2014 Business Development Strategy

Monday Morning Contracting Tip

I know it’s been a while since you have received a Monday Morning Contracting Tip, but how many of you know that it is important to conduct the proper research to establish the best Business Development Strategy for the upcoming year? 2014 is around the corner, what government agency do you plan to do business with? If you know what’s going to happen before it happens, it puts you in a better position for success.  

At the beginning of each federal fiscal year there are several federal government search companies who identifies and assesses the top 20 federal contract opportunities for the coming year.

The information in this Monday Morning Contracting Tip identifies those 20 high profile procurements to reveal key trends and patterns in those procurements versus prior years, which assist should assist you in your business development strategy.

The FY 2014 Top 20 list includes $160.7billion in total contract value consisting of prime contract opportunities from a variety of agencies and industry segments.

The FY 2014 Top 20 Federal Opportunities represent $160.7billion in total contract value, a rebound from the $92.2 billion total contract value of last year’s top opportunities, which was the lowest total value since the research company began publishing the annual report in 2006. FY 2014 is more in-line with, somewhat higher than, what we saw in FY 2011 and FY 2012, where the values were $142 billion and $148.5 billion, respectively.

·       Consistent with historical trends, Defense opportunities constitute the majority of this year’s list, totaling $118billion. The Army dominates with 57 percent of FY 2014 top opportunities’ total contract value. Of the eight Army opportunities featured, three are the top valued opportunities this year.

·       If we were to characterize last year ’s top opportunities as the year of the Government-Wide Acquisition Contract (GWAC), where high dollar value contracts like NASA’s SEWP V, GSA’s OASIS, and HHS’s CIO-CS were featured, then FY 2014 is the year of the agency-specific IDIQ follow-on. Follow-on contracts account for 81percent of the total contract value in FY 2014 and more than half of the opportunities are agency-specific IDIQs.

·       Professional services opportunities, with $73.2 billion total contract value, top the list with a slightly higher total than the $73billion in IT opportunities. IT opportunities account 45percent of the total contract value for FY 2014, driven by large IDIQs like the Army’s S32G ($30B) and ITES-3S CHESS ($25B), HHS’s CIO-CS ($20B), and Defense’s E-SITE ($6B)

Of the FY 2014 top 20 federal opportunities, seven are associated with civilian departments and agencies. The combined value of the seven civilian opportunities is $42.6 billion and represents 27 percent of this year’s top 20 opportunities total contract value. This represents a nearly $7 billion increase over FY 2013’s combined civilian value of $35.8 billion.

Know the Other Side Before Discussions and Negotiations

MONDAY MORNING CONTRACTING TIPS 

As you prepare for Discussions and Negotiations with Government Contracting Representatives, it’s good to know The Other Side before conducting these Discussions and Negotiations. 

Federal Acquisition Regulation (FAR) Part 15 supports Discussions and Contract Negotiation 

As you prepare for a Discussions and Negotiations with the government contracting representatives, it can be very easy to focus on the wrong thing. We think about the Discussions and Negotiations styles and techniques that we plan on using during the Discussions and Negotiations and we forget that what is really important, is actually sitting on the other side of the table from us. The government contracting representatives always has a story and we need to take the time to learn it.

The Other Side’s Story

When you are conducting Discussions and Negotiating with government contracting representatives, you always have to realize that they have a story. There is a reason that they are willing to sit on the other side of the table from you. They want (or need) to get something out of this negotiation and there is a story that explains why they are willing to spend time with you in order to get it.

If you want to have any hope of understanding what kind of deal the other side is looking for or what kind of price they are going to be able to live with, then you are going to have to take the time to understand their viewpoint. This is not going to be easy to do, especially when you are focused on what you want to say, you’ll find that the key is to get the deal that you want.

In order to understand the other side’s story, you need to become a good listener. Most government contracting representatives will be willing to tell your their story, you just need to be willing to listen to it. Your listening must be done without having you criticize the government on how they conduct business or interrupting them with your own thoughts. If you take the time to listen to their story, then you’ll get the respect of the other side for hearing them out, the Discussion nor the Negotiation will be as difficult as you think. 

What Happens If You Don’t Listen and Understand The Story On The Other Side

Many government contracting representatives always have a second choice in mind that may not be as technical as your company. They feel as though they can work with them to get them to the level of your company, with a better price of course. Many companies can talk themselves out of an award if you don’t listen and understand the other side of the story. Companies are simply in a rush and not providing quality information to convince government representatives that your company is their best solution.

When you realize that this has happened you need to take action. You need to revisit your Discussion/Negotiating Tactics and Strategy and renegotiate with the other side, consider problem solving solutions that supports the need of your client. Understand how government agencies reached their position, and having support for what their goals and objectives are provide you a better discussion and negotiating strategy.

Know the Other Side  

Good Faith Efforts – Is it enforced or is it a Convenient Excuse?

