.g., pendulum swings in spending levels between defense and civilian programs depending upon national priorities and political trends). Second, a broad cross-section of contractual experience and the positive past performance references that are generated from that experience are critical for additional market penetration and growth.
Some small businesses enjoy success with one or two federal agencies or centers, but they can find it difficult⎯particularly as they move further through the Small Business Administration’s 8(a) program⎯to leverage that limited experience into contracts with other federal entities. Look for Government-wide Acquisition Contracts (GWACs), which are critical federal contractual vehicles for businesses of all sizes.
GWACs are becoming the vehicle of choice for many federal government agencies because much of the procurement paperwork, price justifications and contractor selections can be done up front in the GWAC procurement process. Individual purchases then can be made quickly from a small cadre of qualified vendors through the use of a task order competition or purchase order. Customer Satisfaction When your company is young, invest the time and resources to develop and implement an ongoing customer satisfaction assessment program. Such a corporate-sponsored initiative demonstrates clearly to your customers that your company is committed to exemplary technical performance coupled with effective schedule and cost control.
When operated appropriately, this type of customer satisfaction program also allows your company to get out in front of potential issues before they can become performance problems. Build communication, action and follow-up, and feedback into your customer satisfaction program. Customers should be able to recognize that you are taking positive action on issues that they have identified.
Because of the increasing weight placed on past performance in the federal acquisition process, providing exemplary services and products and delivering "customer enthusiasm" are critical to your company's long-term success.
Attraction and Retention Strive to pursue and bid at least twice as many marketing opportunities as you can comfortably support. To do this, you’ll need a strong and capable staff. Small business staff must work extra hard to meet the demands of multiple roles, such as operations, business development, capture management and proposal development support. This sustained high level of effort on the part of your staff is what it takes to grow your small business. Invest in highly qualified, energetic, hands-on and dedicated people for key roles, such as business development and proposal development. Too many small companies wait until the time for graduation from the 8(a) program is nearly upon them before recruiting and hiring experienced professionals with proven track records for these vital roles within the company.
It’s important that the key hires be "player-coaches," meaning that they have to be willing and able to wear many hats, be hands-on achievers, and be able to impart an enterprise-level view to the new people who will join the team as the company wins news business, expands its general and administrative pool, and can hire additional people to share the workload.
Business Culture Your small company's business culture must be simultaneously employee-centric and customer-focused. Adopt a corporate value system that builds upon trust within the executive leadership. Your organization should be driven to performance excellence and the advancement of your customer's mission.
Management
Accountability and decisiveness are two critical ingredients for successful management of your organization. There must be a system for total accountability. Along with accountability must come authority and genuine "skin in the game." Key people who should be seasoned performers must feel emotionally and financially engaged with the business outcomes of your organization. And decisiveness includes the willingness and capacity to take measured business risks. Enterprise-Level Planning Every organization⎯no matter how small⎯functions best with a strategic plan that derives from a corporate vision and mission statement. It is vital to develop and then to review actual progress against goals, objectives, strategies and action plans on a regular basis. Goals generally have 3- to 5-year timelines, whereas objectives have 1-year timeframes. All goals and objectives should be meaningful, measurable and achievable. Marketing The keys in the marketing area are staff and focus. You must stay focused on your company's core competencies as defined in your strategic plan when pursuing bid opportunities. Avoid the "shotgun approach" that leads to dilution of bid and proposal funds and human resources. In addition, ensure that there is a business development leader as well as a proposal development leader. The proposal leader should bring a strong command of proposal processes, in addition to knowledge-management practices.
Financial/Infrastructure Your organization must develop excellent banking relationships. Invest in robust accounting systems because timely and accurate financial status reporting is essential. Integrate systems, including a Human Resources Information System (HRIS), recruitment, accounting and procurement. Pursue external quality assurance certification and assessment (e.g., ISO 9001:2000, SEI CMMi). Consider hiring a chief administrative officer to integrate and manage the infrastructure people and processes.
Indeed, small businesses are faced with both challenges and opportunities when pursuing federal contracts. Plan, develop and implement effective processes early in your corporate history so that these become an integral part of your business culture by the time you are ready for full-and-open federal competition. Robert S. Frey is vice president for knowledge management and proposal development with RS Information System Inc., a minority-owned information technology, science support, engineering and telecommunications company in McLean, Va. He is the author of four editions of the book Successful Proposal Strategies for Small Businesses: Using Knowledge Management to Win Government, Private Sector and International Contracts (Boston: Artech). Frey also teaches proposal development and knowledge management at UCLA in Westwood, Calif. He can be reached at (703) 734-7800, ext. 213 or at .
