Growing a Federal Contracting Business in Tumultuous Times
The federal government marketplace is facing a dramatic shift, driven by the maturity of the market and a new administration.
Most government contracting businesses are started by individuals with an area of expertise (engineering, information technology services, construction, public relations, accounting, etc.) or a passion (serve the warfighter, make the world a better place, inform the public, save the environment, etc.). Armed with some validation that there is a market for these skills and knowledge, perhaps by working for another government contractor or as a government employee, they strike out to establish or grow their own businesses.
The effort to start or grow a government contracting business of any kind is overwhelming in a steady marketplace. Legal structure/filings, accounting compliance, capital funding, facilities and hiring staff are just the beginning. When a firm tackles the business of federal contracting, there are the additional steps of registrations and socio-economic set-aside status that require even more paperwork and time.
The critical next step is the hunt for actual solid business opportunities. Which agencies are buying what the business sells? Who are those agencies currently buying from? Through which contract vehicles? At what price? How does a business distinguish itself? How does one identify and reach decision makers? Businesses that have won at least one federal contract have successfully answered most of these questions and defied the odds. In most cases, it was the founders who blazed this trail and won the initial contracts — then performed the work to fulfill those contracts.
But today, even well-established government contractors are challenged by uncertain budgets, changing agency missions and fluid priorities.
This is the time in the lifecycle of a government contracting business when the owners must make a decision. How can the business grow beyond the individual contributions and reach of the founders? How does one adapt to this changing marketplace and win more contracts? The next usual step is to hire additional business development capacity and expertise.
The traditional approach has been to hire a seasoned federal business development professional. That’s fraught with risk and expense, especially if that individual is expected to step into the shoes of one of the founders or key business line managers.
That manager or founder may struggle with defining business development expectations clearly, delegating authority or exhibiting the patience to allow sales and business development staff to learn, grow, develop relationships and produce results.
The federal procurement marketplace is also changing. According to Government Executive, 43% of federal contracting officers will retire between 2014 and 2018. With those retirements go long-term relationships that have benefitted incumbent contractors. This is bad news for the incumbents, but good news for other contractors.
The Office of Management and Budget also now requires more outreach by federal agencies to the vendor community prior to the issuance of solicitations. These outreach activities include industry days, small business conferences, sources sought notices and Request for Information. Federal procurement has become very event-driven.
Relationships are still very important and they are formed by participating in the events sponsored by the agencies. They are throwing a party (figuratively speaking) and expect well-informed vendors to show up. And, the combination of rapidly growing retirements of government personnel and the recent hiring freeze enacted by the new administration severely limits opportunities for federal contractors to have one-on-one time with decision-makers.
For those companies responding to these market changes and positioning to grow, smart government contractors are creating highly disciplined business development “engines” that leverage adaptive industry best practices, and the knowledge and skills of the owners and subject matter experts. They then bring in additional outside resources to expand capacity.
This business development engine consists of a structured approach. It encompasses gathering market intelligence on agencies, contract vehicles, opportunities and competition, executing action items related to the analysis of that data, following rules for determining whether to bid, choosing smartly when and how to team with others and following a disciplined marketing outreach program.
If designed properly, this business development engine consists of a blend of technologies, processes and people with varying levels of business, marketing and analytical skills. This innovative structure has proven to produce incredible financial results — and is scalable and repeatable — freeing the owners or managers to take on more strategic initiatives.
Gone are the days of the lone business development professional circling the beltway, sitting in lobbies and depending upon their friends for referrals. This has been replaced by discipline, process and results.
Gloria Larkin is founder and CEO of TargetGov, in Linthicum, and a national expert in business development in the government markets. Email [email protected], visit www.targetgov.com or call toll-free 1-866-579-1346 for more information.
The following information regarding awarded contracts can be used to develop prime contractor, subcontractor and teaming partner relationships on these and other opportunities. For more information, contact TargetGov at 410-579-1346.
- AAI Corp., doing business as Textron Systems, Hunt Valley, won a $9,352,070 contract from the Air Force Life Cycle Management Center for contractor logistics support and maintenance training services. www.textronsystems.com/contact-us
- Ausley Associates, Lexington Park; Avian LLC, Lexington Park; Eagle Systems, California; Naval Systems Inc., Lexington Park; and Sierra Management & Technologies, California; along with four other companies, won a $249,875,555 contract from the Naval Air Warfare Center Aircraft to provide integrated logistics product support, program management and logistics support services in acquisition and sustainment for the life cycle of specified weapons systems, system of systems, its sub-systems and support equipment. http://ausley.us/government/contracts, http://avianllc.com, www.eaglesystemsinc.net/#, www.n-s-i.us/views/contact.html and www.sierramgt.com/Contact/tabid/60/Default.aspx
- BAE Systems Technology Solutions & Services, Rockville, won a $24,387,949 contract from the Naval Air Warfare Center Aircraft Division for 568,551 hours of logistics services and incidental materials in support of the Naval Air Warfare Center Aircraft Division’s Special Communications Mission Solutions Division to support command, control, communications, computers and intelligence projects. www.baesystems.com/en-us/contactus
- General Dynamics Mission Systems, Laurel, won a $9,666,932 contract from the Army Program Executive Office Simulation, Training and Instrumentation for the Intelligence and Electronic Warfare Tactical Proficiency Trainer, a training system that simulates military intelligence warfighting equipment and the tools to replicate the necessary environment required to provide proficiency and sustainment training for military intelligence personnel, battle staff, system operators, collectors and analysts. www.generaldynamics.com/suppliers
- Grunley Construction Co., Rockville, won a $28,932,000 contract from the Washington Headquarters Services for major interior renovations required for administrative facilities including replacement of associated telecommunications systems. www.grunley.com/contact-us
- KBRwyle Technology Solutions, Columbia; and BAE Systems Technology Solutions & Services, Rockville; along with six other companies, won a $3,038,000,000 contract from the U.S. Army Space and Missile Defense Command for a research and development effort for the design, development, demonstration and integration, domain-one of space/high altitude and missile defense hardware and software solutions. www.baesystems.com/en-us/contactus
- PSI Pax Inc., California, won a $23,769,637 contract from the Naval Air Warfare Center Aircraft Division for the procurement of professional and management support services essential to the Combat Integration and Identification Systems Division. www.psipax.com/about/contact.html
- Smartronix Inc., Hollywood, won a $26,701,654 contract from the Naval Air Warfare Center Aircraft Division for services in support of the Naval Air Warfare Center Aircraft Division’s Special Communications Mission Solutions Division. These services will support implementation of telecommunication and related communications-electronics (C-E) systems to enable efficient information exchange of voice, video and data. www.smartronix.com/doing-business/small-business/Pages/default.aspx
- University of Maryland University College, Hyattsville, won a $16,236,452 contract from the Naval Supply Systems Command Fleet Logistics Center Norfolk Contracting Department for providing instructional undergraduate, graduate and post-graduate programs and education support services for the U.S. Navy, Marine Corps, Army, Air Force and Coast Guard in the U.S. Central Command and in the U.S. Africa Command areas of responsibility. www.umuc.edu
- URS Federal Services, Germantown, won a $9,009,645 contract from the Army Contracting Command for Army Prepositioned Stock 2 and for logistics support services, including maintenance, supply and transportation support. www.aecom.com/contact-us