Tip 1 for Winning Government Contracts: Understand the full gamut of federal market opportunities and where your business could benefit from these. PART 2.

This is the third blog in the series of 10 tips for winning government contracts and growing in the federal market. You can see the previous post (PART 1 of Tip 1 that covers the previous point) here.

Point 2. Because of the market size and a smorgasbord of opportunities, you have to make an extra effort to keep yourself focused, or you will waste opportunities, time, and resources.

Focus comes from two places:
1. Solid strategy.
2. Knowledge of how to develop business correctly.

Since we will discuss developing business correctly in the other nine tips, let’s focus on strategy for now.

To put it simply, strategic business development planning boils down to four key tasks:

1. Understanding your growth goals and selecting strategies to achieve them.

First you need to decide how large you would like your business to grow. You have a variety of options. You may be comfortable staying small and creating a lifestyle business that you then sell and retire – so you may not want the headache of getting past $7 million. Or, you may get to about $15 million in size, and don’t want to grow much larger because you want to keep taking advantage of the small business set-aside opportunities in your business category. Perhaps, you would like to get to $100 million in size and sell then, or take your company public. Or, you are an empire builder and would like to experience explosive growth to become another multibillion-dollar giant. Your desired outcome will drive your strategies and contracts that you are going to pursue. If you would like to grow your company beyond a boutique size, you will need to master government capture and proposal management – so this should be part of your strategy.

2. Matching your capabilities with target federal agency clients.

Focusing on select few customers will help you build your capabilities and past performance to qualify you to prime and win increasingly larger contracts.

Here is where you decide which customers you are going to select. Essentially, in the federal market you are looking at the defense and civilian sectors. Defense sector is the 800-pound gorilla, but all civilian agencies put together is nothing to sneeze at either. In the executive branch, there are 15 cabinet-level agencies; 65 independent agencies and government corporations (such as Central Intelligence Agency and Federal Aviation Administration); and Boards, Commissions, and Committees. Then, there are two more branches that buy from contractors as well.

Focus. If you jump on every opportunity to get a contract, you are unlikely to get anywhere fast. I know of only a handful companies who have succeeded in growing large by bidding and grabbing every contracting opportunity that came to them, no matter what the customer or area of expertise was – and they had other factors going for them such as plentiful funding and amazing luck.

Essentially, in the initial growth stages you have to pick a sector with 1-3 agencies that buy what you sell. Then, work diligently to become a subcontractor to the best prime contractors in this agency. After you perform well on 2-3 contracts there, you can go after contracts and prime yourself.

In the meantime, plan to jump at any opportunity to place your employees on other prime contractor’s projects in this agency to expand your footprint, and then train your employees to become your eyes and ears to bring you more opportunities to bid on. Have them gather intelligence about this customer, and leverage them to build direct relationships with the government contracting officer, project managers, technical personnel, and other key government players. Get to know these customers and find out what their problems are, and bring solutions to them. Very soon you will start seeing the fruits of your labor.

3. Analyzing your core competencies and identifying additional areas of profitability so that you could expand not only vertically but horizontally into adjacent fields.

Look ahead. Now that you will have successfully landed a handful of prime contracts in a couple of your target agencies, and have generated some good past performance references (which is the single biggest qualifier for getting government contracts), you can think about expanding. You have to figure out how to branch out.

You can branch out in a couple of ways:

Expand your portfolio of services.

For example, if you have been providing software development services as a subcontractor, why don’t you add project management to your portfolio. Now you can provide an entire solution that you oversee yourself as a prime contractor, and don’t need another company to run your personnel’s efforts. If you are in the physical security business providing mainly subject matter expert services in doing vulnerability assessments, you may want to add a product to your line such as security systems, or a software solution. The point is, you want to add capabilities that logically fit with your existing core capabilities, that will enable you to go after larger, more lucrative contracts. You may also want to add various certifications and credentials such as CMMI or ISO.

Expand your customer base.

For example, if you have been successfully performing work for the Army, you may want to branch out to the Navy and the Marine Corps. You may also want to think about adding the Department of Homeland Security to your list of target customers. Perhaps, it may be the intelligence community next – the so-called “three letter agencies.” As you map your expansion, don’t forget to consider opportunities in the public and private sectors. The sky is the limit, as long as you keep focused and try not to overextend at any given time.

4. Now that you have done all this thinking and planning, zeroing in on the specific contract opportunities you are going to chase.

Do some searching and start building your pipeline. We will talk about the full cycle of business development in the next few tips and will also talk specifically about identifying opportunities and building the pipeline. You can get my free report on building opportunity pipelines based on the experience of the small, medium, and top-tier government contractors here.

As usual – don’t hesitate to ask any questions you have about government contracting. Stay tuned to the next tip.

One thought on “Tip 1 for Winning Government Contracts: Understand the full gamut of federal market opportunities and where your business could benefit from these. PART 2.

  1. For me the most important thing is having a solid professional business plan and being able to present it coherently. If you want success getting contracts you have to know your business plan inside out and believe in it 100%

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