A roomful of small-business owners picked up a few pointers on soliciting federal government contracts Wednesday, as American Express OPEN, the small business division of the American Express financial services company, continued its annual Victory in Procurement program with a workshop at the Mission Valley extension campus of Point Loma Nazarene University.
The workshop was free, but its organizers hope the information is worth more than the time spent listening to advice from a pair of local government-affiliated entities and two business owners that have found success in government contracting.
With Denise Rodriguez-Lopez, an attorney and president of the procurement consultant firm KMJ Co., serving as a panel discussion moderator, NAVFAC Southwest‘s deputy for small business programs Lora Morrow and her counterpart at SPAWAR, Faye Esaias, gave the sizeable showing of business owners and managers a number of tips. Most notable among the discussions between them and the two small business contactors joining them in the panel — Mike Johnson, president and chief executive officer of communications technology supplier Lorimar Group and Eric Basu, president of Sentek Consulting — was the message of perseverance and preparation.
Morrow said understanding the solicited agency’s preferences and operating procedure for contracting should precede the submission of proposal.
“You have to know how each market operates, and different agencies may operate differently,” Morrow said.
She also said a small business’ best marketing material is its own proposal, suggesting that before submitting a proposal, businesses should download the publicly available proposal documents submitted to the target government agency from the previous year, so they may be used as a rough template of an agency’s proposal preferences.
According to Rodriguez-Lopez, who cited information from American Express (NYSE: AXP), a small business will fail an average of four times in federal government contract bidding before finally winning a contract.
“It takes years,” Rodriguez-Lopez said.
Debriefings offered with unsuccessful bids should be taken advantage of, she added, as they could help outline a plan for improvement with future proposals.
Further outlining the importance of not giving up, Johnson said jumping onto government contracts as a subcontractor can be a bit of a dance. But the Lorimar Group’s recent addition to a contract halfway through its completion proved to him that it’s far from impossible with the proper planning.
Being prepared for opportunity and to show a prime contactor the cost benefit of bringing in a sub, and having those figures in black and white, can make the difference, Johnson said, especially when the prime and its resources are not local.
Being aware of the time of year is also important, he added.
“If you start making proposals after ... July or June, you’re not going to get anything into contracting unless there’s an existing contract,” Johnson said. “You may be the best person out there … but they will not go to you when they can write it as a 2 cent task order on an existing contract. So you’ve got to be working this all year round.”
Johnson speaks from experience. That sort of situation recently happened at the Lorimar Group, he said, leaving the company off of a potential $700,000 contract it had spent a significant amount of time preparing. The work was simply assigned to the existing prime contractor, because the customer didn’t have money left in its budget to bring on a new contract, Johnson said.
A big part of the reason: the calendar.
With federal government contracting, the fiscal year begins Oct. 1 and ends Sept. 30. By late summer, government agencies are often in a frenzy trying to take advantage of the money they have left for the year, Rodriguez-Lopez said. If they don’t act fast to use it, they lose it.
The Victory to Procurement campaign was launched around the height of the economic collapse, as American Recovery and Reinvestment Act dollars were funding a large number of government agency projects. According to a late 2011 survey performed by American Express OPEN, small business contractors spent an average of $103,827 in time and resources seeking federal contracting opportunities in 2010, or 21 percent more than they did in 2009.
Yet the survey also found that government contract spending has remained relatively flat during the same time period. According to Michelle Thompson-Dolberry, American Express OPEN advisor on small business growth, Victory to Procurement was a strategy taken by American Express to find out what the successful small businesses were doing and to pass the information along in a way that could boost the economy as well as bolster both the strengths of small business and potential or current credit customers.
“American Express Open wants its customers doing well,” Thompson-Dolberry said. She added, however, that while the program has the potential to pad the financial service company’s own bottom line through its customers’ success, the program's main goal is to spur general small business opportunity and that the workshops are free and open to anyone.
“The government procures everything from paper clips to people,” Thompson-Dolberry said jokingly. “So if you’re anywhere in between that, chances are your product or service is purchased by someone in the government."
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