Winning federal government contracts – An Insider’s advice: Entrepreneur MBA Podcast 2.5
Eric Coffie, a minority-owned business owner, has seen it all when it comes to bidding and winning government contracts. Whether those bids are with the state or federal government, Eric shares his insider’s knowledge from his vast experience running his own steel structure construction business to his current company, Govcon Giants, that helps companies win government bids.
On today’s Entrepreneur MBA Podcast, Eric talks about how companies, both current federal contractors and those new to federal contracting, can win more contracting opportunities.
Summary of Podcast:
- An insider’s advice about winning government bids
- Bidding on government contracts – getting started
- Where can you learn about bid opportunities
- Contacting a state or federal government specialist called a PTAC
- Being patient, recessions and Covid-19
About our Guest, Eric Coffie
Eric graduated from the University of Florida with a BS in industrial engineering and he spent his early years working on government contracts for various construction companies. It was this early experience that showed him he had a real skill in winning government bids. Eric then went on to start his own construction company, Evankoff, which specialized in the construction of industrial and aviation structures. Eric now teaches, consults and contracts with, companies that wish to open a government contracting division. Govcon Giants is now the top-rated channel on Youtube for people wanting to learn how to land major government contracts. Eric is also a prolific podcaster on all podcasting channels.
About our Host, Stephen Halasnik
Stephen Halasnik is Managing Partner of Financing Solution. Financing Solutions is a leading provider of instant Lines of Credit to small businesses. Many of our clients are government contractors who use their Line of Credit for federal contract financing. The
Line of credit program is fast, easy, inexpensive, and costs nothing to set up making it a great cash backup plan. The time to set up a credit line is when you don’t need it.
Insiders advice – Winning federal government contracts for small businesses
- Once you figure out the government bidding and contracting process opportunities invariably appear. Given the sporadic nature of government contracts, it’s great to have a commercial AND a government division, they often play off each other during recessions and expansions.
- Working with government agencies can be really frustrating but if you have the tenacity, it can be a fantastic marketplace. The government is looking for solutions to their problems, show them the solutions they want and you can have a great business relationship.
- You have to understand the rules of the game and how it’s played.
- Subject matter experts save the government money – differentiate your company by being that expert.
- On federal bids or a request for proposals or rfq’s (request for quotes), the government cares about value, quality, and understanding. They don’t want any problems after the purchase. Price is never their top concern.
- Many times the government will give you small test projects to see how you do.
- When your chance comes, you must deliver by adding real value.
- The more you understand a project and the Contracting Officer, the better your chances of winning the bid.
- You should be tracking opportunities and developing strong relationships with the person/division that will be putting together a bid early in the bid’s life cycle.
- The GSA schedule is where the government announces upcoming bids and rfq’s. GSA stands for Government Services Administration.
- Understand your product/service and the government’s needs so you can educate the person writing the bid specs. This will help you look like an expert in the field and allow you to influence bid requirements to the advantage of both the government and your company.
- The government fiscal cycle is October 1st to September 30th.
- In sole-source contracts you are required to show your costs, the government allows a profit markup on those costs.
- The government is always seeking new vendors. They do market research when a product/service is needed because they don’t want to keep going back to the same vendors.
- Because of the expense, companies with under $5 million in yearly revenue typically don’t hire consultants to help them with government contracting. They do, however, taking online courses with Eric Coffie and Govcon Giants. Check out Eric’s Youtube channel, it is packed with useful information.
- Eric has trained students looking for 1099 commission jobs – perfect for helping smaller companies go after government bids.
- Don’t be an aggressive salesperson, be consultative. Learn, ask questions, be patient. You are going to be upset when you lose a bid so learn to be patient.
- To be a successful government contractor (and get more opportunities), you will need to show good consistent past performance.
- A great way for small businesses to get started (and get some revenue) is to work on government contracts as a subcontractor through a prime contractor. A prime contractor is a company that works directly with the government and manages all its subcontractors. To be a prime contractor you must first register your business with System for Award Management (SAM)
Getting started to bid on government contracts
According to Eric, if you want to sell to the government the first question you need to investigate is “Does the government buy what I sell?” The next question is “how” do they buy my product or service. These seem like easy questions to ask but many people in the government will want to give you general information but not specific answers. If you don’t ask the right questions you won’t get useful answers. You need to ask well-researched questions, the internet isn’t very helpful with getting you the answers you need.
The questions you will be asking are important because they will help you determine if there is a market for your product/service and how you will compete for the business.
Before you contact someone at the government do your research.
Where can you see bids to learn? SAM (System for Award Management) is the official website
About a year ago, the Federal Government released a new website called beta.sam.gov to replace fbo.gov. The hope is that it would consolidate government websites, such as fedbizopps, while promoting Federal contracting opportunities.
The US government spends over $555 billion dollars a year on goods and services and is the largest buyer in the world. Even with all that buying power, the government often does not have enough companies bidding on their projects.
