"Selling to the Federal Government"

1. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

2. "Selling to the Federal Government" Breakout Session # 612 Scott Orbach, President, EZGSA-Gateway to Government Sales Date: April, 28, 2004 Time: 3:00pm - 4:00pm NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

3. The New Government Market • Things are getting better for you! NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

4. The New Government Market • In the last few years, the government has been under increasing pressure to: • Reduce procurement costs • Simplify purchasing by users • Encourage small and disadvantaged businesses • As a result, a new model of federal procurement has emerged that is much more conducive to small business NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

5. Things Have Changed! • The Old World • The government issues RFP’s and vendors reply with proposals • The New World • Government buyers use GSA Schedules, IDIQ contracts, and other commercial-type contract vehicles • Products & services, prices, T&C are pre-negotiated • Buyer simply issues a PO NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

6. Things Have Changed! • The Old World • Purchases are centralized, and • Procurements are planned far in advance • The New World • Purchases are made by the actual users in the field • Government buys commercial, off-the-shelf products when and where they are needed NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

7. Things Have Changed! • The Old World • The government only cares about the lowest cost • The New World • Government buyers focus on overall Best Value for their agency’s specific needs NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

8. Things Have Changed! • The Old World • The government prefers to use large government contractors • The New World • Government buyers are strongly encouraged to use small and small, disadvantaged businesses NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

9. New Success Factors • Old World • The federal government is an entirely separate world • New World • The federal government can be considered the nation’s largest commercial vertical market NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

10. New Success Factors • Old World • Must have an “in” at agency headquarters • New World • Must create solid business relationships with the actual buyers and users NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

11. New Success Factors • Old World • Government contract officers and purchasing agents are adversaries • Your GSA contract specialist is an adversary • New World • Government contract officers and purchasing agents are customers • Your GSA contract specialist is a channel partner NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

12. New Success Factors • Old World • Success comes from having a separate marketing program for the government • Success comes from having a separate sales program for the government • New World • Success is enhanced by leveraging successful commercial marketing programs to encompass the government marketplace • Success is more likely when government sales are integrated not isolated NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

13. More Good News • In some ways, selling to the government is easier, because • The rules are explicit • Everyone, including purchasing officers, is supposed to play by those rules • You have the opportunity to protest an award to a competitor if you believe you have been mistreated • There is lots of help available NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

14. The Opportunity • It’s HUGE!!!!! NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

15. The Government Market • The government marketplace is huge: • Last year (FY 2003), the government spent: • About $1 Trillion in total • About $400 Billion with contractors NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

16. The Government Market • The GSA Schedules program is huge: • Last year (FY 2003), the government spent $26.1 BILLION through GSA Schedules • Compare this to the Gross Domestic Product (GDP) of these American industries: • Coal Mining $10.5 billion • Furniture & fixtures $25.0 billion • Tobacco products $21.1 billion • Railroad transport $25.8 billion NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

17. The Government Market • GSA Schedules grow at over 24% per year • FY 2000 $13.9 Billion • FY 2001 $17.6 Billion • FY 2002 $22.1 Billion • FY 2003 $26.7 Billion • While total government expenditures grow at 6.5% • FY 2000 $1,788.8 Billion • FY 2001 $1,863.8 Billion • FY 2002 $2,011.0 Billion • FY 2003 $2,157.6 Billion NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

18. The Government Market • So Many Agencies, So Little Time • 15 Executive Agencies • 62 Independent Agencies • PLUS • International agencies • Government sponsored laboratories and university programs • Designated contractor with Cost+ contracts • State & local governments (IT only) • Extensive list is in your handout NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

19. The Government Market • Your handout also provides more detailed information about • Government IT budget by agency • The 10 fasted growing GSA Schedules • Federal dollars spent by state and region • Government credit card purchases by agency • Reported contract actions by agency NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

20. Your Federal Marketing Plan NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

21. Steps in the Process • Set your goals • Get your “fishing license” - GSA Schedule • Know the rules • Develop your marketing strategy • Target the sales effort • Build personal trust • Get the help you are entitled to NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

22. What Do You Want? • What are your marketing goals? • Overall for your company • This year • Next five years • For the federal government • For state & local government • What role does the government market play in the long term success of your company? • The Goal Setting Worksheet NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

23. Setting Goals • What do I want? • How will I know I have it? • Events • Metrics • Impacts on other things • What will it mean to me? • What will get in my way? • Me? • Other things • What will I COMMIT to? NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

24. Get a License • Your GSA Schedule Contract is your “Fishing License” • It is like having a commercial national account agreement with the government • It gives government agencies the ability to easily acquire your products and services • It does NOT guarantee any level of sales • Other contract vehicles may let you fish better for different fish or in different ponds NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

25. Know the Rules • The Rules are published for all to see • All federal purchasing is governed by the Federal Acquisition Regulation (FAR) • The Federal Acquisition Regulations System established uniform policies and procedures for acquisition by all executive agencies • The government’s AcqNet website (www.arnet.gov) is a great source for federal acquisition information • Both the contractor and the government have to play by this same set of rules!!! NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

26. Know the Rules • Agency Contracting/Procurement Offices • Enforce the rules • An authorized buyer in an agency generates a Purchase Request • The Procurement Office processes that Purchase Request from initial notice through contract execution • In cooperation with User/Buyer (or their designee), administer contract from execution through performance and completion/close out • Involvement is usually minimal for routine purchases • Help identify buyers for small businesses to market in their Agencies NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

