Government Contracting

An introduction to teaming Contracting can be a strange business. Someone you work with today, could be working for a competitor tomorrow. And vice versa. Large procurements are often pursued by a team of companies, with each member bringing something to the table. As a whole, the team has more to offer than as individuals.
Other companies may be competitors, but they could also potentially be teaming partners. Be careful treating the competition like the enemy because you may need them as your business partner later. In fact, you are better off being friendly with them since even if you don’t end up teaming together, you may from time to time be able to compare notes.
In Government contracting, sometimes teaming happens because the Government requires a portion of the award to go to small businesses. When this is the case, a large company may team with one or more small companies. They will divide up the work to be done if they win and the work to be done in submitting the proposal. How things get divided is a matter of negotiation. Companies will also team to provide specialized expertise, staffing, geographic coverage, or customer presence.
The process of teaming is much more of an art than a science. Knowing who to team with requires knowing what companies have the expertise, customer presence, and other attributes. It also requires knowing who to talk to at those companies. As a project manager, you can focus on knowing the companies that do business with your customer and find out the names of the other project managers. If you go much further, you’ll have a personal “network,” and might cross the line into “business development.”
The fun really starts when the need for teaming has been recognized, and potential partners identified. Because teaming partners are potential competitors, sometimes you may have to approach them about partnering, without telling them enough about the opportunity for them to pursue it themselves. Furthermore, you may have to put your team into place before the actual RFP hits the street. The problem here is that you don’t know the final statement of work, making it difficult to define how work will be divided.
Once you have recognized the need for teaming, and have identified potential partners, it is a good idea to involve business development specialists and your contracts department, if you haven’t already and if your company has them. Before the negotiations go too far, you will probably need to exchange non-disclosure agreements with your teaming partners. These are usually a prelude to a teaming agreement which will describe the opportunity, who will do what in pursuit of it, and how business will be divided upon award. Teaming agreements are sometimes done in two parts, pre-RFP, and post-RFP, depending on the circumstances.

Be a Government Contractor: No experience necessary Under past performance the Government picks winners based on their track records and not just the promises in their proposals. This makes a lot of sense and is the way commercial companies often pick vendors. The result has been significant --- companies pay much more attention to successful performance and customer satisfaction because they know their past performance evaluations are riding on it.
The problem with past performance evaluations is that they make it difficult for new companies to do business with the Government. In effect, they have no track record to evaluate. In theory, these companies are not penalized, they are merely given "neutral" past performance ratings. In truth, this is the kiss of death.
If you are a company without previous Government contract experience, you can still pass a past performance evaluation. But you have to understand the process to make it work. Most past performance evaluations follow the process recommended by the Office of Federal Procurement Policy (OFPP), which has published a best practices manual for conducting past performance reviews.
Often the evaluation of past performance includes a survey of customer projects that are similar to the work being proposed. The main focus points of this survey include whether you submitted deliverables on time and whether you completed the project within budget. You can emulate a past performance evaluation by identifying work you have done that is similar to the work required by the Government procurement, and completing the survey yourself.
Often commercial projects and Government projects use different terminology to describe essentially the same things. To make it easy for the Government to evaluate, you should use their terminology. You should present your commercial projects in the terminology used on the past performance survey form. You should also describe your project's scope, processes, and requirements using the terminology of the RFP. Finally, you should also align the project's attributes with the evaluation criteria described in the RFP for the procurement.
Your project description should read like it was a Government project, even though the customer was a commercial customer. The main difference between commercial and Government projects is often that Government projects have more structure. Government project processes are usually formal and documented, as are milestones and deliverables. Making your commercial projects read like Government projects may mean emphasizing the structure of your processes, milestones, and deliverables.
Finally, on a past performance evaluation, the Government may call the customer. You must make sure that the customer is aware they may call, that they phone number you supply works, and it is a good idea to know what the customer might say about you. A successful past performance evaluation requires the participation of your customers, an imposition commercial companies are often reluctant to make. You might want to send the customer a copy of the survey form so they'll know what is coming.

Documenting a Best Value Selection The government has moved away from maximized competition and lowest responsible, responsive pricing to Best Value Procurements. Best Value is a gray area that is open to subjectivity and therefore we offer the following comment.
The term's "best value" and "lowest overall cost alternative" are not mutually exclusive. A best value analysis lends itself to determining the "lowest cost alternative." Best value procurements involve tradeoffs between cost and technical. For example, if one vendor offers a high-end computer at a higher price, while another vendor offers a lower-end computer at a lower price, then the higher-price computer may in fact be the best value and result in the lowest overall costs to the agency. This is true if the greater computing power of the high-end computer increases the efficiency of the agency's operations, thereby saving the agency money when compared to the capability of the lower-end, lower-priced computer. The agency should document its decision to demonstrate that its evaluation of the vendors' responses to a Request for Quotes (RFQ) was reasonable and in accordance with the criteria outlined in the RFQ.
There is no legal requirement that the agency quantify any cost/technical tradeoffs in dollars. An agency should use whatever evaluation approach (e.g., narrative, quantification) best suits its needs, while at the same time being sensitive to the streamlined nature of the Federal Supply Service process. For example, agencies can use narrative explanations or its cost/technical tradeoff, so long as the evaluation is reasonable and consistent with the criteria identified in the RFQ.
If an agency has concerns that it may not be able to explain why a higher-cost item represents the lowest-cost alternative to meet its needs, the agency should look to the technical aspects. These may include warranty, computing power, reliability, past performance, or service locations. The question is whether the technical aspects provide a better deal to the agency than a comparable lower-priced item. For example, a higher priced product with a 5-year warranty may in fact be a better value at a lower cost to the agency than a lower priced product with a 2-year warranty.

