How Does A Small Business Contract With the Federal Government?

The motivation for Small Businesses to contract with the Federal Government is real. In 2010, almost $98 billion of the over $430 Billion in federal contracts were awarded to Small Businesses. Further, the larger companies who won the remaining > $332 billion in contracts were required to include small businesses on those contracts through various but required teaming agreements. There is a growing need today for small businesses to contract with the government and here is some more helpful good news:

1) Companies who contract for federal dollars in excess of $550,000 are required to include small businesses in the work if awarded. The government has set various small business percentage goals to aid small businesses in teaming with these prime contractors.

2) Contracts valued at less than $25,000 must be awarded to small businesses.

3) Mentoring, training and other helpful assistance is offered to Small Businesses using the Small Business Administration, the Federal Office of Small and Disadvantaged Business Utilization (OSDBU) Interagency Directors Council (for small disadvantage businesses), Score and the Procurement Technical Assistance Coordinators. These are free services offered to Small Businesses.

4) Through the Prompt Payment Act (a Federal Acquisitions Regulation (FAR) clause), the federal government is legally required to pay its contractors in full within 30 days or for partial performance hurdle payments within 14 days. If the federal government does not pay promptly it will self-impose interest penalties upon itself.

While this assistance is certainly helpful, the heavy lifting of finding partners is the small businesses own responsibility. This translates to networking with others so that you can identify partners for new opportunities. Look for a network where you provide unique services and products that complements like-minded professionals already networking. These groups often welcome new members and offer their own unique products and services that may help you. The best partnerships are set up as strategic teaming strategies that align to a government and business need. The government will evaluate companies and teams based primarily on past performance (experience) and current capabilities (skills) and how these experiences and skills will fulfill a future government need. This strategy results in Prime Contractors (Larger Companies) and subcontractors forming teaming agreements or partnerships so they can fulfill these experience and skill set requirements asked for by the government.

Also critical to your small business marketing efforts is the realization that your customer service always has the immediate attention of your partners and it is here where the real marketing opportunity is for more business. Customer Service, for a Small Business is the most probable work generation center for your business. It makes sense that when you have your customer’s attention at the moment they need you a great deal, you can turn that into an opportunity to be remarkable. And being remarkable is something that is talked about and remembered when the same product or service is needed again.

Allow your Customer Service to be remarkable and deny anything to slow this down. This is where competitors win in every game if they find a way to better exceed your ability to satisfy your customers and partners. Unresponsive call centers seem like easy ways to cut expenses but even in the short run poor customer services frustrate your customers and partners. Instead, provide customer service that pays attention to your brand, over communicates, asks for feedback, and strives to over deliver on the need. This is remarkable service that will be remembered and sought out again in the future.

Providing time and thought in improving customer service is inexpensive when compared to other marketing efforts and the results are far better. Taking calls using trained and caring customer service representatives who want to help will take your customer satisfaction and word of mouth advertising to new levels.

The motivation and assistance for Small Businesses to contract with the Federal Government is ready for you, or not. Select only a few potential customers and make sure that you know everything you can about them. Mostly, ensure that your products and services are needed by these customers. Talk to teaming partners as early as possible to gauge their interest in you as a partner. Understand that you may need to talk with many potential partners before one will align with you and share their past performance with you for an exchange in experiences they may be lacking. And importantly, advice from an experienced attorney familiar with reviewing new teaming agreements is essential.

We can’t promise or guarantee that you will be successful in contracting with the government and you assume all risks associated or not associated in your business with the government.

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