Tag: Pricing Professional

CategoriesGeneral

GWACs: Why are they Important?

Posted on August 27, 2022

In an effort to acquire IT products and services more efficiently, the Federal Government has created Government-Wide Acquisition Contracts (GWAC). A GWAC is a contract between a commercial IT service or product vendor and the U.S. government that centralizes the procurement of IT solutions across multiple federal agencies. By consolidating the acquisition of IT services, GWACs enable agencies to take advantage of the government’s immense buying power. In turn, the government can pull from a pre-vetted qualified pool of contractors. There are currently ten GWACs managed by three agencies – the General Services Administration (GSA), the National Aeronautics and Space Agency (NASA), and the National Institutes of Health (NIH).

Beginning with a self-scoring evaluation system, federal contractors assess the products and services they provide and determine if they are eligible for a specific government contract. This system also allows agencies to compare prices and other factors before making an award. Those who meet the initial criteria get evaluated further to determine if they are qualified to get on the desired GWAC. This streamlined process saves agencies time and money, allowing for one in-depth evaluation rather than multiples for the same vendor.

There are three major types of GWACs: small business, set-aside, and industry. Small business GWACs are reserved for small businesses, as defined by the Small Business Administration (SBA). Set-aside GWACs are similar to small business GWACs, but they are specifically set aside for certain types of businesses, such as women-owned or veteran-owned businesses. Finally, industry GWACs are reserved for specific industries, such as information technology or healthcare. 

Benefits of Using a GWAC

There are many benefits to using a GWAC for both government agencies and contractors. Some of the most notable advantages include: 

  • Access to a larger pool of contractors: Since a GWAC is a master contract pre-vetted by the government, it gives agencies access to a larger pool of qualified contractors. This can be extremely helpful when an agency is looking for a specific type of IT service or product. 
  • Faster procurement process: The pre-vetted nature of a GWAC also means that the procurement process is much faster. Agencies can save significant time using a GWAC instead of going through the traditional RFP process. 
  • Increased competition: By using a GWAC, agencies can increase competition among contractors. This is because a GWAC allows multiple contractors to compete for the same contract. 
  • Greater flexibility: GWACs also offer agencies greater flexibility when procuring IT services and products. This is because a GWAC can be used to procure a wide variety of IT services and products. 

Why Do GWACs Matter?

When federal agencies need IT products and services, GWACs are the best-in-class contracts. Different than GSA schedules, GWACs don’t remain open for new vendors. Once the vetting process has closed, it stays closed for roughly a decade. This gives contractors on a GWAC a compelling advantage because they exist in a smaller pool of competition compared to the large number of contractors on SAM.gov. 

However, GWACs do not guarantee a straight path to success. GWACs are an extremely competitive niche; winning a contract is even more challenging. After spending countless hours and resources toward qualifying to be on a GWAC, success is determined by a contractor’s post-award processes.

Types of GWACs 

The government spent roughly 2.68 billion dollars on contracting through GWACs in 2011. This number rose to 2.68 billion dollars in 2021, proving that amount of GWAC contracts has increased.

  • 8(a) STARS III – A small business set-aside contract that provides flexible access to customized IT solutions from a large, diverse pool of 8(a) industry partners.
  • Alliant 2 – Offers artificial intelligence (AI), distributed ledger technology (DLT), robotic process automation (RPA), and other types of emerging technologies. It provides best-value IT solutions to federal agencies while strengthening chances in federal contracting for small businesses through subcontracting.
  • VETS 2 – The only GWAC set aside exclusively for Service-Disabled, Veteran-Owned Small Businesses (SDVOSB). Designed to meet diverse agency IT services requirements, including new and emerging technologies.
  • CIO-SP3 and CIO-SP4 – CIO-SP3 helps small businesses sell their IT products and services to the Department of Health and Human Services. This GWAC ran for ten years and had a $20 billion contract holder. CIO-SP4 is in the onboarding phase and plans to roll out in 2023. 
  • Polaris – New to the GWAC family, Polaris will be a small business governmentwide acquisition contract (GWAC) for acquiring customized information technology (IT) services and IT services-based solutions. Centered predominantly around small businesses. 

Why GWACs Are Important for Your Success

GWACs are a vital part of the government contracting process. They allow federal agencies to quickly and easily navigate the procurement process and enable federal contractors a more seamless route to sell their products and services to the government efficiently. This streamlined acquisition is unique to GWACs and remains an attractive alternative to federal agencies. Therefore, understanding GWACs is critical to your success if you’re a government contractor. By learning about GWACs and how they work, you can ensure that your business is positioned to take advantage of these essential contracting opportunities. 