Why You Should Always Ask For A Debrief Whether You Win or Lose You submitted your proposal, and then waited anxiously to hear whether you won or lost. You had your hopes up, and maybe got exactly what you were wishing for: the contract is awarded to your company. You have millions of things to take care of since you now need to start up the program. You may not even have enough time to plan your win party because you are so busy. Or, maybe you have lost and are thoroughly disappointed. After all, you have given it your best, spent scarce resources and sleepless nights, and witnessed heroic efforts from your entire team putting the proposal together. Whether you won or lost, however, you cannot consider your proposal effort complete until you have asked the government for a debrief. You are bound to win a lot more proposals if you consider lessons learned after each pursuit to improve your proposal management process, your knowledge of your customers, and your offers.
So, what is a debrief? The government is required by FAR 15.506 to provide official feedback on your proposal to your company, if you make a request within three days of the notification. During the debrief, the government contracting officer, with support from other evaluators, discusses strengths and weaknesses in your proposal, provides the overall evaluated price and technical rating of the winner, offers summary rationale for award, and provides "reasonable" responses to "relevant" questions.
It makes sense that a debrief after a loss is a way to understand what you missed and what you could have done better, but it may seem redundant to ask for a debrief when you won. Obviously, they loved your proposal and chose you, so what more could you ask for? Besides getting a reassurance that you got things right, there are a couple of important reasons you should ask for a debrief.
One reason is that you may be surprised as to what the government thought was the most compelling part of your offer. What swayed them to your side may not have been what you thought was the most important part. Now that you have a vested interest in keeping them happy not just as your evaluator but as your full-fledged client, this information is vitally important to make sure that your company meets and exceeds client expectations. You also need to share this information with your business development team to replicate the successful techniques in your next proposal to this customer.
Another reason is that even winning proposals have weaknesses, and you'd better know about yours. If this is an open competition contract, you are never secure from a scorned, losing competitor finding a legitimate reason to protest and get the proposal re-competed. Since it is a normal practice for a losing competitor to get a debrief, they are guaranteed to get information on their proposal weaknesses, and would then have a chance to make informed changes in the next go-round. If, simultaneously, you fail to get a debrief because you were a winner, and assume that all you need to do is resubmit your old proposal with minor tweaks because it has already won, think again. It is not totally unheard of to lose in the second go-around. Proposals are not read, they are scored. Even if yours got the higher score and won, you may still have had some weaknesses, or some areas that were rated "good" but not "outstanding". Your competitors will have corrected weaknesses in each section to get the highest score. You will have made no changes because you didn't know that some of your sections may have gotten an average score. Think how frustrating and unfair it would be to lose what you had won.
If you have lost, request a debrief immediately, no matter how uncomfortable it may seem. It may feel like going willingly to a session where the government gets to add an insult to an injury. Debriefs are often tense and formal, and not particularly forthcoming with information because many government employees have concerns of their own. First, there may be a simple human aspect of not fancying being the "bad guys" because many understand that it takes money, sweat, and blood to prepare a proposal - so the natural tendency is to keep the encounter as short as possible. Second, the government always worries about your launching a protest based on what you learn in the debrief, so they have to watch their every word. Protests are an overwhelming concern because of the resulting project delays, endless paperwork to investigate and adjudicate, and possible questioning from the Hill.
In order to make the best of your debrief, you need to assuage the government's concerns of your launching a protest. You also can put people at ease by not acting on the natural temptation to express sour feelings or act defensive. You need to put yourself and your colleagues in a right frame of mind to think of the event as an important milestone in a long-term relationship. Your attitude going in should be forward-looking, with sincere curiosity and good sportsmanship. You've hit a snag and would like the government to provide some insight into how you could better meet their expectations in the future. Tell the government that while you lost a proposal this time, you have full intention of continuing to work with them and you value your relationship. Phrase your questions to be entirely focused on lessons learned and constructive resolution. Smile, look the government straight in the eye, hold your head up high, and take detailed notes.
At the same time, do not let the government get away with glittering generalities that you do not understand or that they fail to fully explain. Prepare specific questions on the features of your offer to verify whether your assumptions were correct, and if and why the government liked or disliked each key feature of your offer. Draw information out of them concerning what they think would get the specific sections scored higher; what would be the ideal offer that you could provide, even if it is unrealistic; what benefits they would like to see that weren't obvious; and how you could improve your writing, graphics, and features. You should leave the meeting with a clear understanding of what you need to do to be more competitive in your next solicitation.
In summary, requesting a debrief after you have won or lost a bid is a proposal management best practice. Come to the debrief well-prepared, having reread the proposal, and bring a copy with you for quick reference. Take detailed notes to share with your colleagues and management, and conduct a formal lessons learned session shortly thereafter. You will be surprised how much your win rate goes up.

Fedbizopps.gov – How to Win Federal Contracts While Fedbizopps.gov lists bid opportunities, you need to know how to pursue federal contracts if you want to win them. To win the bids you find on FedBizopps.gov, you need to learn how to market the Federal Government.
In addition to the announcements and notices themselves, Fedbizopps.gov provides features like keyword searches, RFP downloads, solicitation notifications, interested bidders lists, and more. You can also find potential teaming partners. The information available on Fedbizopps.gov includes solicitation files, sources sought notices, draft RFPs, and other documents related directly to the solicitations. Government buyers often use Fedbizopps.gov announcements to conduct market surveys to locate qualified businesses.
The upside for contrators is that you get immediate access to information about thousands of solicitations. The downside is that it makes it easy to fall into the trap of looking for solicitations after they are announced and bidding as many as possible.
If Fedbizopps.gov is the only way you learn about leads, then you discover them at the same time as everybody else, after it's too late to gain the kind of insight you need to have a competitive advantage. The trick is to discover leads before they are posted on Fedbizopps.gov. To do this you need contacts, relationships, and a Federal marketing program. You need a business development process that puts you in position to win, before the RFP is released.
When you combine Fedbizopps.gov with a strategic marketing plan and a process for identifying and capturing leads, you will be more successful. If you just use it to search for bids and respond blindly, you will frequently lose becuase someone else has the competitive advantage. Advance marketing and the right pursuit process are how you become the one with the advantage.

