5 Tips for CEOs New to the B2G Market

Posted by editor on February 5th, 2009

Know Your Sales Cycle. Government agencies are some of the most reliable clients out there. The rigorous award process provides a lot of transparency, and there’s little danger they’ll skip town and not pay the bill. However, because of the process [m1]involved in government contracting, it can take longer to receive payment for government work – sometimes up to 30 to 45 days after the work is completed. Make sure you factor in this longer payment cycle in your budget planning: can you cover your overhead until the payment comes in?
Build Relationships Now. 80% of government contracts are never put up for bid. If a contract is under a certain dollar threshold, the agency is under no obligation to put out a bid or RFP. Government agencies rely on preferred vendor lists and pre-existing relationships to fill these contract needs. Start building relationships with decision makers at your target agencies – you never want your bid to be the first time they’ve heard of your company. Having a solid relationship with government agencies will also help your company get specified on larger-dollar contracts.
Tackle the Competition. The majority of government contractors lose more bids than they win. Research your target agencies’ purchasing history to find trends in their buying activities (do they prefer local contractors? Small businesses? Have they awarded the last several projects to the same company?) to make sure it’s a project you want to pursue, and research your competitors to position your strengths against their weaknesses. The good news is that government agencies are likely to go with the incumbent on a contract renewal, so once you’ve won a contract, perform well and you’ll drastically increase your chances of winning another project with that agency.
Sweat the Small Stuff. A government request for proposals is a seriously dense piece of work. It’s about on par with your tax documents, only this involves the government paying you money! However, it’s important to read the RFP closely and pay attention to every detail. It’s easy to get lost in all the government-speak, but doing so could mean bidding on a project you’re ineligible for, having your proposal disqualified on a technicality, or – worst of all – bidding low because of incorrect pricing. You don’t want to be awarded a contract you’ll lose money on, or spend a lot of time and money drafting a proposal for a contract you have no chance of winning.
Stay on Top of Bid Notifications. Your proposal team will need as much time as possible to draft a killer proposal. The earlier you can find out about an opportunity, the more time your team will have to research, write and revise the proposal – giving you more of a competitive edge.