By looking at bid opportunities, you can get a sense of whether your company can compete and win but just remember that beta.sam.gov (system for award management ) only tells one side of the story. The ultimate winner of the bids has probably brought more to the table than just their product or service. They are bringing knowledge and value-add, that’s your “ace in the hole” if you are really good at what you do.
Let your research guide your activities going forward and always keep in mind that the government rarely goes out to bid for exactly what you make.
Contact a state or federal government specialist called a PTAC
PTAC (Association of Procurement Technical Assistance Centers) are paid for by your tax dollars and have offices specifically set up to help you learn about contracting opportunities. The PTAC contracting officer will be able to answer many of your questions and also point you in the right direction. They often recognize talent or capability that is high demand by the government and will make recommendations to key people they know if they believe you can help them.
PTAC representatives can be instrumental in helping you get in touch with the right people/offices regarding your product or service. Keep in mind that PTAC representatives deal with hundreds of people weekly and you want to be prepared to use their time efficiently.
Selling to PTAC, and all government employees in general is not like selling to the commercial market. They don’t like hard-sell tactics that are typically used in the business to business marketplace. The government/contractor relationship is much more consultative – you are diving deep into the government’s needs and adding value with your extensive knowledge.
Government employees want to know that you are unique and an expert in your field and can bring significant value to bid or sole source situations. They also want to build a trusting relationship.
In rpfs and bids, it is never the cheapest price that wins the bid but the company that the U.S. Government feels brings the most value and can deliver. They do not want unexpected problems on the back end.
The SBA or Small Business Administration is a good resource
THE SBA can be a good resource to help you learn more about government contracts and the procurement process. They offer a step by step contracting guide, contracting development program, and counseling about federal business opportunities.
There is also another website called SBA sub-net which is a Subcontracting Network System that bridges the gap between businesses seeking small business subcontractors and small businesses seeking contracting opportunities. This could be a good avenue for a smaller business to start doing government work without having to complete an rfp.
However, like all resources, you have to really dive in to find the person or information that can give you the inside scope.
Being patient, recessions and Covid-19
The government is always looking for new contractors in the market so don’t listen to the naysayers about the government being impossible to work with. It is Eric’s belief that the government doesn’t get the best companies applying for their bids so there are plenty of opportunities for good companies.
A division in your company that derives revenue from government work can be an incredible advantage during recessions to offset your commercial work.
It recently took Eric 18 months to win a major contract and that’s with all the experience he has winning government bids.
The one thing you should know is that during a recession such as the one caused by Covid-19, there are typically many of companies that will try to win government bids.
Some of that might work out to your advantage depending on what you sell. Right now 29% of the whole budget is being spent on Corona Virus needs and 50% of the bids are being awarded through sole source because the government really needs the product fast.
Because of the urgency and issues due to Covid-19, Eric believes that a business has a much better chance of winning business superfast. As fast as a month but it depends on what you are selling of course.
Government work can be really frustrating to work with but if you have the tenacity, it can be a fantastic marketplace. The government is always looking for solutions so if you can show them great solutions to their problems then you can have a great business relationship and many opportunities.
Additional FAQ’s about bidding on government contracts
How can I get financing if I win a federal contract?
Getting PO government financing, business loan or government factoring for companies that are doing work for the federal government can be challenging because the lender can not put a lien on government funds. Financing Solutions works with many companies who do work with the federal government because its line of credit requires no liens, no collateral, and no personal guarantees. Plus the credit line is easy to get in place.
How can I bid on government contracts?
You first have the learn about the government contracting process. A good first step is to learn all you can before calling the PTAC or Association of Procurement Technical Assistance Centers. Three good websites to begin your learning process are the SBA’s Contracting website, the System for Award Management Website, and Govcon Giants.
Why does the government sometimes use no-bid contracts?
Contracting officers will sometimes use no-bid contracts due to emergencies or when it is obvious there is only one vendor that can deliver the product or service. As of 2020 due to the Coronavirus (covid-19) pandemic, 29% of the products/services purchased were no-bid contracts.
How can I find government contracts to bid on?
How do I find government contracts for my small business?
Prime contractors are registered with the federal government and are always looking for small businesses, minority-owned businesses, and women-owned businesses to work on their awarded contracts. You can find more information about becoming a subcontractor on the GSA subcontracting website.
What makes government contracts unique?
To begin with, most government contracts are won through a bidding process but there are a few contracts awarded based on sole-source. Rarely are federal contracts awarded to the lowest bidder but to the company that understands what the government is trying to do, has a product or service that meets or exceeds the rfp requirements, has a price that is reasonable and has a history of delivering on time.
How can I find government contracts already awarded?
USAspending.gov is a good resource to see any past contract awards and has an extensive drill-down search capability. If you are thinking of bidding on future federal government contracts you can use this tool to look at past awards learn more about what the government needs and what your competition is like.