How to Become a Government Contractor Figuring out how to become a "Government Contractor" can seem difficult, even intimidating. Relax, if you follow the right steps you can become a Government Contractor. Even though are a ton of rules and regulations, most cover a whole range of circumstances that won't apply to you, at least not all at one time. These rules are contained in the Federal Acquisition Regulation (FAR), a huge document that spells out the rules for Government contracting. Luckily, you don't have to memorize it to become a Government contractor. 
Most of the rules apply to services businesses. If you deal in off-the-shelf products or commodities, doing business with the Government can be as easy as processing a normal customer's credit card. There are also thresholds to consider. Below a certain amount,the Government can pay with a purchase card (credit card), above a certain amount and they must issue a Request for Quote or a Request for Proposal and get competing bids. It is above these thresholds, which can vary by agency, where things can get complicated. If you are selling services things tends to get more complicated, more quickly. You will have to register at sam.gov before you can become a Government contrator.
One of the hardest parts of the transition to becoming a Government Contractor is that you may need a completely different kind of accounting system, one that provides pricing in the right formats, with sufficient justification for Government Contracting. The next hardest part is that the process is based on contracts. Service contracts between businesses are hard enough, but the Government has to comply with a myriad of laws and rules that have been created over decades to counter every possible scandal and corruption. Most Government Contractors employ specialists in both contract and finance who understand the language and the rules.
Doing the work on the contract can be fairly straightforward. But first you have to get a contract with the Government. This is not as hard as it sounds. For most purchases above a certain threshold, the Government publicizes what they are going to purchase, and nearly anyone can bid. The reality is that many procurements require specialized capabilities and expertise, greatly limiting the number of companies who can respond. 
Another major consideration before you get started is how you want to be classified. For example, there are special programs for small businesses, and even special programs for small businesses that are considered economically "disadvantaged." Getting started as a Government Contract will be significantly easier if you are a small business or small disadvantaged business. Among the rules that apply to Government Contracting are requirements that are certain percentage of procurements go to small businesses. There are also Mentor Protege programs in which a large company is incentivized by the Government to help a small business get started in Government contracting.
You will also be categorized according to the capabilities and offerings of your business. In order to be able to code and classify businesses, the Government uses the North American Industry Classification System (NAICS). The forms you fill out will require you to supply the NAICS codes that you qualify for.
Once you have registered and start looking for contracting opportunities, you may find so many opportunities exist, that it's hard to find the opportunities that apply to you. And when you do find an opportunity that applies to you, you may find it hard to respond in time. You will also find it hard to achieve success without customer and competitive intelligence, but you've got to start somewhere. When you do try to bid, you're going to have a tough time meeting "Past Performance" requirements if you've never done business with the Government before.
One way to get started is subcontracting. You can do part of the work on a Government contract as a subcontractor. And along the way you gain experience. All you need is a good relationship with a prime contractor (usually a larger, more established Government contractor), a business opportunity/RFP, and a reason why the prime-contractor should include you rather than do the work themselves.
As you gain experience you will find that it is easier to succeed when you stake out a territory, whether it's a particular agency, a capability, or a region. It is far easier to learn who to contact, who the competition is, and to monitor business opportunities when you narrow it down to something more manageable. It is also easier to gain the customer and competitive intelligence needed to win.
Does all that sound complicated enough? Let me summarize. If you stay under the thresholds ($2500) for purchase cards, doing business with the Government is just like doing business with a customer who pays by credit card. If you stay under $25,000 you won't have to deal with RFPs and most of the FAR requirements, but opportunities won't be advertised. If you go above $25,000 you're on your way to becoming a Government Contractor. You'll need to register. If you're going to stay a Government Contractor, you'll need the to develop the right accounting and contracts management capabilities. If you're going to succeed as a Government Contractor, you'll need to learn the ins-and-outs of business development in the Federal marketplace.

How to do business with Uncle Sam So you want to do business with Uncle Sam? The approach you take will be based largely on the type of business. Do you sell products or commodities? Are you looking to provide services or solutions? Or are you interested in seeking a grant? Each type of business requires a different approach to marketing and goes through a different procurement process within the Government. The processes that the Government uses are heavily regulated. The principle document that governs Federal procurement is called the Federal Acquisition Regulation (FAR).
One thing that they all have in common is that the Government publishes a request for what it wants, and then those who are interested in providing it respond in writing in the format requested. Another thing they have in common is that if all you do is wait for them to publish what they want and then respond, you probably won’t be successful. This is less true for product or commodity purchases, but even there it separates those who occasionally do business with the Government from those who are consistently successful at it.
Various government purchasing offices maintain supplier lists that they use for notifying suppliers when they wish to purchase something. For products/commodities, they often use “Request for Quotes” or “Invitation for Bids.” For small ticket items (less than $2,500), Government end users can purchase directly via credit cards. Most agencies are moving these lists into the electronic age and are using web-based catalogs of items. The Department of Defense operates a centralized contractor registration site, but you should also register with the individual procurement offices that you may be dealing with. Regardless of the format or media, it is important to get on the supplier lists so that the agency will know that you exist and so that you can receive the notifications.
Getting on all these lists means finding the acquisition offices. You can do this via the web. First you have to figure out which parts of the Government you may be dealing with. Who in the Government might be interested in purchasing from you? The Federal Government is so large that you can’t address the whole thing (at least not all at once). Instead you should target those agencies or departments that best match what it is you are offering. If your business is local or regional, it is a good idea to seek out agencies with offices in your area and register with them.
When dealing with Uncle Sam, it is a good idea to have multiple ways that Government customers can purchase from you (just like people expect to be able to pay by cash, check, credit card, ATM card, etc.). Only for the Government, you want to have multiple contract vehicles. If the price exceeds certain thresholds, the Government can’t simply buy something. They have to follow a regulatory process designed to ensure competition, appropriate pricing, and prevent corruption. This process usually takes the form of a contract that once signed enables the Government to purchase from you. Contracts are usually announced, competed, and awarded in a process that can be lengthy. However, some agencies employ Basic Purchasing Agreements (BPAs) and other contract vehicles that are highly prized because they are quick to put in place and easy to use once signed. Another vehicle to pursue is the General Services Administration (GSA) Schedule, which is a large catalog of items that can be purchased by any part of the Government. If all else fails, the Government may be able to purchase from you by using the GSA Schedule. Vehicles that can be used Government wide, like the GSA Schedule, are especially useful if your business is national or equally applicable to all agencies.
More complex purchases are procured by publishing a Request for Proposals (RFP). Notice of an RFP release is published in the Commerce Business Daily and electronically at FedBizOpps.gov. Often, the size and complexity of these procurements requires multiple companies to join together and form a team to respond. One will be the prime contractor, and the others will be subcontractors.
Many Government contractors do business by simply monitoring RFP releases and bidding on those they think they can win. As is frequently the case in life, the easy approach is not necessarily the most effective. To achieve consistent success, you must have a marketing program to develop customer awareness ahead of RFP release, while the customer is still considering what they need and what to do about it. To do this, you must target specific offices and get to know them long before you actually start doing business with them.
One of the biggest difficulties in doing business with Uncle Sam lies in knowing which offices to target and getting to know the future customer. Once an RFP is released, putting together a compliant, persuasive, and winning proposal can also be difficult. But more often than not, the battle is won or lost by your marketing, before the RFP has even hit the street.

