Wrangling in federal dollars

Government contract procurement opportunities – what’s in it for your business?

Story by Cheryl Hentz

WISCONSIN BUSINESSES HAVE SUFFERED a longstanding reputation as not being particularly astute in earning federal government contracts. But that’s changed during the past decade, anchored by the successes of companies like Oshkosh Corp., Marinette Marine and Magnum Products, to name just a few. So much have things turned around that after being in the bottom half of the state rankings for most of the 20th century – and even among the bottom 10 states for the first half of the past decade – Wisconsin moved to 16th in the ranking for federal contract funds in 2009 with $9.2 billion in federal sales.

There’s a substantial potential for new revenue for any business able to do business with the federal government - and state or local government, or even a school district for that matter. And one doesn’t need to have a $100 million a year, publicly traded company to land one of these contracts, either. You do have to be willing to provide a fair amount of information about your company, complete the necessary paperwork and follow some oft-time pretty explicit instructions. It sounds more complicated than it actually is and fortunately, there are a number of resources that can help you navigate the procurement waters.

One of those resources is the Milwaukee-based Wisconsin Procurement Institute. Executive director Aina Vilumsons says WPI works with businesses to enter and develop the government market.

“We work with businesses both individually and in groups to learn how to perform market research, develop market strategy, develop marketing capabilities, learn the process, target requirements, evaluate opportunities, assist in responding to opportunities, assist with contracting issues and problems, and develop and grow their government market segment,” she said, adding that formal certification is not required to bid on federal contracts, but in many cases, some type of certification is necessary and many of the agencies that provide assistance can also help with the certification paperwork.

You should know that there is no “common” certification – each agency is different.

“The state and federal governments have different processes and requirements. Certifications are like frosting on the cake,” Vilumsons said. “It’s also important to remember that the government will not work with a vendor only because of their certification.”

But even with the best of help and guidance, small businesses can still face challenges, especially when trying to land those first few contracts. One challenge is competition. Since the economic downturn, competition for government contracts has increased dramatically. Businesses who never considered the government marketplace are now seeing it as a viable option. Other challenges, Vilumsons said, include resources and location.

“A business will need some level of resources – time, knowledge and money – to enter the marketplace. How much will depend on a myriad of variables. They also need to make sure from a capacity standpoint that they have the right amount of resources from a labor, financial, technical skills, etc., standpoint to support a government award,” she said. “From a location perspective, federal contracts could be a challenge because we have limited in-state and near-state installations, nor are we near the ‘beltway’ or where the decisions are made.

“With state contracts, challenges could arise because of a business’ proximity to facilities or the project. And, as in all business, it is a combination of what you know and who you know. It is difficult for many businesses to penetrate the government marketplace.”

Patience is key

ENTRY INTO THE MARKETPLACE is not always quick, either. It can realistically take 12 to 24 months from the time a business seriously starts working on entering the government market to the time they get their first award, explained Vilumsons.

“It depends of course on how much dedication they put behind it and what type of work they are going after,” she says. “(And if they need to be certified), those certifications that have a formal application can take six to 12 months to process and deliver a determination. There is quite a bit of prep work prior to actively going after government work.”

“People need to be aware though that it’s not just as simple a thing as filling out some forms and you move forward. You have to have a lot of things in place in order for your company to participate with the General Services Administration,” explained James L. Roberts, Jr., government and international sales manager for Magnum Products, LLC in Berlin, which has been working on government contracts since approximately 2001 and was the 2009 recipient of the Wisconsin Governor’s Award for Federal Contracting.

“You have to have a Dun and Bradstreet number. You have to be registered on the Central Contractor Registration (www.ccr.gov), which is kind of a long thing to do and maybe takes about an hour online. You also have to register with Online Representations and Certifications Application (https://orca.bpn.gov). You also have to have a CAGE code, which helps define your business with the Small Business Administration and the IRS. These places are all hooked together and in order to (work on a government contract), you have to be clean and visible to all these other federal groups.”

Roberts recommended business owners be patient during this process. “Our government does not move as quickly as private industry. So after you submit (your paperwork and applications) you need to be very polite, you need to follow up and you need to be consistent in your follow up to make sure that your forms are in place, to find out when they’re going to be reviewed, who’s going to review them, etc.”

All in the details

THE SECOND TIP ROBERTS provided is to understand how to conduct a contract review.

“It is absolutely essential. Some of these contracts are only a page to three pages long, but some of the larger ones can be 50, 60, 80, 100 pages long. You need to have the ability to read them and understand what the implications and ramifications of the contract are on your company, on your administrative support, etc.,” he says. “There’s a lot that goes into contract review and you have to take it real seriously.”