Over the years, GWACs have become essential to any contractor’s portfolio. Soon, sustainable growth for IT contractors will require success on a GWAC. For contractors that lack the resources, partners, or consultants to compete for contract vehicles, a highly competitive market brings much more complication once their customers consider transitioning to a GWAC.

This is why research is so valuable and crucial for federal contractors. Contractors can spend months to years chasing unwinnable opportunities when inaccurate data is followed. If contractors are equipped with accurate information and insights from the start, they can save time and resources pursuing opportunities and contract vehicles that can actually result in a win.

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CategoriesGeneral

8 Reasons Why Most Contractors Fail

Posted on August 24, 2022

Almost every businessperson aspires to one day secure a federal government contract. After all, the federal government is the world’s largest purchaser of goods and services. Securing a piece of this pie would be a major accomplishment. But unfortunately, most businesses that contract with the federal government fail. In fact, according to recent reports, approximately 50% of all small businesses that contract with the federal government will go out of business within the first two years. So what’s the reason for this high failure rate? And more importantly, what can you do to avoid it? This blog post will explore the top 8 reasons federal contractors fail and how you can prevent them.

NAICS Codes Mixups

One of the most common reasons a small business fails as federal contractor is because they mix up their North American Industry Classification System (NAICS) codes. The government uses NAICS codes to classify companies according to their size and work type.

If you want to contract with the government successfully, you must ensure you’re using the correct NAICS code for your business. The proper NAICS code is vital because the government uses it to determine whether or not your business is eligible for specific contracts. If you use the wrong code, you could be inadvertently excluded from bidding on particular contracts.

To avoid this mistake, take the time to research the correct NAICS code for your business and make sure you’re using it correctly. Generally, a primary NAICS code with secondary ones can be applied. You can use the SBA’s NAICS Code Lookup tool to find the correct code for your business. Furthermore, obtaining an accurate primary NAICS code is vital because it can significantly affect the amount of money you make over the next three years.

Misunderstanding of the RFP Process

Another common reason federal contractors fail is that they misunderstand the Request for Proposal (RFP) process. The RFP process is when the government solicits bids from contractors and selects a contractor to award a contract.

Contrary to popular belief, the RFP process is not a “race to the bottom.” In other words, the government is not necessarily looking for the lowest bid. Instead, they are looking for the best value. Therefore, the government will evaluate all proposals based on several factors, including price, technical approach, and experience. To increase your chances of success, you must take the time to understand the RFP process and what the government is looking for.

Many contractors see the dollars set to be awarded rather than paying attention to the scope of the work. For example, if the government is only willing to pay $500,000 for a project, but your company requires $750,000 to complete it, then you need to re-evaluate whether or not bidding on the contract is a wise decision. Pursuing high-value contracts can only benefit if a contractor can win and perform. 

Lack of Past Performance

One other common reason federal contractors fail is that they lack past performance. Past performance is “the extent to which a contractor has satisfactorily performed similar work on previous contracts.” In other words, it’s a way for the government to gauge whether or not a contractor is likely to complete a project.

The government puts a lot of emphasis on past performance when awarding contracts. As a result, many government agencies will not even consider contractors with no past performance. There are a few ways you can overcome this obstacle. First, you can team up with another contractor with relevant past performance. This will increase your chances of being awarded the contract. Second, you can offer to do the work on a time-and-materials basis. This means that you will only be paid for the work you complete. Once you start winning contracts and building up your past performance, you’ll be in a much better position to win larger contracts.

Not Focusing on the Customer’s Needs

When it comes to federal contracting, the customer is always the government. So to be successful, you need to focus on your customers’ needs and ensure that you’re meeting their requirements.

One common mistake contractors make is assuming they know what the government wants. This can lead to a lot of problems down the road. Therefore, it’s essential to take the time to understand the customer’s needs and ensure that you can meet them.

Not Following up After the Submission of a Proposal

After you submit a proposal, it’s important to follow up with the government. This is often done through what’s called a debrief. A debrief is when the government sits down with you and tells you why you didn’t win the contract.

It’s necessary to take the time to attend these debriefs. They can be beneficial in understanding what the government is looking for and how you can improve your proposal for future opportunities.

Additionally, it’s crucial to maintain contact with the government even if you don’t win the contract. These contacts can be handy down the road when trying to win future contracts.

Failing to Understand the Acquisition Process

The federal contracting process is very complex, and there are a lot of rules and regulations that you need to follow. If you don’t understand the acquisition process, it will be challenging to win a contract.

