Selling to Uncle Sam can provide significant revenues for small businesses. And while agencies are required to establish contracting goals and handout 24% of all government buying to small businesses, these highly-coveted deals can be a long and arduous process.
Liz Lasater spent a year and $10,000 trying to get her company, Red Arrow Logistics, on a pre-approved list that would allow her to provide transportation and supply chain management services to the federal government. Unfortunately, Lasater was pursuing the wrong list. “I never made a penny on it,” she says.
These lists are part of the GSA Schedule. Businesses apply to be on a schedule list with The General Services Administration [GSA], the purchasing agent of the federal government. Each list is divided by the type of good or service a vendor provides. The schedules are available online and show who the general contracting officer is and which businesses already have "on schedule" status.
Businesses can scope out their competition to see what contracts they currently hold and prices offered.
Since her first experience, Lasater has successfully applied to be on the TMSS GSA Schedule. This time around, it took only 48 hours to get approved. In the last six months, the transportation and supply chain management company has worked with UNICORE and USDA and has wrangled about a dozen contracts worth $10,000 through placement on this list.
“My goal for 2011 is to bring in $250,000 through contracts from this list,” says Lasater.
Get Into a Small Business Preference Program
Another avenue to government contracts is qualifying for a small business preference program. Lani Hay gained “Service-Disabled Veteran-Owned Small Businesses status” for her IT company, Landmark Technology [LMT].
"Breaking into the saturated federal government contracting market as an IT company and competing with larger, more established corporations that had brand-name recognition was not an easy undertaking," recalled Hay. "LMT took advantage of all of the government set-aside programs to gain footing in the marketplace. It was initially the only value proposition LMT had to leverage as an unknown new startup."
By establishing her company as a small business preference program, Hay was able to grow LMT from a one-woman consulting firm to a multi-million dollar business in eight years and recently was awarded at half billion dollar contract with the Department of Defense.
Uncle Sam Won’t Come Knocking
Qualifying for a small business preference program or gaining acceptance onto a GSA Schedule gives companies more exposure to the government marketplace, but it doesn’t, , ensure a business will get contracts.
“What businesses don’t realize is that, to get a contract, you have to pick up the phone and sell. The government does not find you,” says Dick White, author of “Cracking the Federal Market: The Small Business Guide to Federal Sales.” And even then warned Lasater, “There are no guarantees that your business will get anything out of the process. Expect more failure than success.”
Part of the failure comes from the intricacies involved in getting approval to do business with the government. “I don’t suggest a small business get involved in this market without any help,” said Malcolm Parvey, federal contract consultant and co-author of “The Definitive Guide to Government Contracts.” His company charges up to $20,000 to find bids, put together competitive analysis, fill out paperwork and submit offers on behalf of his clients.
Businesses can also turn to public assistance offered by government organizations like the Small Business Association. Lasater of Red Arrow Logistics established a mentor-protégé relationship with the Federal Acquisitions Intern Coalition.
“The level of information you are required to produce and the detailed format guidelines can be overwhelming. The slightest error would disqualify someone,” said Lasater, “I was able to work with their (FAIC) resources in a bid response. I would never have been able to apply successfully without their help.”