It’s always difficult to take the first step on developing the Basis of Estimate (BOE in contracting terms) for a new proposal. Where should you start, and why? It’s all to common for a pricing professional not familiar with government contracting to get ahead of themselves and start bidding like they would with any commercial proposal. Don’t get caught in this pitfall.
The best place to start is with the ELINs/CLINs, etc. – the bidding spreadsheet provided by the contracting office. This will tell you how they expect the layout of your proposal to look. Sometimes they want management separated, or for labor to be broken out from materials, or any combination; other times they want the pricing by unit, square foot, or building. In any case, this pricing spreadsheet is where the proposal starts and ends.
Another important section is the Management and Administration pages. In this area you’ll find out about what management, safety, quality control, environmental, etc. personnel are required in the contract. Don’t miss this or think you can get away without following the specific requirements as listed. This is very important, you must read the requirements verbatim because if a disagreement ensues this is the first place the KO will turn.
The third area you always want to pay attention to is the list of inventory, which can be quantities, square footage, frequencies, and the like. Whichever format it comes in you need to look through this section thoroughly and identify every piece of equipment, etc. that is listed because you’ll be expected to provide service or repair when the time comes.
The last area of the proposal documents that requires special attention is the liability limits, often called the Repair Liability Limit (RLL) for service contracts. This number will tell you how much money your team is responsible for every piece of equipment that breaks. This number can make or break your bid. If the government says you’re responsible for $1000 for every repair and you bid $500 your overall price will be low but you’ll still have to cover up to $1000. This is a great way to keep your price down but can also come back and bite you if you’re not careful.
Today I’ve talked about four strategies for reviewing proposals that, if addressed correctly, can help you win and make money on almost any government contract.
Most people would assume that if you want to be in government contracting you need to set-up shop in Washington D.C., Norfolk Virginia, or San Diego. In my opinion, exactly the opposite is true. There are far too many contractor fighting for bids in these areas. It isn’t unusually to go to site walks with 100 or so of your best friends. This kind of competition makes winning contracts very difficult without taking a lot of risk.
I have a couple places, or more correctly ways, to limit the playing field and greatly increase your chance for success. There is, however, one pretty good size caveat to this plan: you generally must have a minority status such as a service disability, female minority, etc. to even look at these programs. At a minimum you would need to be a small business per the SBA, which is business with the past three years of average revenue under $37.5 million, so most business qualify.
For those that can meet this requirement the best way to limit competition for contracts is to become involved in a Multiple Award Contract. There are MACCs and MASCs with one being primarily for construction and the other for service contracts. These contract vehicles are generally for around five year terms, are capped at $100-250 million, and only have 3-5 competing companies for the life of the contract. Very small 8a companies often get a seat on these contracts and within five years they find themselves getting close to breaking out of the 8a program because they are growing beyond the $33.5 million cap for 8a firms. That’s serious growth in a matter of a few years.
For companies that can not qualify for one of these programs I would suggest staying to smaller markets or regions with several military bases or government installations in close proximity but that are not really well known in government contracting circles. Here are a few ideas: Albuquerque, NM; Huntsville, AL; San Antonio, TX.
If you really want to grow your government contracting business one of the best ways is to get involved in these MAC opportunities that are set-aside for disadvantaged small businesses. Good Luck!
Have any of you ever won a government contract only days before the expected start date? Well, for those of you who have, you understand how difficult it can be to hire a quality work force and have them in place in a matter of days. Often times, it’s not even possible but there are ways to deal with the situation to minimize the negative effect on the contact or your CPARS performance evaluations.
The first thing you should do is bring in a team of existing employees to help set-up all the standard administrative areas of the contract, which functions almost like its own small business. This should include AP/AR, HR, Operations, etc. When the basic structure is in place you can begin looking at individual candidates and show them the specific duties, location, etc. where they will be performing. Providing a framework for the new employees goes long way in allowing them to hit the ground running.
Of course, the key to making all of this work is getting people hired. Using online advertising and word of mouth can work well, but sometimes there’s no getting around the two week delay most employees have when changing jobs. There’s generally a pre-performance meeting with the government where they review the initial phase-in of the contract. It’s best to extend this meeting as long as possible to allow time to bring as many people aboard as possible. Often times signed offer letters can go a long way when trying to show the government that you have people coming to fill the positions.