One way to overcome this is by working with a professional who understands the acquisition process. They can help you navigate the complexities of the process and increase your chances of winning a contract.

Another way to learn about the acquisition process is by reading the Federal Acquisition Regulation (FAR). The FAR is a document that outlines all the rules and regulations that you need to follow when contracting with the government.

Not Having a Solid Marketing Strategy

To be successful in federal contracting, you need to have a solid marketing strategy. This strategy should include various methods for marketing your company to the government.

Some standard methods for marketing your company include attending trade shows, exhibiting at conferences, and writing articles for trade publications. Additionally, you can also create a website that’s specifically designed for government contracting.

If you don’t have a solid marketing strategy, it will be tough to win contracts. You must ensure you’re doing everything possible to market your company and get your name out there.

Failing to Manage Expectations

When it comes to federal contracting, it’s essential to manage expectations. This means setting realistic goals for your company and understanding what the government is looking for.

If you set unrealistic goals, it’s going to be very difficult to meet them. This can lead to a lot of problems down the road. So it’s important to sit down and realistically assess your company’s capabilities before setting any goals. Additionally, it would be best to understand what the government is looking for. This way, you can ensure that you meet their requirements and give them what they want.

These are just a few of the most common reasons federal contractors fail. If you can avoid making these mistakes, you’ll be in a much better position to win contracts.

Do you have any other tips for federal contractors? Share your thoughts in the comments below. 

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CategoriesGovernment Contracting 101

How to Ensure Your Company is Poised for Success in the Federal Marketplace

Posted on July 27, 2022
Team celebration for winning a government contract award

The Federal Government spends an average of $500B a year on products and services, providing business owners with the fuel and opportunity they need to make a difference in this country. However, many companies enter unchartered territory when they step into the Federal marketplace, ill-equipped to work in the arena of Government contracting. Many businesses are not prepared to enter the government contracting space because the Federal Government is very different from typical commercial customers. The Federal marketplace is unique and can be intimidating for business owners unfamiliar with the complex set of regulations and processes. However, once a company has navigated its way into the market, it can be a highly lucrative and reliable revenue stream. 

After your business has registered for an account on SAM.gov, acquired a UEI number, and identified relevant NAICs codes, here are five tips to further expand your business into Government contracting:

1. KNOW WHAT YOU OFFER

It is vital to pinpoint your business’s unique expertise, and understand how the Federal Government refers to your company’s products or services. Discovering the keywords and terminology used in the industry will help you establish communication tools such as a marketing plan, which will include your business’s solution offering and a capability statement. These tools will accurately inform Federal customers how your products or services will be a solution to their needs.

2. TRACK OPPORTUNITIES

The Federal Government sales cycle is slow, and therefore it’s best not to make your company’s sole focus one specific opportunity. Successful Government contractors target and pursue multiple potential contract opportunities and buyer relationships. This also helps your organization discover and shape the best options for your company. Your company should maintain a consistent pipeline that tracks all relevant contract information and changes. Government contract leads are available on several paid subscription services, but for those who are just getting started, visit SAM.gov, the official source for federal contracts worth more than $250,000.00 

3. CONNECT WITH CUSTOMERS

In the Federal marketplace, making reoccurring contact with decision-makers in your potential Federal customer base is a best practice. Therefore, it is essential to be knowledgeable of all the key players and know the best way to contact them. Once you have this information, research, research, research! Knowing what your Federal customers buy and how they buy will enable you to connect your product or services to their needs directly. With persistence, this information will help you refine your company’s messaging to grab the attention of decision-makers.

4. EXPLORE SUBCONTRACTING OPPORTUNITIES

It’s not easy to get your foot in the door, but one viable avenue worth consideration is subcontracting. Companies can indirectly serve the government by partnering with prime contractors. Not only is subcontracting a way to connect with a Federal agency you may not have previously worked with, but it is also a great way to expand your portfolio of past performance. One way to effectively pitch yourself as a subcontractor is to offer a cost-saving solution. Pinpointing a niche need your service can fill is also an excellent way to earn a subcontracting role. Once you find a prime contractor that needs what you have to offer, reach out and sell them on your capabilities!

5. DEVELOP A COMPETITIVE BID

Understanding the bid-proposal process is vital to your success as a government contractor, and even more important is having the resources in place to execute it. Build your bid-proposal team and distribute tasks that complement specific skill sets to achieve your overall goal. Once the proper resources are in place, stay compliant with the proposal requirements and bid a cost-competitive proposal. 

