"EVMS" Drives True Project Status, By Integrating Project Cost, Schedule And Estimate At Completion

Image:  Wikipedia.org

Recently a question regarding project management  prompted me to recommend a simple application of an Earned Value Management System (EVMS) to deal with a project management problem.

The question and my answer are as follows:

Question:

How do you keep yourself on task and on budget during a start up?

What are some techniques that you use to keep you (and your team?) on task, and on budget, during a business start up?

Answer:

Plan to measure your "Bang for the Buck". Establish tangible tasks in the form of a plan. Set milestones for them in time at a budget value for each milestone tied out to the total budget. The milestones should be things you can look at and say, "That's done".

Status your plan regularly. When milestones are completed, credit the budget value as earned. Tasks may cost more than their budgets to complete. That is cost variance for completed tasks.

If milestones are not completed by their scheduled date do not credit their budget value as earned. Behind schedule tasks are thus contributing to a cumulative budgeted schedule variance in time.

If you are running an unfavorable schedule variance for incomplete tasks and an unfavorable cost variance for completed tasks you are in trouble.

Corrective action, additional resources or a work around plan will be necessary to recover from negative variances. You will investigate the tasks behind schedule and over cost to determine the problem, the cause, the resolution, the corrective action and the likelihood of overrunning your total budget or being late due to events at time now. You will have time to do something about it.

The above technique can be used for starting a company or running a project. This technique is commonly referred to as Earned Value Management. It should not be driven to a level of detail that is unmanageable.

Prudently used this approach gives insight into the dynamics of physical accomplishment driving project status as opposed to plan versus actual cost tracking which tells you only that you are spending money.

Several approaches were recommended in response to the question for keeping a new start-up company on track with regard to staying within budget and time constraints. EVMS is the most effective project management technique to achieve that sort of objective.

Please visit the below Wikipedia article from which the graphic leading this post was downloaded for an excellent explanation of EVMS and its application on projects:

http://en.wikipedia.org/wiki/Earned_value_management

In short, the technique:

1. Ties budget to schedule

2. Establishes measurable means to track project status

3. Accounts not only for the money being spent but also for what is being accomplished with the expenditure.

4. Allows in-process cost and schedule corrective action in time to favorably influence the project outcome.

I have utilized the EVMS technique from the smallest of projects to large-scale systems programs. It is well worth learning and practicing. If you become involved in large enough government projects EVMS will be required under your contract by government and prime contractor customers.

Many companies recognize the benefits of EVMS project management and apply it without being required to do so by contract. It produces excellent results.

Government Acquisition Categories

The federal government generally recognizes 6 principal categories of acquisitions. Below is an extract from the FAR for each. It is possible for a product to go through, or be supported by, all 6 acquisition categories during its life cycle.

FAR 34.005-3 - CONCEPT EXPLORATIONS

Whenever practicable, contracts to be performed during the concept exploration phase are for relatively short periods, at planned dollar levels. These contracts are to refine the proposed concept and to reduce the concept's technical uncertainties. The scope of work for this phase of the program is consistent with the government's planned budget for the phase. Follow-on contracts for such tasks in the exploration phase are awarded as long as the concept approach remains promising, the contractor's progress is acceptable, and it is economically practicable to do so.

FAR 34.005-4 - DEMONSTRATIONS

Whenever practicable, contracts for the demonstration phase provide for contractors to submit, by the end of the phase, priced proposals, totally funded by the government, for full-scale development. The contracting officer provides contractors with operational test conditions, performance criteria, life cycle cost factors, and any other selection criteria necessary for the contractors to prepare their proposals.

FAR 34.005-5 Full - FULL SCALE DEVELOPMENTS

Whenever practicable, the full-scale development contracts provide for the contractors to submit priced proposals for production that are based on the latest quantity, schedule, and logistics requirements and other considerations that will be used in making the production decision.

FAR 34.005-6 - FULL PRODUCTION

Contracts for full production of successfully tested major systems selected from the full-scale development phase may be awarded if the agency head (a) reaffirms the mission need and program objectives and (b) grants approval to proceed with production.

FAR 35.002 - RESEARCH AND DEVLEOPMENT

The primary purpose of contracted R&D programs is to advance scientific and technical knowledge and apply that knowledge to the extent necessary to achieve agency and national goals. Unlike contracts for supplies and services, most R&D contracts are directed toward objectives for which the work or methods cannot be precisely described in advance. It is difficult to judge the probabilities of success or required effort for technical approaches, some of which offer little or no early assurance of full success. The contracting process is used to encourage the best sources from the scientific and industrial community to become involved in the program and must provide an environment in which the work can be pursued with reasonable flexibility and minimum administrative burden.

