Successful businesses don’t just follow the request for proposal (RFP) process to win business. Marketing to government agencies, similar to marketing in the commercial sector, is all about building relationships. And just like in the commercial sector, government buyers purchase from people and companies they know and trust.
Building a reputation as an expert in your industry, building relationships with potential customers and partners, and getting face time either at industry events or meetings are all as vital in government business as they are in private sector sales. First, however, it’s essential to recognize some of the rules and limitations you have due to acquisition regulations.
Once an RFP is released, government communications and interactions with the industry are very restricted. One-on-one discussions with the government post-RFP are generally not possible, so it is critical to establish relationships and build trust long before a solicitation is released.
When the federal government needs to acquire a new product or service or has an expiring contract for a product or service it intends to buy again, it will release an opportunity for a bid or a request for proposal (RFP). Therefore, understanding the bid or RFP and preparing to answer it are essential to proposal management.
Proposal management is complex, but well-written, compliant proposals can help make small businesses competitive in federal contracting.
After winning contracts, businesses move into the contract execution stage. Program and project management principles are fundamental when executing government contracts. The government also uses these principles to prepare programs and initiatives.
Compliance and Ethics
Like in the private sector, public sector contracting is governed by an essential set of rules. The government and its contractors must follow numerous laws and regulations, such as the Federal Acquisition Regulation (FAR) and Procurement Integrity Act (PIA).
The regulations that guide government agencies and contractors include the FAR, PIA, and Defense Contract Audit Agency (DCAA) cost accounting standards (CAS). The FAR consists of sets of regulations issued by federal agencies to manage the process by which the government purchases goods and services.
Contractors must avoid conflicts of interest, improper influencing of contract awards or federal employees, and other improper appearances and actions. Small businesses must also follow these rules. In addition, general government ethics guidelines have historically called for a high degree of public trust, a high standard of conduct, complete impartiality, and a lack of preferential treatment.
For certain types of contracts, agencies will require a company to have an adequate accounting system. “Adequate” in this case means capable of accounting for the direct and indirect costs associated with the contract and able to live up to the cost reimbursement requirements of Federal contracts. As a contractor, you can be audited at any time – even before a contract is awarded. To pass a pre-award audit, you must have an “operable” accounting system (although it does not currently have to be in use). In addition, you must be able to demonstrate this new system to the auditor and be ready to implement it before incurring any costs on the government contract.
Here are some of the areas your accounting system will need to handle to pass a pre-award audit:
» Segregation of direct, indirect, and unallowable costs
» Job cost accounting
» Indirect cost pools and allocation bases
» Indirect rate computations
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