Winning government contracts has never been easy for most businesses. Recent research from American Express OPEN says typical federal contractors log 24 months and 4.7 unsuccessful bids before notching their first federal procurement victory. And now, under sequestration, small businesses are facing tighter federal spending and a higher level of competition from peers and larger firms than ever.
But the fourth quarter of the fiscal year that ends September 30 is a key period for winning business from federal agencies. One-third of all government spending typically happens in the fourth quarter, according to Deltek, a company that provides services to government contractors. Dona Storey, an American Express OPEN Advisor who helps small businesses navigate the procurement process, says Q4 is when government agencies are assessing their remaining dollars to potentially check off a few items remaining on the year's spending wish list. “Many small business contractors find that they can pick up a few hundred thousand dollars or even a few million dollars from various government customers during this period,” Storey says.
The period up to September 30 is a critical business development period for Lisa Firestone, president and owner of Managed Care Advisors in Bethesda, Md. Now is when her company, which provides employee benefits and disability management consulting and workers’ comp case management especially to public sector employers, aggressively markets its status as a pre-approved vendor on the General Services Administration Schedule.
“GSA Acquisition is especially attractive to the government during the fourth quarter when time is of the essence,” she says. “Having the right GSA Schedule Contracts and knowing how to use them effectively has been key to our company’s rapid growth in the public sector.”
Firestone says more than 80 percent of Managed Care Advisors’ current contracts were procured through the schedule. She attributes her business’s significant growth in 2012 and 2013 to having the right GSA Schedule Contracts and knowing how to use them effectively
Storey and Firestone offer this advice to small business owners on winning federal dollars during the fourth quarter:
If you are not on the GSA Schedule, team with businesses that are. GSA contracting rules state that large businesses must subcontract with small businesses if the federal contract is greater than $550,000.
Have your bases covered to move fast. Storey recommends checking for new solicitations, reviewing agency budgets to determine what work is unfinished and asking agency officials about upcoming projects that are likely to weather budget cuts. Then, says Firestone, be prepared to respond to multiple solicitations quickly and compliantly. Have your proposal teams organized, and have contingency plans in place since the fourth quarter is also a peak vacation season.
Bid on jobs you can deliver. In addition to the typical factors that are considered in making bid or no-bid decisions such as technical requirements, and competitive intelligence, make sure you factor in competing priorities and bandwidth, Firestone says.
Finalize contracts ahead of deadline. Although the fiscal year ends September 30, contract actions need to be finalized well in advance of that date, Firestone points out. So even though time is scarce, remember to do your due diligence before any communications or solicitations go out. “There is no ‘re-do’ when you miss a contracting opportunity,” she says.
Take sequestration pressures seriously. “Staffing hours are cut up to 20 percent where furloughs have been implemented,” Storey says. “Being able to anticipate and identify opportunities, being ready to respond and capture quickly and have your pricing competitive has never been more important.” And just because a current government contractor loves you and was willing to pay a bit more for the ‘best value, under sequestration the term LPTA or “lowest price technically acceptable” is quickly becoming the leading factor in choosing winners, Storey warns. “Make sure you and your teaming partners are ready to sharpen your pencils and provide the lowest possible price to hold your position; especially with those customers that you have worked so hard to cultivate,” she says.
Search for “sources sought” notices. Agencies post synopses on FBO.gov when they are seeking possible sources for a project. They’re not solicitations for work or even requests for proposal, but Storey says “sources sought” notices present a great opportunity to call attention to your firm’s capabilities. “These are part of a federal agency’s market research, and responses are often used to justify set-aside requirements. Keep in mind that this year lowest cost still rules over certification in many cases.”
Talk to the Office of Small and Disadvantaged Business Utilization. Check in with OSDBU staff at various agencies and remind them that you have a strong interest as well as the performance capacity to be able to quickly respond to any of their customers during the fourth quarter, Storey recommends.
Team with other business owners. Bidding jointly on federal contracts can help increase chances of landing larger contracts. According to American Express OPEN’s government contracting survey businesses that are involved in teaming have won 54 percent more prime contracts than the national average.