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CategoriesBusiness DevelopmentCaptureGeneralGovernment Contracting 101PricingProposal

Types of Federal Contracts

Posted on June 23, 2022

Federal contracts exist broadly between two categories: products/goods and services. The former includes almost everything from food to furniture and medicine to machinery. The latter includes professional services, research and development, management and administration, and consultancy. The majority of federal contracts, by dollar value, are awarded in the following sectors:

  • Facilities and construction, including real estate purchases and leases, building materials and services, etc.
  • Professional services, including financial, legal, public relations, marketing, and technical expertise.
  • Information technology, including hardware, software, consulting, telecommunications, and security, etc.
  • Transportation and logistics, including delivery, motor vehicles, support, and fuel, etc.
  • Medical, including health care services, pharmaceuticals, medical equipment, and consulting, etc.
  • Industrial products and services, including machinery, tools, and maintenance, etc.
  • Security, including state-of-the-art systems and real-time services, etc.
  • Human capital, including educational services and vocational training, etc.
  • Travel and lodging, including event management services and food and beverage supply, etc.
  • Office management and administration, including purchasing furniture and essential supplies, etc.

After classification based on industry sector, product, or service, there is further categorization depending on contract terms:

  • Fixed Price Federal Contracts
    • This type of contract is applicable for both goods and services. Open government contracts of this kind typically invite bids from eligible contractors or vendors. If it is a product, then a specific unit is preset for the pricing— such as by the carton, ton, or some other metric. For services, the pricing is typically per hour. It should be noted that fixed-price federal contracts may have specific clauses that could alter the calculation of billable amounts depending on relevant factors, such as quality or regulatory compliance.
  • Cost Reimbursement based Federal Contracts
    • Federal contracts for typical goods and services are usually fixed-price agreements. Cost reimbursement-based federal contracts are common when a fixed price is difficult to ascertain or predetermine. Research and development services, for example, are difficult to price at the outset. There are myriad variables in such contracts, especially in the deliverables. Hence, a cost-reimbursement policy is pragmatic for contractors and, to an extent, for the government.
  • Time and Materials based Federal Contracts
    • This type of contract is commonly used for services wherein select materials may be requisitioned for the deliverables. The service is billed hourly, and the cost of materials is added for the billable time. There is, of course, a price cap as agreed upon in the bid or proposal. Time and materials-based federal contracts are typical for tasks or operations spanning a relatively short period.
  • Incentive-based Federal Contracts
    • This should not be presumed as a contract that pays only incentives. Instead, it is labeled as an incentive-based federal contract due to a provision. Most incentive-based federal contracts are either fixed-price or cost-reimbursement agreements, with a bonus payable only if a certain quality and compliance standard or other criteria are met.
  • Delivery-based Federal Contracts
    • There are a few types of contracts wherein the deliverables are not precise or wholly defined. The variables in such cases may be time, materials, the type of product or service, and other factors. In these cases, it is practically impossible to have fixed price or cost reimbursement-based contracts. Hence, delivery-based federal contracts are the only feasible option. 

Benefits of Federal Contracts

There are myriad advantages of federal contracts. The most noteworthy benefits are:

  • Financial reliability.
  • The potential for growth and expansion.
  • Enhanced brand value.
  • Long-term business viability.
  • Special advantages.

Financial Reliability

The federal government is a reliable paymaster. Unless there is something seriously wrong with the deliverables, the federal government generally does not delay payments and is consistent as per the billing cycles. Moreover, unlike private or public enterprises, the federal government is not vulnerable to a cash crunch or probable bankruptcy. Hence, companies know they will be paid for their products or services.

Potential for Growth and Expansion

A company can grow and develop its expertise by working on federal contracts. This is primarily due to the stringent regulatory and compliance standards that force businesses to take their business practices to the next level. As a result, most businesses emerge as more efficient organizations after working on a few government contracts. Business expansion also becomes easier when a company starts winning federal contracts due to the infusion of reliable capital. 

Enhanced Brand Value

The importance of having the federal government as a client in a portfolio cannot be overstated. Every industry veteran knows the stringent regulations for federal contracts. If your company has won and delivered on a few federal contracts, your potential clients will be assured that you can and will live up to your commitments.

Long-Term Business Viability

The federal government is never going to be out of business. If your company continues to win federal contracts and deliver the products or services as per the terms, then your business will find its place in subsequent shortlists. The federal government alone can make a private or public business viable in the long term.

Special Advantages

There are federal contracts designed to give advantage to minority-owned enterprises, female entrepreneurs, and others who have been traditionally disadvantaged in various spheres of employment and business. These are called “set asides,” meaning the competition for that work is set aside for those businesses in that category.  

