Real Small Business
There is a lot of detail work involved in preparing a bid or proposal for the federal government. Because government contracts must meet specific legal criteria, bids must be filled out flawlessly. Submitting a form with a set of numbers missing, or sending it to the wrong agency may end your chances for winning a potentially lucrative contract.
Before you get involved in the bidding process, take some time to lay the groundwork for successful bidding. Click on the following tips to learn more:
Know your SIC code
There is a Standard Identification Classification (SIC) code for every category of business the government deals with. Each SIC also shows a size category for the purpose of determining what the government considers to be a "small business" within that industry. Make sure your business falls within the definition of "small" for your SIC. You can get a list of SICs from the SBA.
File SF 129s
Filing a Standard Form 129 gets you on a bidders list for individual government agencies. Fill one out for every agency you're interested in submitting proposals to. You can't get on the list of bidders without this form and you must file a separate form for each contracting office because they rarely use the bidders lists of other agencies.
Get a DUNS number
DUNS stands for Data Universal Numbering System. Your DUNS number identifies your individual business and lets the government know your location. It is required for any company doing business with the government. To get one at no charge, call Dun and Bradstreet at 1-800-333-0505.
Consult the U.S. Government Purchasing and Sales Directory
This publication from the U.S. Small Business Administration lists products and services bought by the federal government and tells which agencies buy what. It also gives the proper purchasing offices to be contacted. Doing your homework with this book will save you money and time by guiding your marketing efforts to the appropriate agencies. Copies of the directory are available through the Government Printing Office at 202-783-3238. The stock number for the Directory is 378-8310-82-13. You can also get a copy from your local SBA office or check the SBA's Web site.
Meet your SBS (Small Business Specialist)
Once you've identified all the government agencies that are your potential customers, begin introducing yourself to their small business specialists (SBS). Most procurement offices have such a person, usually in an office known as a SADBU (Small and Disadvantaged Business Unit). SADBUs are among your greatest allies in marketing to the government because their mission is to recruit new small and disadvantaged business owners and to help them learn how best to do business with their facility.
Utilize a procurement vehicle
The term procurement vehicle refers to a pre-negotiated contract between a vendor and a government agency. There are several types of vehicles, but the bottom line for each is that when you've got one, you have guaranteed certain conditions (price and payment terms, warranties, delivery dates, etc.) to the government. There are many different types of vehicles, the most common are Blanket Purchase Agreement ( BPA); Indefinite Delivery, Indefinite Quantity (IDIQ); and GSA Schedule. The price paid for your product will vary according to the terms of the procurement vehicle you're selling with and the quantity of product you are selling at one time. If you're not on a procurement vehicle, you're submitting bids in an open market and it could be a long time before a government buyer has the time or inclination to take a look at your business. A tip for getting on a procurement vehicle: become a subcontractor or piggyback with a business that already has a procurement vehicle in a related field.
Price yourself carefully
If you are responding to an IFB (Information for Bid), do your pricing very carefully, since low bid wins. Base your price quote on only what the IFB asks for. If you include "extras," you will price yourself out of the market and lose the bid. Double check your math to ensure that you don't wind up as the winning low bid because you left off a zero and are now compelled to sell the government $5,000 worth of widgets for $500!
Do your homework before submitting bids
Before you spend the time and money drafting a proposal, check the history of the procurement to make sure there isn't an incumbent contractor or a supplier with very specific technical expertise who is almost certain to win the award. If you simply write up a bid after reading an announcement in Commerce Business Daily, you are almost certain to lose. This can be discouraging as well as expensive.
Bid wisely and selectively
No business -- large or small -- is going to win most of the contracts they bid for. At best, you will win fewer than half the contracts you bid on. Bid only when you know enough about the procurement history to be sure you have a reasonable chance of success; when you know your price is extremely competitive (and still profitable for you!); and when your qualifications are a near perfect match with the requirements. If the ad in the CBD calls for 5 years' experience, don't waste your time trying to get by with 3 1/2 years.
Focus on giving best value
This is one of the hottest buzzwords in procurement these days as the government struggles to evaluate low price versus value for the money spent. For example, if your proposal includes value-added items such as training to go along with the computer software you're selling, you will increase your chances of winning. However, don't try to sell something the RFP didn't ask for. One tip is to isolate the "shall" statements in the RFP to make sure you don't omit a single requirement.
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Small Business Guide
- Starting Up Your Business
- Structuring The Business
- Creating a Business Plan
- Your Company's Public Relations
- Effective Competitive Analysis
- Managing Purchasing to Maximize Cash Flow
- Bidding Basics
- Hiring Staff
- Small Business Insurance
- Small Business Resources
- Vacations and Taking Time Off
- Preparing for Tax Season
- Cash Flow
- Your Company's Credit
- Getting Funding
- Employee Compensation