Selecting Contract Management Software: A Case Study "I could satisfy the government, but I couldn't give managers the information they needed to do their jobs," says Shannon Winston, Controller for Apex Environmental.
Apex Environmental, like many professional services firms with a competitive edge, offers a widely diverse group of services to both government and commercial clients. Managing and accessing data is critical with every contract. Recently - after years of using multiple software systems, supplemental spreadsheets, and manually transferring data from one incompatible system to another - Apex Environmental purchased and deployed a single software system (developed by Wind2 Software) that handles the entire operation and serves both public and private sector clients with an integrated package. The new system streamlines planning, management, and reporting requirements for the entire company. It also helps contract managers win more contracts, manage them more efficiently, and make them more profitable because it automates the entire process - addressing everything from the initial technical proposal to the DCAA close-out audit with greater efficiency and reliability.
Business Complexities
As a comprehensive health, safety, and environmental services firm, Apex Environmental specializes in consulting and remediation work. The firm's professional, technical, and field experts are located in 10 offices across 25 states, and services include compliance, environmental assessments, remediation, health and safety, program management, energy management, and information technology.
All clients, of course, require careful tracking, reporting, and invoicing of actual labor and direct project expenses. The company's government clients, however, also demand strict adherence to a host of requirements as defined by CAS, FAR and DCAA. In working with their government contracts, Apex staff members must meticulously account for allowable overhead expense (which can vary considerably from contract to contract); they must follow strict guidelines for time and expense entry; and they must report project direct and overhead charges on pre-approved government forms.
In addition to being an environmental consultancy, simply charging fees for professional services, Apex also has a $6 million construction division that performs actual remediation work in the field. In support of this division, Apex staff must also handle construction-related activities -- generating purchase orders, managing subcontractors, and hiring and paying construction workers.
Searching for Solutions
Apex Environmental has attempted to handle this complex mix of data tracking and reporting requirements in a variety of ways over the years. During its first few years in business, the firm used a manual record-keeping system. Quickly outgrowing the manual system, company leaders purchased a basic accounting program in an effort to automate the operation. That program managed the financial aspects of the business, but it offered no support for the governmental reporting requirements.
Thinking they had found the answer, Apex purchased an accounting system designed specifically for government contractors. While this program did a better job of managing information needed for government reporting, its project management and general reporting capabilities were weak. In an attempt to make up for the lack of functionality in the accounting software, office personnel used several spreadsheet and word processing programs to generate reports and other documents in the formats they needed. As a result, staff members were constantly re-entering data from the accounting system into these supplementary programs - a time-consuming and frustrating duplication of effort.
"I could satisfy the government, but I couldn't give managers the information they needed to do their jobs," says Shannon Winston, Controller for Apex Environmental.
When the firm decided to replace this piece-meal system with a more powerful and useful software system, the most important requirement for the new software was flexibility.
"We didn't want different software for different types of work," explains Winston. "The software we were looking for had to have the flexibility to do everything we needed it to do on both private and government-sector work."
Cost was another consideration. Apex leaders wanted a system that could meet all current needs, expand its functionality to meet future needs, and still sell for a reasonable price. The company simply did not want to spend $100,000 for a software system, even one that could handle their needs.
Meeting Contract Requirements and Business Goals
After extensive investigation and product comparisons, Apex Environmental decision-makers chose a business system from Wind2 Software that fully integrates general accounting functions with project invoicing and reporting, budget control, profit analysis, employee management, cost proposal development, accounts receivable tracking, and government contract management. The system is flexible enough to handle the company's mix of clients and activities today, and its scalability makes it capable of doing more as the company grows.
"We needed an application that would let us focus on being a smart business first, while still handling our government contract specific needs completely," says Winston. "Wind2 enables us to efficiently handle all of the requirements of our federal, state and local government projects, without sacrificing good, solid and simple business practices. That flexibility is really what makes this program so well suited to a company like ours that has so many different activities and a mix of government and private sector work."
Like all government contractors, Apex Environmental must comply with all government accounting requirements (e.g., FAR, CAS, Incurred Cost proposals, DCAA guidance) and prepare for government audits. According to Winston, the company is saving hundreds of man-hours every month by eliminating the use of spreadsheets and simple accounting software to meet the stringent audit and reporting requirements of their government contracts. These resources are now freed to support ongoing work and to land new contracts.
Apex's new software is fully equipped to meet the 17 contract and billing types defined by DCAA, including fixed price, cost-plus, and time and materials. It addresses "Other Transaction Authority" (OTA) contracts and handles timekeeping practices, direct and indirect costs, overhead and G&A rates, unallowable costs, pre-award costs, incurred cost proposals and invoicing properly.
Within two months of installing the new software, Apex was able to reduce its accounts payable staff through attrition from six people to five. Staff members no longer need to manually calculate expense rates or enter data into two systems to prepare reports. And they have immediate access to financial and project data that has been unavailable to them in the past.
Winston explains it this way: "When a vendor calls asking about a payment, staff members can now query the database to find the answer. Instead of searching through old hard copy reports and files, we simply find the vendor record and drill down into the database to see all the related invoices and payments."
According to Winston, Apex Environmental now has the system it needs to handle its complex spectrum of government and private sector work. And company leaders know that as their business continues to grow and evolve, the Wind2 system's inherent flexibility and scalability will let them expand its functionality in any direction they chose to go.

Questions To Ask During a Proposal Debrief When the customer announces that an opportunity you have bid on has been awarded, you should request a debrief to provide feedback on how your proposal was evaluated. On Federal proposals, they may be required to provide one when requested. If you have lost, the feedback can help you improve your future proposals. But you should request one even when you win, and for exactly the same reason. A debrief can help you understand how the customer perceived your proposal and help you make better decisions. Keep in mind that you don't want to impose on the customer and that some customers will be concerned that you are going to protest their decision. There may be some questions that they are not comfortable answering, and you shouldn't push. If you do not intend to protest, you should make it clear to the customer that you just want feedback so that you can provide them with better proposals in the future --- it's in their interest too!
Here are some questions to consider asking during a debrief:
Basic questions:
Who won? How many bids were received? What was your overall score? Was your score closer to the top or close to the bottom? What was the winner's score? Did the winner have the lowest price? Did the winner have a higher score on the technical evaluation factors? If price was a major factor and you lost:
Did you score higher or lower than the winner on technical factors? Did you scope the level of effort (number of people/hours) appropriately? Was the skill level of your proposed staffing too high? Did the winner propose more or less staff/hours? By how much? If you scored higher on technical factors but lost:
Did you lose because your higher score on technical drove up the cost? If your price had been the same as the winner, would your proposal have represented the best value? If you scored lower on technical factors:
How did your staffing score? How did your technical understanding and approach score? How did your past performance score? Did you have any compliance issues? If the incumbent won:
Did the incumbent score higher on the technical evaluation factors? Did the incumbent score higher on experience? Would a more clear statement that you would retain the incumbent staffing have improved your score? Miscellaneous:
How did the presentation and appearance of your proposal stack up against the competition? What differentiated you from the other bids? Was your proposal easy to navigate and score? Was the appearance of your proposal better, worse, or about the same as your competition? Did it contain any fluff or content that should have been substantiated better? Is there anything the customer would recommend for you to improve?