MONDAY MORNING CONTRACTING TIPS

All Prime/Large (other-than-small) contractors are responsible for submitting sub-contracting plan for all Prime or Sub-contract over $500,000 (over $1,000,000 for construction of a public facility) contracts. Any “other-than-small” business that receives a Federal contract or subcontract must adopt a subcontracting plan with separate and distinct goals for each category of small business.  The proposed subcontracting plan must be accepted and approved by the contracting officer before the contract can be awarded.  Once approved, the subcontracting plan is incorporated into the contract.  This is significant because an “other-than-small” contractor that fails to make a Good Faith Effort (GFE) to achieve the goals established in the subcontracting plan may be assessed liquidated damages or found in material breach of contract and terminated for default. 

Over the years, there have been complaints from small businesses whether or not the GFE was actually conducted by Prime/Large businesses. What determines whether a Prime/Large company actually conducted a GFE, how is it measured and who within the government determines if the Prime/Large companies effectively exercise a GFE to award small businesses sub-contracts? Many complaints generally decry the use of GFE and consider the GFE requirements more form than substance, a convenient, it is sometime determined an excuse for non-compliance. Although there may be some merits to many complaints, the effectiveness of the GFE standard hinges upon the manner in which recipient applies the standard to a bidder’s efforts to meet the goal.

The GFE requirements on a federal assisted contract that contain contract goals is governed by 49 CFR Part §26.53. Section 26.53 provides that when a small business goal is established, the recipient can award the contract only to a bidder or offeror that has made a GFE to achieve the contract goal.

The GFE guidance articulates a clear standard that requires that the bidder’s efforts to meet the goal must be reasonable and necessary steps to meet the goal. The scope, intensity and appropriateness of the bidder’s efforts should be evaluated in order to determine if the efforts would reasonably lead the bidder to obtaining sufficient small business participation. Mere, pro forma efforts are not GFE to meet the goal. The guidance also cautions the recipients not to reject bona fide GFE by a bidder or offeror to meet the goal. In short, the determination of a bidder or offeror’s GFE is a judgment call and the recipient must make a reasoned and balanced decision in making the GFE determination.

The question remains Good Faith Efforts - Is it Enforced or is it a Convenient Excuse?

Acquisition Team “US Government and Contractor” One Team One Mission

MONDAY MORNING CONTRACTING TIPS

Acquisition Team “US Government and Contractor” One Team One Mission

Understanding how an Acquisition Team operates could position your company for greater contracts when doing business with the Federal Government.

Federal Acquisition Regulation (FAR) Part 1 clearly defines the acquisition team as all participants in government acquisition including not only the representatives of technical, supply, and procurement, but also the customers they serve and the contractors who provide the products and services. You as a Contractor is part of the government acquisition team, the more you know about your team’s roles and responsibilities, including yours, you will be better suited for growing your business in the federal government market. The acquisition team should be working together toward a common goal not toward individual achievements. The only way you would know what the common goal is to interact with the acquisition team. You’re probably asking how do I interact with the acquisition team when I don’t know who’s on the team.

Please allow me to identify your acquisition team for most federal government agencies

·         Contracting Officer

·         Contract Specialist

·         General Counsel

·         Small Business Advocate

·         Competition Advocate

·         Contracting Officer Representative

·         Customers

·         Contractor providing the Goods or Services

It is important that team members understand their roles and responsibilities – where specific duties are assigned, how performance measures and milestones are developed and that members are held accountable for individual work products. The success of many companies doing business with the federal government establish a similar acquisition team to support their efforts, ensuring that their team operate in a similar format as the US Government operates.

All members of a Acquisition Team should embrace a framework of collaborative partnering and remove any “US” vs “Them” methods from the operating environment. The Acquisition Team consist of the Government and the Contractor, let’s work together to accomplish the task.   

 

Lowest Price Technically Acceptable (LPTA)

 

The Challenge of Applying the Lowest Price Technically Acceptable (LPTA) Process to the Procurement of Complex Services

When the Government used LPTA, they should be required to define Technically Acceptable to ensure needed quality:
Industry has expressed concerns about the use of Lowest Price, Technically Acceptable (LPTA) selection criteria that essentially default to the lowest price bidder, independent of quality. Where LPTA is used, the Department needs to define TA appropriately to ensure adequate quality.

Government are moving to increased reliance on the Lowest Price Technically Acceptable (LPTA) source selection method.1 Under defined circumstances, the LPTA process can control costs and result in best value for the Government. But the LPTA process, which can eliminate agency discretion to value technical and other non-cost superiority, is not appropriate for all acquisitions. Within the context of professional services, even under the best of circumstances, the LPTA method creates risks that need to be mitigated by a precisely drafted solicitation and a technically rigorous, carefully managed proposal evaluation process.

Many Contractor’s would recommend that solicitations for complex professional services avoid using the LPTA source selection process. Such solicitations should instead adopt a classic best-value/cost-technical tradeoff approach to afford the Government flexibility to value technical superiority relative to potential cost savings.

