Three Killer Mistakes in Government Contracting – Part 2
This is the second installment of a three part series detailing the mistakes companies can make when entering into the government contracting market. Even successful contractors will tell you that they have made many mistakes learning the ropes in this market. After all, it is a tough, complicated and rigorous market that demands expertise, dedication and perseverance before success is achieved.
While all contractors have made mistakes when trying to enter or become more successful in the government market, successful business owners have learned from their mistakes, make the necessary changes and move forward to greater business opportunities and larger contracts.
As you read through the top three killer mistakes listed here, note those that you recognize and make the changes now. You will start to see benefits and the doors that were slammed tight will start to open for your business.
Killer Mistake #2
You Do Not Understand the Language: Whether you are starting at the local city level, the state level or even the federal government level, every segment has its own language, processes and procedures. If you do not understand the conversations, the acronyms or procedures, you make it much more difficult on yourself.
- Learn the Lingo: You will hear new terms and acronyms at every meeting, outreach session and conference. If you are unsure of what they mean, it is appropriate to ask. People involved in government contracting get very used to speaking in acronyms, technical terms and buzz-words and often do not remember that even they had to learn the terms at one point. If you prefer to research first and therefore feel more comfortable conversing with contracting officers, you can use resources such as www.sba.gov for study materials or contact TargetGov for a complimentary Government Contracting Glossary and Acronym List.
- Example of Lingo: Purchase Vehicle – Government entities most often do not buy products and services the same way consumers or other businesses may buy. In the private sector, when we sell something to a consumer, we often write up a receipt after they give us the money. If we sell in the business-to-business market, when we propose a complicated or high-cost service or product to another business we often use a contract that both parties will sign which includes all of the required information and payment process.
Government entities have a more complicated purchase process (with one exception). Most often, they will use something called a purchase vehicle. This vehicle is not something one would drive, but rather it is a tool or method used to buy something.
Three Killer Mistakes © 2012 Gloria Berthold Larkin Page 2 of 2 1-866-579-1346
The good news is a vehicle may be as simple as a credit card. The bad news is that a vehicle may be as complicated as writing a two hundred page response to a formal proposal.
If you have heard of a GSA Schedule, that is a common purchase vehicle used by the federal government. Essentially it is a pre-approved contract where your pricing structure, your legal business entity and your services and products are all analyzed and final prices negotiated until you and the government agree. A GSA Schedule is a five-year contract, and it is renewable for three more five year periods making it a total of a twenty year-long contract.
Once you have an approved GSA Schedule, you have not made a sale, but you do have a “license to hunt”; and an easy tool or vehicle for the government to use when they want to buy something from you. There are other types of purchase vehicles called Government-Wide Acquisition Contracts (GWACs), Blanket Purchase Agreements (BPAs) or Indefinite Delivery Indefinite Quantity (IDIQ) contracts. These are also good examples of why acronyms are used so much in government contracting.
Accept Credit Cards:One of the best and simplest method or contract vehicle used is a government credit card. The government will make billions of dollars in purchases every year for all types of products and services simply by using a VISA or MasterCard credit card. If you accept these cards in your business, you can make many more sales. Check with your local bank for the steps needed to accept credit cards in your business.
Eliminating this #2 Killer-Mistake will help you turn the corner to success in the government contracting market. Use this tip to build a healthy, stable and secure government contracting business.