Although government officials should give leeway for hiring personnel when they award very close to the performance date, but often this is not the case. These techniques should help mitigate the burden when hiring personnel for new contracts. Every contracting office handles these situation differently but it’s better to be on the safe side an come prepared.
What is a service contract anyway? Most people new to government contracting only think about construction contracts when they envision working for the federal government. Many do not realize the diversity and quantity of everyday functions that contractors perform for the federal government every day. Construction work is the process of building new or remodeling old facilities. Services contracts are the ongoing maintenance of these facilities after they are built.
Most government contracting offices separate their personnel and their structure into these two categories: construction and service. Service contracts are generally for a term from 3-5 years and constitute two major categories: Preventative Maintenance (PMs) and Service Work (Trouble Calls, Work Requests, etc.).
Preventative Maintenance is the category of service work where scheduled routine maintenance is performed on government owned equipment and facilities and is generally pre-scheduled work that is done on an interval decided on by the government in the RFP or laid out by the contractor per the government recommendations. It can also be based on environmental factors like the height of grass or amount of collected water, etc.
The other type is Service work or trouble calls where a problem is reported and a technician or repair person is sent within a set amount of time to repair or fix the problem.
As I hire more people in the government contracting arena I’ve come to find that the most diverse, knowledgeable people tend to be the ones who have worked for a variety of companies, under many different circumstances over the years. Obviously, this does not hold true in every case, but as a general rule, from the basic laborer all the way up to the executives those who perform the best are the most diverse.
Why is this? Is it because the best workers are go-getters and strive for the next best job or promotion? I’d say this is partially true as people who know they are good always look for advancing their placement; however, I don’t see this as the primary reason. I’d say diversity of experience makes people better employees who are adaptable and have more ideas and experiences than someone who has stayed in the same job with the same company for many years.
This theory seems to really hold true for upper mid-level managers. When you aren’t tied directly to a project or contract and you move into an oversight and review role you need to be a jack of all trades master of none type of person. You don’t develop this diversity by being in the same place with the same contracts for decades. This line of thinking holds true in the military as well. Generally speaking, officer duty stations tend to change every two to four years to allow managers to gain breadth of knowledge rather than depth.
Taking the leap and accepting a new position can be difficult as it often comes with a new city, new role, etc. but in the long-run it seems to benefit an employees ability to grow and mature into an asset many organizations covet.
Here are a few strategies that have worked for our company in the past to out-wit the competition and win contracts.
First off, don’t assume there is a level playing field. Contracting Officers, Contract Specialists, and Technical Writers generally have an idea of who they want to when a contract, or, who they don’t want to win. Knowing their preference can really help in preparing a winning bid.
The next point is to understand who the audience is. Often the contracting office isn’t really making the decision. It may be a high ranking official or a mid-level manager who has been tasked with the award. Knowing who to direct the proposal to can be very helpful.
Last but not least, make sure you are the low price. If your price is the lowest and you have even a moderately well organized technical proposal the government will generally accept it.
This happens all the time with new small businesses who delve into government contracting. They get all excited, bid on a good size opportunity and then forget about it. All of a sudden a letter comes in the e/mail stating that you’ve won and you start in five days! This happens more often than you might think.
The first thing is not to panic. Generally, the government is more behind the power curve than you are and probably won’t have the required pre-performance meeting on or before the start date; however, this doesn’t mean you don’t have to hire employees, buy equipment, set-up schedules, etc. You MUST start off on the right foot with your primary government contract representative which is probably a Performance Assessment Representative (PAR) or Contracting Officer’s Representative (COR). They both generally have the same function. They are the ones that track your performance and onsite work. The Contract Specialist and Contracting Officer generally only deal with money issues and important contract discrepancies. The person who can make or break your contract is the COR. Your on-site team will see them on a daily basis and must have a good relationship with this person.
So, after award you need to send a team of people to the site immediately. You can’t do this effectively from the home office. You need a person to handle deliverables, which are the plans, schedules, etc. that are usually due in the first few weeks of the contract; an HR representative to hire personnel, take care of badging, etc.; and finally a person who can make on the spot decision for the company and has a credit card or check book they are willing and able to use.
This should get you started and good luck!