Introduction to contract types and pricing models If you have a written RFP, it will probably include instructions for how to format the pricing and contractual details. If not, how you format your pricing is up to you. If you are looking for a little guidance to get started, consider the contract types below. Each has a different way of accounting for costs, fees, and profits. There are contract types not on this list, and many, many variants. Depending on what you are proposing you might follow one of the structures below or do something totally different. The final judge of whether you have presented your pricing properly is your customer. Consider how they will want to pay for what you are proposing.
Time and Materials (T&M). Payments are based on hourly rates and costs of materials used, up to a not-to-exceed amount. Cost-Reimbursement. Reimburses the Contractor for incurred costs. This pricing arrangement enables contractors to take on financial risk, but it provides little incentive to control costs. Cost-Plus-Fixed-Fee (CPFF). Reimburses the Contractor for costs and adds a negotiated fee (i.e., fixed dollar amount or percentage). Cost-Plus-Incentive-Fee (CPIF). Reimburses the Contractor for costs and adds a negotiated fee, which is adjusted by a formula based on target costs, providing an incentive to keep costs low. Note: This type of contract may also include fee adjustment as an incentive for the Contractor to meet or surpass negotiated performance targets. Cost-Plus-Award-Fee (CPAF). Consists of a base fee (which may be zero) and an award fee, determined at periodic milestones set forth in the Contract. Firm-Fixed Price (FFP). The price is set and fixed by unit of product or measure. FFP contracts impose the maximum risk on the Contractor and minimum administrative burden on the customer. Fixed-Price Contract with Escalation (FPE). Establishes a fixed contract price, but provides for adjustment based on specified contingencies, such as an economic price adjustment. Fixed-Price Incentive (FPI). A fixed-price contract that provides for adjusting profit and establishing the final contract price by application of a formula based on the total target cost.

Grants vs. Contracts: What is the Difference? Commonly folks have asked me what the technical difference is between a contract and a grant. The difference is not about the dollar value or who the buying entity is nor the kind of work being done. Instead it is about the legal concept of default. In my eyes, the corner stone of whether something should be called a grant or a contract lies in whether one is legally bound to produce results as one is in a contractual relationship or whether you are simply granted funds to do something. Did you get that nuance? Perhaps that is oversimplifying it.
Essentially, a contract is a legally binding document in which the parties make promises to deliver a product or service in exchange for consideration (usually money.) A grant on the other hand is when one party grants funds to another party to do something, in reasonable hopes that the task can be accomplished. If the task is accomplished - great, everyone is happy and it could lead to more grant funding! On the flip side, if the task is not accomplished there are most likely no legal ramifications (assuming you have broken no other laws) as would be the case in a contract.
If we were to compare and contrast the two mechanisms we would say that a contract has two parties exchanging promises where one party delivers and one party pays. A grant however has two parties where one party gives the money and one party performs the objectives in hopes of achieving them. Do you see the difference now?
In summary, the difference between the two mechanisms - grant vs. contract mainly deals with the legal concept of default. If you do not deliver under a contract you are in "default" and can reasonably assume some justifiable action may be taken against the party that did not hold up its end of the deal. However, if you do not deliver under a grant, minimally you can rest assured that you will not deal with financial or legal repercussions.
However, from a business perspective, if you do not produce under either mechanism it is fairly likely that you will not receive those kinds of funds again in either a grant or a contract form. So as much as you might not be heading off to jail, you may find yourself wondering where your next meal is coming from and defending your good name.
Accordingly, if you are in the Government Contracting arena it is always wise to make sure you understand which instrument you are working under. If you are faced with using a contract rather than a grant and you have some concern surrounding whether you can attain a goal or the task at hand, you will definitely want to use a "best efforts" type contract. This will allow you to operate as if it were similar to a grant where you have high hopes of attaining said goal, but ultimately not guaranteeing you can deliver.

Government Proposals vs. Private Sector Business Proposals Many companies do business exclusively by responding to government RFPs. Specialists are often employed by government contractors to help write their proposals. Government procurement processes are very complicated and highly regulated. And the regulations and process is different for each government. Federal, state, local, and international governments all have different regulations and processes.
Many government procurement processes are based on those used by the Federal Government. The Federal Acquisition Regulation (FAR) is the primary set of rules governing how the Federal Government manages the procurement process, including how it issues RFPs and receives proposals. The FAR specifies that at certain dollar thresholds, business opportunities must be announced and anyone who wants to bid may obtain the RFP and submit a proposal. The RFP contains a “statement of work” describing what is to be proposed, instructions for how to format and submit your proposal, and evaluation criteria that tell you the scoring and selection process. Submitting a government proposal involves responding to the RFP.
With a Government proposal, the due date is absolute. You cannot be 1 minute late. It is not unusual for companies to ship two complete copies, just in case one gets lost in the mail. When companies issue RFPs, they usually have due dates, and sometimes they even mean it. But most of the time you have a little wiggle room if you run into a problem. You have to manage things differently when your due date is absolute.
Businesses often use proposals to provide a written description of a transaction as a basis for approval. Large companies sometimes even issue RFPs and use proposals as a competitive process to begin negotiations. Unlike Government proposals, there is little or no regulation of proposals between businesses, although larger companies may be bound by a significant amount of policies and procedures.
In a Government proposal, it is critical to be strictly compliant with everything in the RFP. In a business proposal, you can be as non-compliant as you think you can get away with. And the customer might not even mind if it makes sense or saves them money! There are many kinds of proposals used in the private sector. A brief list might include:
Investment proposals Real estate proposals Sales proposals Banking proposals Funding proposals Insurance proposals Construction proposals Product development proposals Marketing proposals Janitorial service proposals Joint-venture proposals Software proposals Advertising proposals Etc., etc., etc.

What government contractors can learn from commercial proposals Government contractors get most of their business by writing proposals. As a result, they put a lot of effort into proposal writing. They develop formal processes, send people to training, build infrastructures, and hire specialists.
Writing a proposal in response to a government RFP can be a complicated regulatory-driven process. The complexity of the task can make it difficult to see the forest for the trees. A government proposal ultimately has the same goal as a commercial proposal --- to sell. Indeed, government contractors can benefit from studying commercial sales and proposal techniques.
In a commercial environment, the proposal is usually not what determines whether you get the customer's business. Your company's relationship with the customer is far more important.
With the process of doing business so heavily regulated, it is often easily to lose sight that you must have a relationship with your customer, even when it is the government. That is exactly what the regulations are designed to prevent. In the name of preventing corruption, government procurement processes can impede the contractor’s ability to understand its government customers and be responsive to their needs.
Having a relationship with your customer is necessary to understand their needs and does not have to be a corrupting influence. One of the reasons that commercial firms focus on the relationship is that they may never get any guidance from the customer in writing regarding what to propose. While a government contract expects to get a meticulously detailed RFP, no matter how carefully it is prepared, the RFP will never address everything the customer wants. Government contractors who develop a relationship with their customers are able to prepare proposals that address the customer's unwritten requirements as well as their written ones.
For commercial companies, the proposal is often just a draft for setting the contractual terms. If the customer is interested in doing business with you, you will have a chance to repair any deficiencies in the proposal.
Commercial companies also have the luxury of being able to give the customer what they want, and not (necessarily) what they ask for. Unlike a government proposal, you may not have to achieve 100% compliance. If a commercial company thinks they know a better approach, they can ignore what it says in the RFP and still win. A government contractor must respond to what is in the RFP. However, it is important to understand that what made it into the RFP may not be an accurate reflection of what the customer actually wants. Having a relationship with your customer will enable you to better spot a discrepancy like this and present a solution that while it complies with the written request also delivers what they really want.
Commercial proposals do not have the artificial split between pricing and technical approach. Indeed, the evaluation of a commercial proposal often starts with looking at the price and then seeing what they will be paying for. A vendor can promise anything, but they can be expected to deliver the things they price. No plan ever survives in the real world anyway. Approaches, methodologies, etc., can be changed after award. The key is to make sure that the pricing is reliable.
Government RFPs often require approaches and methodologies to be spelled out in intricate detail. And those who evaluate them may not even see the pricing. But they still have the same basic questions --- "what can I expect," and "how do I know you'll live up to those expectations." Many acquisition reform trends (past performance, performance based contracting, best value, etc.) are intended to address these questions. In spite of these reforms, it can still be difficult for the government to perform an evaluation the same way commercial firms do. If you understand this and know what considerations are important to your customer, you can address them even if the procurement process does not ask you to.