Many of the government proposal evaluators are pushing back on the use of lowest price, technically acceptable (LPTA) evaluation criteria—and for good reason. They are now learning that this evaluation criteria can limit their ability to exercise reasonable judgment in the evaluation process and may result in contracts awarded to companies that are clearly inferior and have less qualified offerings compared to others in the competition.

Here are two instances where the use of LPTA evaluation criteria backfired on the government decision-makers:

1.   Superior value versus price

2.   Past performance and performance risk

 

Maximizing Government Sites as a Resource to grow your business in the Federal Market

Maximizing Government Sites as a Resource to grow your business in the Federal Market

Doing business with one of the largest purchasers of goods and services in the world - the U.S. Federal Government - can seem like a daunting business strategy for many small to medium business owners. Many often mistakenly believe that only the "big guns" can really compete for U.S. Federal Government business.

But whether you are selling a service, reselling a product, or marketing your own proprietary product to the federal government, the procurement process can be challenging for businesses to navigate.

Aside from treating U.S. Contracting as a long term business strategy, there are many other considerations that you will need to navigate through and check off on your way to securing your share of what can be a very profitable line of business. Here are some resources from the government and small business expert communities that can help you get started.

Understanding Federal Government Contracting: Before you delve into the world of defense contracting, it's worth getting an understanding of government contracting in general.

·         Business.gov

·         Federal Contracting Guide

·         OPEN Forum

The Ins and Outs of Defense Contracting for Small Business: From registering to do business with the Federal Government to finding your target market to finding and securing contract opportunities, the DoD's Office of Small Business Programs (DoD OSBP) should be your one-stop source for everything you need to become a federal contractor or sub-contractor.

·         Guide to DoD Contracting Opportunities - A Step-by-Step Approach to the DoD Marketplace  

·         www.sellingtoarmy.info

Government Rules and Regulations that Impact Defense Contracting: While navigating the defense contracting maze presents its own challenges and opportunities, depending on the nature of your business you may also encounter regulatory practices that apply to specialize industries.

·         For example, if you wish to pursue contracting opportunities that involve overseas deployments, such as Iraq or Afghanistan, you will need to familiarize yourself with the Defense Base Act, which provides workers' compensation protection to civilian employees working outside the U.S on U.S. military bases or under a contract with the U.S. government for public works or for national defense.

Security Clearances - Do I need One?: Whether you are a defense contractor or sub-contractor, you don't necessarily need a security clearance. However, having one can certainly open up more opportunities for your small business, including the option for working on a  variety of contracts, in particular ones that involve cutting-edge technology programs and projects.

·         "Getting a Security Clearances in a Nutshell", 

·         "Obtaining a security clearance for your 8(a) company and/or employees".

Contracting Strategy that Supports a Contracting Management System

MONDAY MORNING CONTRACTING TIPS

Do you know why your Contract Management System is not effective, maybe you don’t have a coordinated Contracting Strategy? 

Almost every company or organization has some Contract Management System in place. These systems are usually designed to increase efficiency, reduce risk and boost the bottom line by keeping track of contract milestones. However despite having a Contract Management System in place over 90% of companies do not have a Contracting Strategy that supports the system. Because there’s little to no strategy behind their Contract Management Systems, many companies’ Contract Management is inefficient and most often hurt the bottom line. These types of companies who does not invest in a Contract Strategy are not only at risk of losing revenue, but of being noncompliance as well.

Listed are the top 10 ways Contract Management can fall short and how to start putting Strategies and process in place:

1.      Lack of Executive buy-in for the critical importance of Contract Management 

a.       Counter Action: Executives, give attention to Strategic Contracting  System that works.

2.      Missed Deadlines, Payments, Renewals and Obligations

a.       Counter Action: Fulfill fiduciary responsibilities to countermeasures  fines and possible terminations and lawsuits, pay attention to the administrative areas.    

3.      Approval Process Weakness, Bottlenecks, and Rogue Contracts

a.       Counter Action: Ensure approval process are effective and efficient.

4.      Reliance on Paper-Based Systems or Simplified Document Repositories 

a.       Counter Action: Ensure documentation is organize, control and visible is part of effective Contract Strategies  

5.      No Contract Analytics or insight for Empowered Decision Making

a.       Counter Action: Insight on Contract Performance will ensure your Contract Strategy is working

6.      Duplication of Effort

a.       Counter Action: Duplication of Effort should not be used incorrectly

7.      Keeping a Contract Management System Isolated from Other Enterprise Applications

a.       Counter Action: Integrating contract management system with other enterprise applications will provide significant value add

8.      Poor Compliance Procedures

a.       Counter Action: Ensure that contract terms are fulfilled and that transactions are executed to the letter is a key component of mitigating contract risk

9.      Inability to Automatically Execute Pricing Incentives with Accuracy

a.       Counter Action: Employ complex promotional pricing in contracts to drive profitability and market share

10.  Paper and Ink Signatures

a.       Incorporate e-signature, e-signature create greater visibility, data access and stronger client relationships, all which quickly add up to increased profitability.