Introduction

The United States Government alone spends approximately $200 billion annually on various products and services, yet each year, thousands of contracts totaling billions of dollars bypass small firms that do not know about or understand government procurement. The Department of Defense (DOD) is the largest, single purchaser in the federal government and the combined government agencies buy just about every category of product and service available. For a business looking to sell to the Federal government, there is probably some agency in need of your product or service.

The Federal government is ready to do business, on a competitive basis, with qualified companies that can supply needed products and services. These agencies are particularly interested in bringing small businesses (SB), small disadvantaged businesses (SDB), and women-owned businesses (WOB) into to the supplier chain. In fact, Federal agencies have goals for awards to these businesses. Companies interested in selling to the Federal government must help themselves by learning how the government conducts business.

Recent changes in the Federal Law, have had an unprecedented impact on the procurement process. The major changes are the shift to electronic commerce, more opportunities for small businesses, the introduction of a government credit card and the purchase of commercial end-items and components. This means that there are fewer differences between your commercial business and selling your products and services to the government.

The basic principles that you now follow in the commercial business arena to sell your products and services generally apply when selling to the government. Especially appropriate for establishing and keeping a good working relationship with the procurement activity and/or individual buyer. Learn both the needs and the buying practices of your potential customer. Follow all leads where there is an opportunity for your product or service. With a little patience and a lot of persistence, you can secure a piece of the Federal government’s purchases.

Soliciting and Contracting

Regulations concerning aspects of Federal procurement made with appropriated funds are published in the Federal Acquisition Regulation (FAR). These regulations were designed to unify all procurement practices, forms, and requirements. It also allows each major agency to issue supplements containing regulations unique to that agency.

Micro-purchases are defined as any purchase of $2,500 and below and can be made without obtaining competitive quotations. Purchases in this category are open to small and large businesses. More and more of the smaller dollar requirements are being purchased via purchase cards (also known as the IMPAC card). If you can accept a purchase card, please let your government customers know. If you can’t accept credit cards, you may want to investigate this option with your bank. Some activities may provide you with a listing of the purchase card holders to whom you can directly market your products or services. Designated credit card holders have the discretion, when purchasing under the $2,500 threshold, to go to almost any outside source to make a purchase.

Simplified purchase procedures apply to acquisitions over $2,500 and up to $100,000. Simplified purchases are set-aside for small businesses. The business submitting the successful quotation under these procedures is issued a purchase order and performance of the order constitutes contract acceptance.

Large purchase procedures (those purchases over $100,000) are required for any acquisition over the simplified acquisition threshold. Procurement by sealed bidding begins with an IFB (invitation for bids) which contains the information needed in order to prepare and submit a bid. All bids are submitted on a standard form that must be received by a certain time and date. The bids are opened in public and the contract will be awarded to the responsive and responsible bidder that offers the best value to the Government.
As used above, the term “responsive” means that you must quote in accordance with the terms of the solicitation, with no exceptions. The term “responsible” refers to the determination of your responsibility to perform in connection with a particular solicitation when you are the apparent low bidder. To be found responsible, you must be able to demonstrate (1) adequate financial resources; (2) compliance with the delivery requirements; (3) prior satisfactory performance; (4) a satisfactory record of integrity and business ethics; (5) adequate management and technical skills; (6) adequate facilities; and (7) eligibility to otherwise receive an award.

Getting Ready

It is very important that you first know what product or service you are selling to the government. There are different marketing strategies for different customers within the Federal government for each product or service.

As discussed above, some opportunities are reserved for small businesses. The government sets business size standards for each industry based on Standard Industrial Classification Codes (SIC). Each solicitation usually contains specific SIC and size standards for that particular procurement.

In addition, the Government places special emphasis on increasing participation by small disadvantaged businesses. This is accomplished by setting aside certain amounts for these businesses. The Small Business Administration (SBA) also maintains a program called 8(a) Business Development Program [Link to Federal Procurement Assistance Programs]that assists small disadvantaged businesses. The Government also encourages large prime contractors to subcontract with small and disadvantaged businesses.

More and more businesses are owned and operated by women. Although there is no legislative authority to restrict competition to woman-owned businesses, various agencies have established “goals.” The Department of Defense (DoD) has a very good web site for woman-owned businesses. SBA also has web site for woman-owned business. Some agencies require large prime contractors to have goals for subcontracting to women-owned businesses.

Finding the Opportunities

There are resources to help determine what agencies need your product or service. From accessing information via electronic commerce to reviewing the government’s daily publication of procurement opportunities, small businesses can obtain current information on the needs of the federal government.

DoDBusOpps.com is a web site by DoD and the Joint Electronic Commerce Program Office. At DoDBusOpps.com you will find an exhaustive listing of DoD solicitations for the Army, Navy, Marine Corps, Air Force and other agencies and sub-components. This single point of entry will help you simplify your searches and assist you in identifying opportunities for your company within DoD. It will also provide links to information, resources and other DoD electronic business and electronic commerce sites you need to access to compete for business.