Challenges of Federal Contracts

While you can gain financial viability and grow your business with federal contracts, government contracting is not without its fair share of challenges:

Stringent Rules

As a business, you are undoubtedly familiar with your industry’s regulations. These will be in full effect while working in the federal government space. Additionally, there can be additional regulations or compliance standards for specific government contracts. These rules are quite stringent. Any company vying for federal contracts should be prepared to deal with stringent regulations.

Stiff Competition

Competition is perhaps the most daunting of all challenges concerning open government contracts. You have to prepare well to gain an edge over your competitors. First, you need access to an up-to-date federal contracts database. It also helps to have insights into government procurement contracts to understand what it takes to submit a winning bid.

Red Tape and Bureaucracy 

Red tape and bureaucracy have become more manageable in the last two decades. However, some bureaucrats will still slow down with paperwork, the various processes involved in doing business with the government. You must learn to endure the red tape and bureaucracy if you want to leverage federal contracts.

Intrusive Supervision

In most cases, the government is not unnecessarily intrusive, but businesses must learn to deal with supervision and oversight. On the other hand, intrusiveness can help companies improve their efficacy, efficiency, and compliance, so there is a silver lining.

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CategoriesBusiness DevelopmentCaptureGeneralGovernment Contracting 101PricingProposal

How to Decipher Federal RFP Terminology – A Beginner’s Guide

Posted on June 23, 2022

Identifying federal government contract opportunities can be daunting, especially given the alphabet soup of jargon out there. 

The RFx Spectrum

A government opportunity search may lead you to find an RFP, RFA, RFB, RFI, or RFQ. You may even find an RFT, although the federal government rarely uses it (It’s more common in Europe). RFx is the collective term for the entire spectrum of these acronyms. 

An RFP is a Request for Proposal; RFA, a Request for Application; RFB, a Request for Bid; RFI, a Request for Information; RFQ, a Request for Quotation; and RFT, a Request for Tender. RFPs, RFAs, RFBs, RFQs, and RFTs are all similar in that they are seeking proposals or bids. RFIs, on the other hand, are simply seeking information and do not include a bid element or financial quote. 

Deciphering RFP Terminology

Once you discover an opportunity, you may find the proposal terminology confusing. However, understanding the jargon is key to creating a comprehensive, high-quality proposal response.

There are many terms and phrases used in proposals that are in keeping with their literal meanings. A few common examples are “agreement,” “bid,” “best value,” “period of performance,” “evaluation criteria,” “confidence ratings,” “past performance,” “compliance,” and “assumptions,” among others. However, other terms are not so clear – especially when there are a plethora of acronyms.

Proposal Acronyms

The government uses hundreds of acronyms for their various agencies and proposal types, instructions, pricing details, and performance ratings. 

Once you get through the “alphabet soup” of acronyms, there is no shortage of other confusing terminology you need to understand to formulate your best proposal response. Here are a few common terms used in government proposals:

  • “Issuer” is the issuing authority. Proposals are not always issued by the agency or office seeking the product or service. For example, a government agency may appoint a particular department or outsource the proposal process.
  • “Set-Aside” is where the government limits competition for specific contracts to small businesses and certain types of small businesses, such as Woman-Owned Small Businesses (WOSBs), Veteran-Owned Small Businesses (VOSBs), Service-Disabled Veteran-Owned Small Businesses (SDVOSBs), 8(a), etc. Those contracts are called “small business set-asides,” and they help small businesses compete for and win federal contracts.
  • “Executive summary” is a brief overview highlighting the critical elements of a proposal. It is different from a cover letter because it contains a brief synopsis of the salient points in your proposal. Evaluators typically read the executive summary first, and will stop there if not incentivized to read further. Therefore, make it a compelling summary of what is to come in your proposal. 
  • “Lifecycle cost” looks at the total expenditure for a product. It assesses the total cost of an asset over its life cycle, including initial capital, maintenance, and operating costs. A proposed product should have a lifecycle cost lower or up to the current expenditure of the current contract. Otherwise, a government department may prefer an existing contract renewal. 
  • “Spend analysis” is an ongoing assessment analyzing all data related to the procurement. The objective is to enhance efficiency and ensure compliance. Spend analysis is a practice used by both the procurer and the contractor.
  • “Preference” is a set of project-specific advantages available to contractors in a specific location, offering a particular quality of product or service and/or possessing some special business classifications.
  • “Qualified bid” is a proposal response wherein a contractor explicitly exempts itself from the eligibility criteria or prerequisites. This limitation or condition may constitute grounds to disqualify the bid.
  • “Qualified vendor” is a contractor meeting all the prerequisites or eligibility criteria for an opportunity.

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