27. Know the Rules • Mandatory Sources • Government agencies are supposed to purchase their supplies or services from fully qualified organizations according to the following order of priorities: • UNICOR Federal Prison Industries • Javits-Wagner-O’Day Program (JWOD) for organizations serving the blind or other severely handicapped people • GSA Schedule • Full and Open Market Procurement NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

28. Know the Rules • Other Issues • Micro-purchases • Under $2,500, a government buyer can pretty much do what they want • Competition Threshold • Purchases above $2,500 should be done through a competitively awarded contract • A GSA Schedule is a competitively awarded contract • Set asides • Any purchase between $2,500 and $100,000 is supposed to go to a small business • Other acquisitions may be designated set asides for small businesses or small disadvantaged businesses NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

29. Know the Rules • Special Designations • Small Business • Specific sales volume or number of employees depending on the supply code • Women-Owned Business • Minority-Owned Business • 8(a) designation • HUBZone • Historically Underutilized Business Zone • Veteran-Owned Business • Disabled Veteran-Owned Business NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

30. Your Marketing Strategy • Best Marketing Practices still apply! • Market definition & segmentation • Targeting • Value proposition • Differential advantage • Competitive analysis • Positioning • Are you clear on each of these in your commercial market? • Marketing Analysis Worksheet NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

31. Your Marketing Strategy • Three main goals: • Targeting • Where are my best opportunities? • Create awareness & branding • Who needs to know about you? • What should they know? • How will they remember? • Generate qualified leads • They should be calling you • Buyers & serious shoppers NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

32. Targeting • Your main target should be the Program Office responsible for using your type of product or service • The key person is the user, buyer, or Program Manager in that office • User/Buyer/Program Manager Role • Identifies and defines agency’s need for products or services. • Prepares buying instrument, generally known as a Purchase Request (PR). • After award they usually serve as the Contracting Officer’s Technical Representative (COTR). NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

33. Targeting • There are literally hundreds of thousands of government employees authorized to make purchases on behalf of their agencies • The shotgun approach is inefficient/wasteful, and almost never works • Select a limited number of appropriate targets and take “dead aim” NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

34. Build Personal Trust • Do Your Homework • Government buyers are swamped with appeals from potential vendors • To succeed, you must know your customer’s • Mission and Priorities • Organization and Systems • “Pressure Points” • Culture and Environment • There is a vast amount of information readily available to you if you just go look for it! NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

35. Build Personal Trust • In the government marketplace, there is NO SUBSTITUTE for personal contact! • Follow up, follow up, and more follow up • Provide outstanding contract performance, on time, at a fair and reasonable price • Develop and maintain good communication and working relationships with responsible agency personnel before, during, and after contract performance NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

36. Build Personal Trust • Sell personal service and personal responsiveness • In the case of small businesses, Program Managers and buyers rightfully want to communicate with business owners • Who have an intimate, first-hand knowledge of the company and its capabilities • Who can be held accountable for performance • Who have the authority to deliver on their promises • Just like you, they want to work with people they know and trust • The government has powerful grapevines NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

37. There is Help • Free Help • Vast amount of public information about • Web sites • Freedom of Information Act • Agency’s Small Business Office • GSA • Paid Help • Government-focused research firms • Historical purchasing data • Opportunity identification • Consultants NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

38. The Small Business Office • Small Business Office Role in each agency • They administer Agency’s small business programs, including monitoring the Agency’s small business-related procurement performance. • Promote the interests of small business in the Agency’s policies and procurements • Help identify buyers for small businesses to market in their Agencies. • Small Business Specialist • Advises you • Small Business Advocate • Fights for you NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

39. A Few Tips to Get You Going NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

40. BE PROACTIVE!!!! • Your GSA Schedule Contract is only a fishing license: You still have to fish! • One third of GSA Schedule Contracts reported $0 in sales last year. • Reason #1: No marketing • Reason #2: No patience • Companies that work the program create reliable, profitable sales NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

41. Tip #1 Identify Needs • Identify Specific Needs • Most government employees feel like they don’t have the funding they need to get their jobs done • They are looking for “solutions” • They don’t want to take the time to educate vendors NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

42. Tip #2 Get Endorsements • Endorsements from credible sources can give you much of the credibility you are going to need to get an agency to try you out • The best endorsements come from other government agencies with similar missions • Commercial customers with similar needs can also be used NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

43. Tip #3 Keep Score • Start tracking ALL of your sales to • Federal government customers • Eligible GSA Schedule users • State & local governments • Track results of marketing initiatives, both commercial and government • Trade shows • Advertisements • Direct mail, email, etc. • Remember that it takes a while to get the pipeline going NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

44. Tip #4 Ask for Feedback • Government users like to be heard and will usually tell you the truth about your products and your service • Look for ways to continue improving on what you are doing • That’s what your competitors are doing. • Be on the lookout for additional opportunities • If they like you, government users will give you a “heads up” on new opportunities NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

45. Tip #5 Use PR • Look for Public Relations Opportunities • Government users read the same trade publications as your commercial customers • Include press releases about government customers, government solutions, and government contracts NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

46. Tip #6 Seminars • If you provide a new, unique, or complicated service, seminars can be a powerful way to educate government (and other) customers • Government people are always looking for more effective and less costly ways of solving problems • Provide significant value, not just a sales pitch • Cultivate a reputation for expertise by providing expertise NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

47. Tomorrow’s To Do List • Add your GSA Schedule Contract number to your salespeople’s business cards • Issue a press release to all relevant trade publications announcing the award of your GSA Schedule Contract or any other news-worthy information about your government program • Contact all your current and past government customers and let them know you are now On Schedule • Examine your commercial marketing materials and ads to see if you are inviting government customers in or shutting them out NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

48. Questions??? NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”