What a private sector company can learn from government proposals Many companies do business exclusively by responding to government RFPs. Government procurement processes are very complicated and highly regulated. Government contractors often employ proposal specialists and implement formal processes to improve their proposals.
The primary set of rules that define the composition and formatting requirements for Federal Government RFPs and the procurement process is called the Federal Acquisition Regulation (FAR). The FAR specifies that at certain dollar thresholds, business opportunities must be announced and anyone who wants to bid may request the RFP and submit a proposal. The RFP contains a “statement of work” describing what is to be proposed, instructions for how to format and submit your proposal, and evaluation criteria that tell you the scoring and selection process. Submitting a government proposal involves responding to the RFP.
With a Government proposal, the due date is absolute. You cannot be 1 minute late. It is not unusual for companies to ship two complete copies, just in case one gets lost in the mail. When you are responding to an RFP issued by another company, they usually have due dates, and sometimes they even mean it. But with a private sector proposal you usually have a little wiggle room if you run into a problem. You have to manage things differently when your due date is absolute. This is one reason that most government contractors have formalized proposal processes.
In a Government proposal, it is critical to be strictly compliant with everything in the RFP. In a business proposal, you can be as non-compliant as you think you can get away with. And the customer might not even mind if it makes sense or saves them money! The necessity of being absolutely compliant is another reason why government contractors need formalized proposal processes.
Companies who do business in the private sector usually have less formality in their proposal processes. They also have less consistency from one proposal to the next, depending on how much consistency there is in each deal. If every customer engagement is different, as is the case for most service businesses, then every proposal is potentially different. If every sale is the same or highly similar, as is the case for most product businesses, then every proposal may be similar. But there is no outside force or regulations imposing structure on the proposal process, such as there is with a government proposal.
Even in the most chaotic commercial environments, however, there is much that can be learned from government proposal processes. Even though the structure of a commercial RFP isn’t regulated like it is for the Federal Government, you should look for an RFP to address:
Formatting, outline, and submission instructions for the proposal; A statement of work describing what is to be done or delivered; and An evaluation criteria and process describing how the customer will evaluate the proposal Government proposal writers can expect to find this information in the RFP. But a private sector RFP may or may not address them. If not, then you should ask the customer for clarification. Many of the questions people have about how to do their proposals are really customer specific and are a result of not getting this information from the customer.
Even if there is no written RFP at all, you can emulate the process. Simply identify the customer’s requirements through verbal communications and meetings and then write them down yourself in a list. Make sure that your list of customer requirements includes the formatting/outline instructions and evaluation criteria. This list will enable you to track the requirements through the writing process to explicitly ensure that all are addressed.
In formalized government proposals, a cross-reference matrix is often built by combining the formatting/outline instructions with the statement of work and evaluation criteria into a proposal response outline. The cross-reference matrix shows where each RFP item is addressed in the proposal. In a government proposal everything in a proposal is tied to the customer’s requirements (requirements written in the RFP and those gained from intelligence gathering activities). The cross-reference matrix gives you a tool to allocate everything that you want to go into your proposal in such a way that it corresponds to the customers instructions, work requirements, and evaluation criteria. If you identify each of these types of customer requirements, then you can emulate the cross-reference matrix approach. This will help you write the proposal, ensure compliance, and can even be included in the proposal to show the customer that you have addressed all of their requirements.
The Government formally evaluates proposals in a process that checks for compliance with all RFP requirements and incorporates a scoring mechanism that reflects the evaluation criteria in the RFP. One of the goals when, responding to a government RFP, is to make the proposal easy to evaluate. Not all companies that issue RFPs will go through a formalized evaluation process. However, making an explicit attempt in your proposals to address their requirements while reflecting their evaluation criteria can only help your chances, even in a completely subjective evaluation. In order to make your proposal easy to evaluate you need to have itemized evaluation criteria and an understanding of the evaluation process. Any staff who contact the customer should make it a priority to acquire this intelligence.
If there is one universal rule for proposals it would have to be plan before you write and write to the plan. The goal of proposal planning is to ensure that the writing is correct the first time. Writing and re-writing takes too much time when the deadline clock is ticking and doesn’t provide any means for quality assurance. For each item in your proposal outline, you should plan:
Which customer requirements it will address Which evaluation criteria it will reflect What are the bid strategies What themes, selling points, discriminators, or other points of emphasis will be incorporated What projects/experience it will cite What graphics/illustrations will be included Some proposal specialists use a process of storyboarding to accomplish this planning. With storyboards, you build the high-level proposal outline and then complete a storyboard for each item on the outline. The storyboard contains headings for items such as those listed above. Authors complete the storyboards to provide the information that needs to be presented in a section and complete the low-level outline. The storyboard acts as a data collection tool when working with multiple authors.
Instead of storyboards, some proposal specialists use annotated outlines, with the proposal outline, RFP, and other items listed above cross-referenced. Annotated outlines can also be used as a data-collection tool. Carefully formatted, they can be used to create a checklist to use when writing or reviewing a proposal section. Regardless of whether you use storyboards, annotated outlines, or some other methodology, you should document your proposal plan in such as way that you can validate it prior to writing. Government contractors often hold a formal review of the proposal plan, before any text is written.
When the only way you get new business is by responding to RFPs, it’s easier to accept that you must invest in your proposals if you want to win. Most government contractors expect to spend 1-3% of the projected award on any given proposal. For a government contractor, the relationship with the customer is often second to the regulated process in determining who will win. You can have an excellent client relationship and lose because you didn’t dot all the “I’s” and cross all the “T’s” in your proposal. In the private sector the relationship is usually more important than the document, and if the proposal isn’t good enough the customer may send it back for improvement. As a result, private sector firms tend to place more emphasis on the relationship than on the proposal. But if you don’t put enough emphasis on your proposal, you have a weakness in your closing process. And that’s not where you want to be weak.
Even with a highly regulated procurement process, savvy government contractors recognize that most proposals are won or lost before the RFP hits the street. The relationship with the customer does impact the evaluation process. And writing good proposals requires customer awareness well beyond what you learn in the RFP. Activities the occur pre-RFP and post-RFP are both critical to winning the business. This is why some companies (private sector and government contractors alike) try to integrate the sales function and the proposal into a single “capture” process.
Even if you don’t need the amount of formalization that government contracts have developed for their proposal processes, you can still learn from their experience:
Proposals can be won (or lost) before the RFP hits the streets, but the proposal is still a critical part of closing the deal Know what information you need from the customer (whether or not there is a written RFP) to write the proposal and collect it Plan your response before writing it Use a cross-reference matrix to explicitly relate everything in your proposal to the customer’s requirements Conduct formal proposal reviews to provide quality assurance The word “proposal” means different things to different organizations. What one company goes through to produce their proposals may be completely different from how you do yours. But that doesn’t mean that you can’t learn from them.

