Your guide to federal contracts

Doing business with the federal government could be the tale of the good, the bad and sometimes the very ugly but some of those tales I have found are built on myths passed along by those will little experiential knowledge. I find that many of those who have never considered working with the federal government, which is the world’s biggest customer, do so based on what I consider to be myths. I’d like to address two of the most common myths that I find out floating around out there.

Myth #1

I don’t do business with the federal government because there’s so much paperwork involved.

After being in business for nearly 31 years I find that as any business grows and as your customers grow in size and location across the nation every customer has its own form of internal bureaucracy. Every customer has a way that they want you to do business with them. The government is no different. In many cases I have found that the paperwork people may refer to is attributed to two particular areas. The first area has to do with any certifications that a business may apply for in order to be recognized as a small business in a particular category. An example of this is the 8(a) certification which is a business development program for a limited ethnic group in part to level the playing field in competition for winning federal contracts.
The second area to which I find people attribute the voluminous amount of “paperwork” is in the area of proposal development. It is true that in most cases an RFP can be a cumbersome document of many pages based on the number of regulations that any company must adhere to if they are to be a successful winner in the competition. The government has an obligation to allow any of its business citizens to play a role in bidding or proposing work they think they can perform for the federal government. Having said that, I find that when pursuing business with major (usually publicly traded) global corporations the same is true. So is there paperwork? Of course but not much more than any other major bureaucracy out there where large amounts of money are being awarded.

Myth #2

I have heard I may not get paid or I hear it takes forever to get paid.

This particular myth is truly one of my favorites. There actually is some truth behind this that helped it to become a myth unlike any other tales of woe. Once again similar to other customer s the government will clearly tell you exactly what you need to do to collect your money. And like any other customer if they don’t, it is incumbent upon you to ask and get that one very important business point clarified before you do a moment’s work! When you do exactly what that customer tells you, you get your money easily in approximately 30 days from the time that you invoice, especially if you are using electronic payment processes. In some cases it may be that you have not done your due diligence in the beginning as you signed your contract to clearly understand what your terms and conditions for payment may be. You make assumptions that are completely incorrect and have no basis in fact. I experienced in the very beginning of my government contracts business days a situation where a particular standard form was used as my invoice. The first invoice I sent off came back to me with a standard letter saying my invoice was incorrect. They didn’t tell me exactly what was incorrect but that the invoice itself was incorrect. So I as a commercial business person took a look at my date of performance, the description of services I had provided, the dollar amount I was charging, and thought everything was right and I resubmitted. Three weeks later I received my same invoice with the same form letter saying that my invoice was incorrect. Once again I reviewed all of the information in every block on the standard form and could not understand what I had done wrong. I desperately tried to call someone in Ohio which proved to be quite difficult to reach since this was before email was used as widely as it is today. I just could not understand what the problem was. My big mistake was I was so focused on landing the work and creating a good relationship with my customer that I forgot another real customer I needed to know … the person writing the contract and the people who were to pay me, the latter being in Ohio and not in my customer’s office. To make a very long story short what I found when I had someone check my invoice we found that in one small block in the upper right-hand corner I had missed one of six zeros that came before the number known as my solicitation number. I finally confirmed this by phone with the payment office. When I added that one ‘0’, I resubmitted my invoice and was promptly paid in 31 days. My lesson learned was to take the time at the beginning of my contract to learn who I send the invoice to. Ask about the required format for the invoice to be approved. I confirmed the exact time I had the ability to invoice for collection and I clarified what the average number of days would be before I would receive payment. From that day on I learned to clarify right up front how I would be paid and very specifically how the money would flow through the performance of the contract. That was a major learning moment that has served me well after 18 years. The myth here is that the government is slow to pay. We find private industry as a whole has always paid slower than the federal government on large contracts.

Too often we are willing to accept mythology for reality in the world of federal contracting. Is it a world where everything needs to be very specific? Yes. Is it a world where regulations rule? Yes. I have always said government contracts are not for everyone. But for those who are willing to pay attention to the details and are interested in the quality of the service and product they sell to a customer I believe that more people have the ability to be successful than realize. And don’t forget the government buys EVERYTHING. That’s the topic for my next blog.

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