Getting Started Contracting with Government
By one estimate, there are 80,000 government agencies, federal, state and local, that purchase a variety of goods and services from the private sector. The aggregate value of these purchases is in the billions of dollars.
Your first move in the government sector should be to settle on exactly which of your many goods or services you plan on selling to government. At this point, you should become familiar with the NIGP, or the National Institute of Government Purchasing index. This is a listing of all the goods and services that government agencies typically buy. This will be your first indication if there is a government market for your company’s offering. You should also visit the website of any agency to which you wish to sell and click on the procurement tab to find what things that particular agency buys. This will tell you if that potential buyer needs your company’s offering.
You also need to determine where you wish to sell: nationally, regionally, only in the state in which your company is domiciled, or locally. There are advantages and disadvantages to each of these. for example, selling nationally opens up a huge market for you but could entail a great deal of travel the expense that will cut into your margin. If your company doesn't already have regional operations you could actually realize more profit selling locally.
You next should locate specific bidding opportunities.
There are several ways to go about this. One way is to contract with an aggregator. This is a company that will report to you periodically on which agencies have issued tenders for the goods or services that your company supplies. The drawback to this approach is expense. These reports are costly and most bidding companies will not have the bandwidth to respond to more that a fraction of the opportunities in the report. In addition, much of the information is repeated from report to report to report. So, you will be paying repeatedly for the same data and you will be paying for information that your can’t use or which is stale.
An alternative to an aggregation service is to retain a consultant. Make sure your consultant has hand-on experience selling to government not just other contractors. Experience selling in your vertical would be a bonus. This is a much more personal approach than using an aggregator. In the interest of full discloser, Chaddsford Planning provides this service.
A third approach, if you have the time and/or resources is to go it alone and contact thousands of government agencies yourself to determine if they purchase what you are selling and then to continue dialing for dollars until you find the right person who has purchasing authority and can buy from you.
The next step is to identify the requirement of the job. in order to for your potential customer to do business with you you will be required to submit a formal written proposal that accomplishes three things. 1) specifies exactly what you are offering, 2) specifies exactly what you expect in return, 3) shows precisely how your offer solves the agency’s problem.
It is a lot of work, but there is a lot of reward.