Most Favored Customer And Price Reductions Clause The most favored customer (MFC) and price reductions clause (PRC) operate jointly - seldom will you see the MFC clause without the PRC, and the PRC has no meaning without the MFC clause. There simply does not exist a legal basis for these clauses to exist. The FAR standard at 15.4 is "fair and reasonable". Their inclusion in an IFB or RFP is clearly not proper. It is currently in the FTS 2001 RFP improperly.
GSA has imposed these clauses in the schedule program for decades without legal basis. But no one has taken GSA to court. So, the bluff wins. The MFC clause is based on the premise that the government deserves similar or better discounts than the best discount you offer to a particular customer category. When you apply for a GSA schedule, you are required to identify the best discounts you have granted the following customer categories: Dealers/retailers; distributors/wholesalers; educational institutions; state, county, city and local governments; OEMs; and others (national accounts, end users.) Based upon the information you provide, the government will identify the customer that you have granted the largest discount to as your most favored customer, such as the OEM category. It is up to you to negotiate with the government in identifying the category that is most similar to the government customer. This will usually be the end user customer category, which ordinarily receives a lesser discount than offered to other customer categories and is most similar to the government in the way it buys. It is important when you are negotiating any contracts that include the MFC/PRC that your most favored customer is identified, for the PRC is contingent upon the discounts offered the MFC.
Once the MFC category is identified, the government will generally negotiate a discount that is equal to, or better than, the discount given the MFC. The PRC states that if you violate the contractually agreed upon pricing/discount relationship by offering a (better) discount to your MFC, you have invoked the PRC. This means from the date that the violation took place, you will owe the government a discount proportionately equal to that given the MFC. Further, should you be audited and the government finds that the data they have relied upon to negotiate a price with you is inaccurate, you will be subject to civil and possibly criminal penalties, such as large fines and jail sentences. How can you avoid the MFC clause or PRC violations? Read the solicitation provisions included in the GSA schedule solicitation document. It specifically provides that:
Sales outside the scope of the contract are not subject to MFC/PRC. This means sales exceeding the contract's maximum order. Direct sales to the federal government are not subject to MFC/PRC. The government is always interested in obtaining the best price possible. You are not required to account for discounts offered to the government, and discounts to the government that differ from the GSA schedule price do not violate the PRC. Extra discounts offered your MFC will not violate the PRC if you offer the government a likewise discount. This can be done on a temporary basis, minimally thirty days, and does not violate the MFC/PRC. Extra discounts offered to customer categories other than your MFC do not violate the PRC. We would like to make the case that GSA does not deserve any special price consideration from vendors in schedule negotiations. The rules clearly require procurement from lowest price vendors or justification of higher prices. GSA should be content to let market forces determine price. If Vendor A gives GSA 3% and Vendor B offers 8% for a comparable product, Vendor B will get the business. If this does not occur, this means that the entire schedule program is not workable and should be abandoned. If GSA and GAO cannot enforce this simple concept then we can only conclude that the higher priced product is worth more.
Further, government money is not better than commercial money. The government is very slow pay and always pays in arrears. In the commercial world, the price is based on the vendors commercial contract terms, often payment in advance, always payment in advance for rentals and numerous other terms that are not present in government contracts. Then we have vast differences in contract performance terms, liquidated damages, termination for convenience, default and inability to commit to multi-year prices. All of these differences serve to illustrate that getting a schedule is not a hot deal for most firms. There is nothing in the regulations or legal background that gives GSA the right to demand a most favored customer price
Further, this GSA policy is inflationary for the commercial, state, and local government market. We have seen many instances in which vendors would have offered other customers a better price except for the price reductions clause. Thus, GSA causes a higher price for other government units and the commercial sector.
Then we have a monumental blind spot in GSA dealing with prices offered distributors, dealers and OEMs. GSA does not grasp or chooses not to grasp that the discount given these firms is simply the cost to do business. GSA often has a 10% overhead and markup on items sold in GSA stores but they quickly forget this in schedule negotiations. They forget about damages, business losses, theft, advertising, hiring, training, and the dozens of other expenses, including insurance, which a business must suffer.
So we have the massive problem of getting GSA to grasp that the government does not deserve a most favored customer price as the price of admission to the game. GAO has ruled in decision B-183942, dated July 12, 1976 at CPD 76-2:31, that the government has no inherent right to any price other than what competition produces is a competitive bid. GSA ignores this legal case.
Now you have a schedule award and immediately fall under the price reductions clause. The clause is ambiguous in meaning and especially in what events trigger the clause. But most importantly, numerous reasons exist why GSA should not get a price reduction just because someone in the commercial world does. For example, consider the following examples and ask yourself if the government deserves, under any reasoning, the commercial price:
My commercial contract calls for 2% ten day PPD. Government rules call for a 20-day PPD. My commercial contract calls for rental payments on the first of the month. My schedule says I can bill at the end of the month. My commercial contract only says that purchase orders must be accompanied by a check for 25% of the purchase price. My schedule says that I can bill after a 30-day acceptance test. I offer a commercial firm a 30% discount on product A because they buy ten of product B. Product A is on schedule and B is not. I continue a 20% discount contract with a customer of five years standing who is 10% of my business, yet GSA wants 25%, guarantees to buy nothing and does not even guarantee any business next year, nor even that I will have a schedule next year. I give a national firm a 20% discount. This firm immediately sends a letter to all offices that we have entered into this relationship and the firm's field offices should give strong consideration to our product in filling their needs. GSA does nothing for me once I have the schedule. I give a national firm a 30% discount and the firm names me as the official company supplier for product A to be given preference over all other suppliers. This is similar to a GSA requirements contract. GSA does nothing re the schedule. I give a firm a 20% rental discount in return for a three-year, no-out contract. GSA wants 20% with a 30-day out and a fiscal year out. Readers, what we essentially have here is a long standing problem where GSA has taken each vendor, individually, into a closed room each year for the last "X" number of years and beaten the living daylights out of each one. They have been able to do this because each vendor thinks the end is near if you have no GSA schedule. Simply not true. When will you reach a point of no return? Several major firms, in recent years, have been unable to reach agreement on a schedule with GSA and have survived nicely without a schedule for a year or two.
All readers have a large stake in this problem. Government agency customers may well not be able to procure many products from schedules if these matters are not resolved. The trade groups have been mostly silent and ignorant. And vendors, most of all, need to pressure GSA directly and also through their respective trade groups.
Good luck!