Neenah-based Val-Fab, Inc., a custom metal fabricator and the 2008 winner of the Wisconsin Governor’s Award for Federal Contractor of the Year – New Federal Contractor, doesn’t run into a lot of roadblocks these days when applying for government work. But when the company was first getting started, it had difficulties understanding the specifications and some of the rules that needed to be followed to meet the terms of the contract, said William Capelle, director of business development for Val-Fab. Or they missed details along the way because they didn’t read the contracts and specifications carefully enough. So Capelle agrees business owners should read materials and contracts carefully and make sure work is done exactly according to specifications.

“It seems like it’s a lot of work or that it’s hard. It’s not hard at all. But you do have to take your time and make sure you know what everything means. And about 90 percent of each contract is the same,” Capelle said. “So once you get into the flow and have a feel for what the contract is saying, the rest of it is pretty easy.”

He also recommends that you always meet deadlines because they are critical for the government, and that you only offer products or services that are already part of what you do as a business.

“Don’t try to do something that’s not your core competency in your company. Because if you try something that you’re not accustomed to doing, and it’s not done right, they’re not going to pay for something that’s done wrong,” Capelle said. “And if you’re not good at it, you’re going to lose money and usually you can’t make it up on volume. So I would focus on what your core competencies are and then look for those types of projects.”

Magnum Products’ specialty, for example, is mobile lighting units and power generators. Sticking with its core competency, the company is the exclusive supplier of light towers to the Marine Corps and the U.S. Air Force. Roberts says government contracting accounts for up to 15 percent of their overall business.

“It’s not the majority of our business, but what it allows us to do is go out and secure things with a larger economy of scale,” he said. “And we’re supporting our country at the same time. And a lot of our suppliers are very thankful for that and do business with us because they want to be a part of that support, too.”  

Government work often provides some market stability to a business, particularly in tough economic times such as the past couple of years. 

“Businesses that had federal work fared much better when the markets softened over the last couple of years,” says Vilumsons.

Here are some other tips she shared: 

• The government, depending on the requirement, usually purchases low cost or best value. Vilumsons said it isn’t necessarily lucrative, but has the potential to be a very good customer (and government agencies pay their bills, frequently electronically or with credit cards, so being able to accept these kinds of payments is helpful, too). Those who understand the rules and processes can do very well;

• Businesses must know their customer – to do this they need to do their homework and spend time meeting with and talking to agencies whenever possible;

• Government work tends to be intrusive;

• Certifications usually involve disclosure of personal and business financial and other information;

• Depending on the requirement, the government may want access to financial, quality, personnel, and other records; and

• The government wants your best price and they want to minimize their risk.

Reaching out

ONE OF THE MORE IMPORTANT ASPECTS of trying to procure government contracts is to get involved with the local technical college, said Roberts. Those institutions have much to offer in the way of assistance. There are also groups throughout the state like the Small Business Development Centers – such as the one at the University of Wisconsin-Oshkosh – that sponsor seminars for small businesses to help them get started. Local chambers of commerce can also be helpful. And besides WPI, the Business Procurement Assistance Center in Madison is a good resource, Roberts added.

“You can also do unsolicited proposals where if you have a product or service you think a division of the federal government might be able to use, you can go to that department’s Web site, put together a one- or two-page presentation with pictures, pricing and other information,” he said. “You still have to comply with all of the other requirements…but it might be enough to pique their curiosity where they contact you.”

Additionally, the Wisconsin Security Research Consortium is a non-profit entity set up to help Wisconsin companies and researchers compete for federal grants and contracts. While much of their services have been directed toward larger firms in the state, there are potential benefits available to smaller companies around northeast Wisconsin conducting R&D for themselves or by contract for others.

“We provide the outreach and some blocking and tackling for small business and researchers and then connect them to the Department of Defense and the Department of Homeland Security,” said Jack Heinemann, director of the agency. What we do is really pull together small companies and researchers so we can create a stronger proposal. Benefits that are available for small companies include the small business industrial research grants that are put out by all the major groups or agencies within the government to fund small business research.

“There are also broad agency announcements that are concepts that the agencies are looking to achieve, so they want research in a specific area. So you watch the broad area announcements and then you can put proposals against that.”

The agency also provides educational seminars and networking opportunities, like its annual Resource Rendezvous coming up in August.

“This event brings together researchers and industry to network, promote their technology, and to learn about the tools they need to effectively pursue federal research and development grants,” said Heinemann.

Dealing with the government on any level can seem like a formidable task at times, and you may not get the first contract you try for. But keep trying and remember that with a little patience, persistence and perseverance on your part, your efforts should eventually pay off.

Cheryl Hentz is a freelance writer from Oshkosh with more than 25 years experience. Her articles have appeared in several newspapers and magazines, both in Wisconsin and elsewhere in the country, and cover a wide range of topics, including business and economic development, minority issues, family pets and animal rights, finance, politics and women’s issues. Cheryl also does corporate writing for businesses and personal writing for individuals. She can be reached at 920.426.4123 or via email at cheryl.hentz@gmail.com.