Tips from an Insider

Selling to the federal government has never looked more appealing. Think about it: the government is recession-proof, and unlike commercial buyers, it’s required by law to pay its bills on time. One example of this marketplace’s amazing growth is the Department of Defense, whose budget will increase by $50 billion in 2003-the largest increase in 20 years.

Now that I’ve caught your attention, you may be wondering how your organization can get in on the action. Fortunately, it has never been easier. Federal procurement reform initiatives-put in place in the mid-1990s-are working. These initiatives, aimed at streamlining the buying process, have made selling to Uncle Sam a less harrowing experience. A significant portion of federal buying is accomplished using new "commercial acquisition" rules, which allow the Feds to act more like commercial entities when buying.

The emergence of government-wide acquisition contracts (GWACs) has taken much of the sting out of selling goods and services to the government sector. Most of the contracts are negotiated using the simplified commercial acquisition procedures and allow more than one agency to buy from contractors. The GWAC has established itself as the preferred contract for most agencies in the General Service Administration’s (GSA) Federal Supply Schedules program.

These GSA Schedule contracts allow an organization to establish a "catalog" price list with the federal government. All federal agencies, quasi-governmental organizations and numerous support organizations such as the United Nations and the Red Cross are permitted to buy from them. State and local governments also are recognizing the tremendous benefits of these contracts, and several have adopted them as an approved price list. Among their more attractive features, these contracts:

• Establish prices based on how much something was sold for versus how much it cost to produce it.
• Eliminate the need for complex cost accounting systems.
• Vastly shorten the government’s buying cycle.

Before 1995, the GSA Schedules program consisted mainly of products. When procurement reform redefined "commercial items" to include services, GSA added information technology (IT) services to the IT products schedule. Sales under the Schedules program have exploded over the past five years, swelling from a fairly stagnant $5.6 billion in 1997 to a staggering $17.3 billion in 2001 (during the same period, the average procurement time dropped by 40 percent). GSA sales projections for the next three years indicate continued growth of more than 10 percent per year.

You may be convinced that selling to the government is the last great frontier and that GSA Schedules are the way to get there. Well, yes and no. The Schedules program is only the beginning of your company’s courtship with the Feds. Indeed, being on the Schedule has no value until an agency places an order. It is only a "hunting license." You still must find an agency with money that needs one of your products or services, and that is no small task. The federal government is huge, so landing a contract will take time-but it can be done.

Tips for Landing Contracts:

This article is excerpted with permission of Washington Flyer and The Greater Washington Initiative. Please see the entire supplement at www.greaterwashington.org