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.  However, I have found that some of those tales 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 (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 too much paperwork.

Being in business for over 30 years, I find that it very common that as your business grows and your client base grows to include large corporations and/or state and local governments you learn that everyone one of your customers 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. Specifically I have found that the paperwork people may refer to or be in fear of 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. That said 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 most other tales of woe. Once again similar to other customers 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 spell it out it is incumbent upon you to ask and get that very important business point clarified before you do a moment’s work!  When you do exactly what that government customer tells you to do (invoicing instructions) you get your money easily in approximately 30 days from the time that you invoice.  This is especially if you are using electronic payment processes which are pretty much required now.  In some cases it may be that you have not done your due diligence in the beginning when you signed your contract to clearly understand what your terms and conditions for payment are. You made assumptions that were completely incorrect and have no basis in fact.  Ask about the required format for the invoice to be approved.  For example, when awarded my first contract I confirmed the exact time of when 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 for over 20 years.

The myth here is that the government is slow to pay. I have found that 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 they can do it.  I believe that more people have the ability to be successful in the federal government marketplace than realize.