Navigating the Government Contracting Process
Each year, various associations designate March as Supply Management Month, recognizing the unique role played by supply management professionals in helping to build better business and government in Illinois, throughout the United States, and around the world. They make important contributions to the quality, efficiency and profitability of businesses and organizations large and small, in the public and private sectors.
Nationally, supply management professionals in manufacturing, government, educational, institutional and service organizations are responsible for managing and monitoring billions of dollars of goods and services every year, which directly influences the U.S. economy. The Illinois Procurement Technical Assistance Center (PTAC) at Bradley University, housed at the Turner Center for Entrepreneurship in the Foster College of Business, engages with business owners who desire to be part of the public-sector supply chain.
The Government Marketplace
Government spending is a major component of the Gross Domestic Product (GDP)—two thirds of which is accounted for by state and local governments. A solid U.S. economy should generate the tax revenue necessary to support ongoing moderate growth in state and local government spending in 2019.
Governmental entities rely on contractors to provide many of the goods and services necessary to support their daily operations. Per USAspending.gov, the government spent $4.11 trillion in 2018. Of that amount, $44.3 billion was spent on acquisition of assets and $377.3 billion on contractual services. More than $88 billion was awarded to prime contractors, and over $8.4 billion in sub-awards. In Peoria County, the federal government spent more than $1.1 billion in prime contracts and over $132 million in sub-awards.
In FY 2017, Illinois’ four chief procurement officers oversaw $10.3 billion of expenditures whose procurements were subject to the Illinois Procurement Code. Of that, agencies and universities awarded $335.3 million with small businesses in Illinois. Each agency and university must strive to meet or exceed the 10-percent goal set forth in the Small Business Contracts Act.
In FY 2018, small business federal contracts totaled $482 billion. This lucrative marketplace operates with its own unique rules, regulations and language. For example, the System for Award Management (SAM) is an e-procurement system managed by the U.S. Government. A company, business or organization must have an active registration in SAM to do business with the U.S. Government.
Are you curious if the government marketplace buys what you sell? If so, search fbo.gov and you will find the vast majority of solicitations over $25,000. When the time comes to consider this market for your organization, PTAC can help you identify and explain contracting opportunities at the federal, state and local government levels. An entity has the option to pursue a range of customer targets, including government agencies as well as other large and small companies, as potential business partners who serve as subcontractors, primes, teaming partners, mentors or protégés. This engages suppliers in the joint exploration of ways to work together to deliver mutual benefits. One must exercise patience in this process.
An Individual Roadmap
Within the federal government, there are more than 200 distinct agencies with their own unique processes, purchasing power, and multiple layers of decision-makers. As such, your marketing strategy needs to focus on specific, targeted agency requirements. Your PTAC counselor can assist in market research to target your focus to the agencies most likely to purchase your product or service.
All layers of decision-makers need to be identified for each target customer. It is then important to understand how to engage with them. Always do your homework so you can communicate how your product or service will support the agency’s mission and vision—this will attract much more attention than merely attempting to sell your product. Use your research, be proactive, and plan your marketing strategy for specific opportunities projected in the next six to 12 months for your target market.
One important aspect of government contracting involves eligibility for state and federal socio-economic certifications. Federal agencies have a goal of 23 percent for acquiring contracts with small businesses, with sub-goals for certain groups, all of which promotes supplier diversity. Qualifying for these set-aside opportunities requires business certifications to verify compliance, which involves a formal application process and additional documentation. Depending on the evaluation office, a site visit may be required.
By creating an individual roadmap, PTAC counselors help train small contractors who are new to government requirements and support existing suppliers to provide products and services needed by all units of government. Developing a strategy to pursue government contracting could lead to projects that provide new jobs and economic growth for your business and the Greater Peoria region. iBi
Keli Krueger-Huhra, MBA, CPSM is director of the Illinois Procurement Technical Assistance Center (PTAC) at Bradley University.