Note: The ARRA (Recovery Act) initiatives and/or programs referenced in this article will expire on September 30, 2010. Any statements about qualifying time periods, or extensions of these dates, as they pertain to the availability of ARRA programs are over-ridden by the expiration of the Act on September 30, 2010.
This year is an interesting year for federal government contracting.
According to *The Federal Times, the American Recovery and Reinvestment Act (ARRA) has resulted in a 13 percent rise in federal contract spending in 2009, and much of this will continue through the 'busy season' when federal fiscal budgets close on September 30. Federal fiscal years run from October 1 to September 30, when a 'use it or lose it' mentality kicks in and busy vendors vie for government year-end dollars.
Come October, the federal government typically slows down its spending dramatically as Congress and the Executive Branch work through new budgets and determine where spending will fall. The actual new fiscal year money doesn't trickle down to agencies until late winter or even spring. During this time, government vendors usually engage in a sales and marketing push to raise awareness of their products and services among target agencies - events, webinars, and 'educational' events are popular as vendors try to match their offerings to an agency need.
But this year, speculators and industry watchers are forecasting a different pattern.
*Mark Amtower, a leading authority on doing business with the government predicts that 'instead of the traditional ebbs and flows, the stimulus bill means spending won't slow even at the end of the fiscal year.' As the fiscal calendar starts anew, Mark points to the fact that government agencies will still be spending stimulus dollars, rather than coming up with new contracts.
The same Federal Times article also points to the fact that once ARRA funding dries up and deficit pressures start to emerge in fiscal 2010 then the government's procurement budget is expected to shrink and stagnate (FedSources' 2010 Budget Outlook).
So what does this mean for small business and how can you make the most of federal spending in the new fiscal year?
Remember, the new federal fiscal year is not likely to see the typical spending slowdown, so if you are invested or looking to invest in doing business with the federal government then it's time to hunker down and align, or continue to align, sales and marketing resources where the money is being spent.
The good news is that the government is actually one of the biggest advocates for helping small businesses navigate the government contracting maze and find opportunities.
So whether you are new to federal government contracting or are adjusting to the new opportunities provided by the ARRA here are four essential steps (as recommend by Uncle Sam) that you should follow on your path to doing business with the federal government:
1. Register to do Business with the Federal Government
There are three things a small business must do to become a registered and certified government contractor - obtain a DUNS number, register your business with the government's Central Contractor Registration (CCR), and obtain a past performance evaluation (a must if you want to get on a GSA Schedule contract). Learn how to do each of these here.
2. Understand how the Government Buys Goods and Services
About 25 percent of contracts are set-aside for small businesses (check here to see what qualifies as a small business) and all federal purchases above $3,000 but under $100,000 must be reserved for small businesses, unless the contracting officer cannot obtain offers from two or more small businesses that are competitive on price, quality, and delivery (source).
You can learn more about set-aside programs for small and disadvantaged businesses (SBA's 8(a) and HUBZone programs) as well as other programs and resources from the federal government that help small businesses successfully compete for government business here.
3. Get on the GSA Schedule
Not the only government procurement vehicle, but an essential starting point for small businesses, the U.S. General Services Administration (GSA) establishes the largest government-wide contracts under its GSA Schedules Program. GSA establishes long-term contracts that provide over 10 million commercial supplies and services that can be ordered directly from GSA Schedule contractors or through the GSA Advantage! online shopping and ordering system. Getting a GSA Contract is not a guarantee that you will win immediate business but it equates with credibility in the government marketplace. Learn more about getting on the GSA Schedule.
4. Find the Opportunities
Once you are registered to sell to the government, now you can start searching for opportunities. Before you dive in, develop a plan to understand the needs among the countless agencies for your product or service. Check out the Procurement Data System (www.fpds.gov) to determine which agencies have a history of buying your offering. Once you have a target list, check out FedBizOpps (www.fbo.gov), which is used to publish all solicitations of $25,000 or more. You can use your NAICS code (look it up here) to search for 'sources sought' - not contracts, but notices from agencies looking for your product or service.
Frequently, businesses with complementary services will team up to bid on federal contract opportunities. If you're new to federal contracting, teaming with another business as a 'subcontractor' is a great way to get your foot in the door in the federal government.
Read Five Tips Finding Federal Contracting Opportunities to learn more.
Stay tuned for my next post which will focus on the ins and outs of marketing to the government.
- SBA Contracting Opportunities Guide for Small Businesses
- SBA Federal Contracting Opportunities Online Training Program -It's free, comprehensive, and includes numerous resources to help you understand and engage in the government's contracting process.
- SBA to Host 200 Events to Help Women, Veteran and Minority-owned Businesses Get Access to Information on Government Contracting Opportunities (SBA Press Release)
- *The Essentials: Securing a Share of Government Business (from *OPEN Forum) - Another excellent resource is this brief downloadable PDF that summarizes best practices for selling to the government, including how you can use government resources, such as the Small Business Administration (SBA), to your advantage.
- *Fedmarket.com: The Federal Marketplace - Provides excellent 'free content' including articles, white papers and newsletters to help you sell to the government.
*Note:Hyperlink directs reader to non-government Web site.