Protest Case Studies A widely held belief among people doing federal business is that a protest costs far too much and is not good business because the agency will retaliate. I reject both claims as not being factual. Now a protest can cost hundreds of thousands, but you only do this when you are right, think you can win, and millions are at stake. And in many instances the feds have to pay your legal fees if you win. I have been involved in probably more than 1000 protests. Here are a couple. I submitted a bid to Treasury and a two-page protest that took only an hour or so. About a month later, the agency called and told me they had denied my protest on their RFP. I thanked the CO and told him I would now decide if I wanted to pursue the issue in another venue. He said while I was deciding could I stop by at 2pm. I asked why and he said to pick up my contract. I had won the bid.
In another case I read in the CBD about a sole source to AT & T. I operate under the assumption that any sole source to IBM or AT&T is most likely illegal and that, while the government does about 40% of their business sole source, about 80% of this sole source business is certainly illegal.
I wrote a one-page protest to the USDA Competition Advocate that this was most certainly an improper sole source. And I did not even care if they did the sole source. I had no client interested. But if you don't drive your car for three years your skills diminish. Same is true of protests. When was your last protest?
This entire protest took one first class stamp, one page of paper, one envelope, and about 15 minutes to create. Within about 10 days the sole source was canceled.
Vendors only win about 10% of GAO protests. Most of them are not skilled or they get their legal help in Boise or San Diego. Boise is where you get help in hunting elk. San Diego is where you get help to surf or deep-sea fish. There are no dog sled trainers in Tampa, are there?
But here is exhibit A. Remember the $25 billion GSA FTS RFP? It was awarded by Carol Hall, CO, 60% to AT&T and 40% to Sprint.
Then the contract came to an end. Just prior to the end, MCI filed a protest against a proposed GSA tech refresh with AT&T. The court in B-276659.2 ruled the tech refresh was a cardinal change and out of scope and denied GSA the right to pursue the sole source with AT&T. Carol was long gone and some other CO did this.
Now comes the new FTS 2001 RFP. Who wins? Sprint wins 60% and MCI wins 40%. For the first time in American history, AT&T is no longer the dominant voice career in federal.
Don't file any protest as you will only make the Captain mad and he will get you.

Section M - RFPs, IFBs, the Schedule, RFQs and Best Value The average sales person does not spend enough time analyzing Section M when completing a proposal. Not to grasp all of this key section is to do business at your own peril.
The government only has a few ways to buy including RFP, IFB, schedule,and RFQ. By law, the IFB is low bid, and this is why it is so neglected. If the government is buying $2 million of a brand name product, they should be using an IFB at least 90% of the time. Many agencies fail to do so. We have even seen court cases on this issue where the court ordered the agency to cancel the RFP and use an IFB.
But what about RFQ's and schedule buys? They must be awarded to the low bidder, unless the bid contains a best value equation. The FAR requires the CO to state the relationship between price and technical. In a recent court case, even the GAO, with its weak review powers, overturned an award by HCFA in which HCFA made a value award for storage systems after their RFQ said low price.
We recently saw a similar case in a civilian agency where the agency said they would do a schedule buy, had no equivalent to Section M, and did not award to the low-priced supplier who met their needs. This is a sure protest loser if one comes.
But GAO also recently okayed buying Microsoft at a higher price from a schedule holder and rejected a non-schedule, lower-priced bid. CICA in 1984 okayed schedules as a business but required low price awards and required that the program be open to everyone. It is or is it? The job of NFL wide receiver is open to everyone if you run a 4.1 40 and weight 220. Schedules are hardly open to everyone. The two most common conditions are Sun won't let you put their stuff on your GSA and your past discount history was not well managed, preventing you from obtaining a GSA at a profitable price. If you doubt this, just ask Sun, Oracle and Microsoft to be on your schedule. Call me when they all say yes.
But the sales guy, when he gets a bid, has to ask questions such as how long is the life cycle, what training do you want, what is the best value award basis, etc. If they don't, they may starve to death.

Market Segmentation in the Federal marketplace In the commercial marketplace, marketing efforts often center around segmentation strategies. Selling to the “public” lacks focus. You have to divide the “public” into segments that you can reach. In the Federal marketplace, marketing efforts often center around RFP release schedules --- find out who is going to release an RFP that you can bid and then position yourself to win it. A lot of effort goes into finding out who is going to release a suitable RFP.
In the same way that marketing to the “public” lacks focus, market to the “Government” also lacks focus. There are tens of thousands of buyers. You need to segment the potential buyers in order to focus your efforts to identify suitable upcoming RFPs.
One high-level segmentation approach is to divide a marketplace into horizontal and vertical markets. An offering that has broad applicability is considered horizontal. An offering that is suitable only for specific applications is considered vertical. Horizontal offers may have more potential buyers, but locating individuals is harder. A vertical offering restricts the pool of buyers to specific areas that are easier to reach.
Off-the-shelf products tend to be horizontal in nature. For example, everybody buys PCs. Services can go either way, but contractors tend to look at them horizontally --- whatever you need we’ve got people who can do that.
One approach to gaining a vertical perspective is to think in terms of solutions. Get to know customers in a specific area and offer solutions to their needs. Beware --- some companies bastardize this approach by becoming too “solution oriented” and end up offering to solve any type of problem for anyone. The key is to get to know the needs of customers in a specific area.
In the Federal Government, this can be a specific department or agency. For example, you might tailor products/services to help the FBI solve law enforcement problems, and for growth expand the offering to other law enforcement agencies within the Department of Justice.
As you develop your understanding of the customer’s needs, you should also be developing your understanding of their buying habits and purchase cycles. Because you only have to monitor as many buyers are in your vertical segment, it is easier to gain advanced notice of suitable RFP releases. And when an RFP is released you have an understanding of the customer that runs deeper than what it says in the RFP and you are able to offer solutions to their problems instead of a simply response to the RFP. This is how you win. And as you develop a reputation for being able to solve the problems of those in your vertical market segment, you become positioned to consistently win.