You can identify and contact the small business specialist at the various agencies. Within the DoD, there is a listing of Small Business Specialists. At this web site, click on “Publications” and then click on “Small Business Specialist,” which is sorted by state. It lists the small business specialist at each DoD buying activity. You may call these individuals and request information or arrange for an appointment. They can provide helpful information on how to market your product/service within their activity. They may also be able to provide other information that may be available and helpful to you such as procurement for lists of purchase card (credit card) holders, organization charts, and other general information on their activity.

Also, subcontracting opportunities are available with DoD prime contractors. A listing of these prime contractors can be found at the above web site, except click on “Subcontract Opportunities with DoD Prime Contractors” after clicking on “Publications.”

If you have retail items your are interested in selling for resale in the DoD, the Army and Air Force Exchange Services, Navy Exchange, and the Marine Corps Exchange are possibilities.

Some bid opportunities may be listed in the Internet or on electronic bulletin boards.

DoD and other federal agencies are expected to conduct many simplified acquisitions ($2,500 to $100,000) via EC/EDI in the near future. To take advantage of these electronic awards, you must register through an approved Value Added Network (VAN) in order to gain access to FACNET. The local Electronic Commerce Resource Center (ECRC) can provide assistance on doing business with the government electronically.

The Commerce Business Daily (CBD) contains brief announcements about solicitations for upcoming procurements as well as actual solicitations for commercial items. Requirements for items over $100,000 are listed whereas requirements from $25,000 to $100,000 are not listed if they are advertised via FACNET. Announcements about solicitations below $25,000 may also be listed if a purchasing office expects few or no bids. Solicitations issued through the CBD will be the only notice issued for bidding purposes. In addition to the solicitations and announcements for upcoming procurements, the CBD lists recipients of contracts previously advertised, as well as some details about the winning offer. This is to allow small businesses the option to research subcontracting opportunities.

The primary central purchasing agencies are the Defense Logistics Agency (DLA), the General Services Administration (GSA), and the Veterans Administration (VA). Other agencies also purchase a variety of goods and services from vendors throughout the country.

The Defense Logistics Agency (DLA) buys millions of different items for the Department of Defense (DOD) activities through supply centers that manage day-to-day procurement and logistic operations. These supply centers forecast demands, process requisitions, award contracts, and monitor inventory levels.

The General Services Administration (GSA) contracts for a large volume of goods and services on a worldwide basis for Federal civilian agencies, the military, the Federal courts, and the US Congress. Examples of GSA awards include office supplies, paints, construction, training services, and computer-related supplies and equipment. Another good source of information relates to the Electronic Posting System (EPS).

The Department of Veterans Affairs (VA) operates a nationwide system of hospitals, clinics, regional offices, data processing centers and national cemeteries which require a broad spectrum of goods and services. Goods and services are purchased on a national, regional and local level. Examples of goods and services purchased include medical, pharmaceutical, and laboratory supplies and equipment, laundry services, and building maintenance and repair.

DoD spends a large portion of all federal contracting dollars for acquisition and support of sophisticated military hardware systems. Although there is a continuing decline in DoD acquisitions, it will continue to be the largest single purchaser in the foreseeable future. All military bases can purchase goods and services directly from vendors as needed for day to day operations. Military bases in North Carolina have web sites that you can visit and learn more.

Other non-military facilities are considered civilian agencies. They include such organizations as the Department of Justice, Environmental Protection Agency, National Air and Space Administration, and Department of Energy. All these agencies, and more, contract out for an assortment of products and services. There is one web site called the “Federal Acquisition Jumpstation” that will lead you to all government agencies.

Many federal agencies hold small business fairs that emphasize how to do business with the government and provide information regarding their program activities. Some have the added feature of making on-the-spot purchases from small business attendees.

Regardless of your product or service it is important that you do not neglect the very large secondary market of subcontracting. This is a multi-billion dollar market. You should investigate potential opportunities with prime contractors. Many of the Federal government’s requirements may be beyond the scope of a single small business and the prime contractors are encouraged to subcontract and team with small business concerns.

After you have identified your customers, researched their requirements, and familiarized yourself with the procurement regulations and strategies, it is time to market your product or service directly. Present your capabilities clearly to the various activities and prime contractors to whom you are marketing. Realize that, like you, their time is valuable and if the match is a good one, you can provide them with a cost-effective, quality solution to their requirements.

The PTAC can also provide information regarding procurement assistance programs and information sources and registrations in various Federal data systems.

The core of the assistance program is free, confidential, one-on-one counseling. PTAC counselors located in North Carolina can provide assistance in such areas as:

• research contract award histories
• understand solicitation requirements and terminology
• locate specifications and standards
• register with Central Contractor Registration (CCR)
• explain how the federal government uses electronic transactions
• search government databases to identify opportunities for your product or service