Tip 1 for Winning Government Contracts: Understand the full gamut of federal market opportunities and where your business could benefit from these. PART 1.

This is the second blog in the series of 10 tips for winning government contracts and growing in the federal market. You can see the first blog post here.  Today I am going to cover the first part of Tip 1: Understand the full gamut of federal market opportunities and where your business could benefit from these.

Essentially, whether you are new to the market or have been in it for a while, you have to have a clear growth strategy. You need to understand the federal market, the role business development plays in it, and then how you are going to focus your efforts to grow in it. If you do it right – your growth could be fast and exponential. There are quite a few federal contracting businesses that double or triple in size every year – and there is no reason yours shouldn’t be one of them.

Here are two points that I wanted to make:

Point 1. If you choose to grow your business from small to large, the federal market is by far the best market to do it in. It is stable (the government pays its bills within net 30 days), it is growing, and it is huge. It has a need for everything – be it paperclips, landscaping, professional services, project management, or Information Technology (IT). Go to http://www.gsa.gov to take a peek at the federal supply schedules and see all that the U.S. government buys – in fact, it buys more than 13 million different products and services. Essentially, the U.S. Government is the largest customer in the world, with $524 billion spent in 2009 in accordance with http://www.usaspending.gov. Many contracts are millions and billions in size, lasting multiple years.

But, your capability to grow goes even beyond the “limits” of the vast federal market if you learn how to play well within its rules. Adjacent markets to the feds that have very similar rules of the game include state, local, and tribal governments, and then numerous educational and research institutions (often referred to as the public sector). Sometimes these markets are a stepping stone to federal contracting, because the barriers to entry are not as high – and they have budgets separate from (and in addition to) the federal dollars.

Beyond the federal and public sectors there is the private sector with its “complex sales.” You may ask, why are we bringing up the private sector in a discussion about the federal market? Please, bear with me, and I will explain.

Let’s go back to the federal market. To put it simply, federal market is complex, and has a lot of rules and processes that have matured over time to regulate how our government spends taxpayer dollars – to ensure competition, fairness, and to stamp out corruption – and to bring the best value for the government dollar.

As the U.S. Government process of buying from the private contractors has evolved through multiple reforms and changes, and gotten more sophisticated, so has the business development process in the government contracting community. The complex federal procurement process has even given birth to a whole profession of capture and proposal management, with its robust processes for winning government contracts.

Interestingly, large corporations who have done government business (which is nearly all of them), borrowed the government’s procurement processes. They have mostly done away with the handshake deals and now employ a bidding process that uses very similar approaches to the government procurement, with formal requests for proposal (RFP).

The reason I bring up this point is that you can lump large corporate buyers up there with the government as your customer base. If you master the business development process to win government business, then you will dominate the large corporate sales market as well. Now, together with the federal and private sectors, we’re talking trillions of dollars.

To reiterate – federal sector is where you want to grow your business when you want a stable market with exponential capabilities, once you know how to develop business the right way – and you will have better access to the adjacent public and private sectors. No matter what the economy is doing, your business will flourish.

We will cover Point 2 for first tip on Tuesday. In the meantime, please, go ahead and post your comments and questions.

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