Contracts are used only when the principal purpose is the acquisition of supplies or services for the direct benefit or use of the federal government. Grants or cooperative agreements are used when the principal purpose of the transaction is to stimulate or support research and development for another public purpose.

FAR 37.1 - SERVICES

"Nonpersonal services contract" means a contract under which the personnel rendering the services are not subject, either by the contract's terms or by the manner of its administration, to the supervision and control usually prevailing in relationships between the Government and its employees.

"Personal Services Contract" means a contract that, by its express terms or as administered, makes the contractor personnel appear, in effect, Government employees.

"Service Contract" means a contract that directly engages the time and effort of a contractor whose primary purpose is to perform an identifiable task rather than to furnish an end item of supply. A service contract may be either a nonpersonal or personal contract. It can also cover services performed by either professional or nonprofessional personnel whether on an individual or organizational basis. Some of the areas in which service contracts are found include the following:

(a) Maintenance, overhaul, repair, servicing, rehabilitation, salvage, modernization, or modification of supplies, systems, or equipment
(b) Routine recurring maintenance of real property
(c) Housekeeping and base services.
(d) Advisory and assistance services
(e) Operation of Government-owned equipment facilities, and systems
(f) Communications services

Free Small Business Federal Government Contracting Books And Supplements

You may download the book, Small Business Federal Government Contracting and its supplement, as well as the other titles listed above from the  “Box” in the right margin of this site.

Use the links below to access more recent articles here since the publication of the book and the supplement.

SMALL BUSINESS COMPANY TRAINING

MANAGING INDUSTRY TEAMING RELATIONSHIPS

UTILIZING THE FREEDOM OF INFORMATION ACT (FOIA) 

UNSOLICITED GOVERNMENT CONTRACT PROPOSALS

VITAL TIPS FOR PROJECT MANAGEMENT 

FIXED PRICE VS. COST PLUS IN CONTRACTING 

MAKING AN ASUTE BID/NO BID DECISION 

THE TRUTH IN NEGOTIATIONS ACT (TINA) 

You may also benefit from the free "Reference Materials" in the "Box". Contract agreements, incorporation instructions for all the US states, guidance on marketing and business planning are all included. 

Other books by Ken available as free downloads in the "Box" include:

"A Veteran's Photo/Poetry Journal of Recovery
From Post Traumatic Stress Disorder " 

"Odyssey of Armaments" My Journey Through the Defense Industrial Complex"

Need For Agility Drives Large And Small Business New Technology Partnerships

Image:  TetraTech

" WASHINGTON TECHNOLOGY" By Scott Lee

"Smaller players and the larger contractors work together in a new model of agile programs. With successful mentorship and partnership programs, larger contractors gain access to contracts for which they would otherwise be ineligible."

__________________________________________________________________________

"Conversely, smaller contractors that lack the resources for federal procurements can break into this competitive marketplace by teaming with larger providers.

At the same time, new acquisition reform efforts aimed at streamlining and improving technology procurements are helping to ensure that agency CIOs are more involved in the process, and are responsible for the success or failure of all IT projects at their agency.

For the agency, the combination of these developments creates greater demand for technology collaboration and agile solution development.  With increased CIO involvement and improved agency coordination, programs should benefit by sharing common capabilities through inter-program collaboration.  At the same time, with a shift towards smaller, agile application solutions, as opposed to traditional grand-scale programs, agencies can lower the risk of cost overruns and schedule slippage.

For the large contractors supporting the agency, increased collaboration and more agile development increases the need to team with smaller innovative tech firms in emerging IT areas and then share those capabilities across programs.

For example, with the increasing need for sharing geospatial data across not only the Defense Department but also civilian agencies, contractors can help CIOs leverage their existing geographic software and imagery with available commercial-off-the-shelf solutions from smaller software companies, as opposed to developing custom applications.

When customization is required for success, the same small software companies can help large contractors fill highly specialized capability gaps without the need to directly acquire the innovation. Ultimately, with the right teaming arrangement, program outcomes are optimized which benefits all industry partners.

However, there are always challenges when it comes to developing the right teaming relationship. There is often a lack of transparency and mistrust in the majority of teaming relationships.

Many of these challenges come down to a lack of communication, and a misunderstanding of what each side brings to the table. For smaller specialized companies, it is easier to show their value propositions to both the government customer and the larger primes.

In today’s rapidly evolving government IT arena, these unique value propositions can be anything from spatial data management to mobility to the Internet of Things (IoT) to specialized cybersecurity offerings. These are the new innovation areas that are moving away from being “talked about” to actually being implemented.

In particular, spatial data collection and visualization is fundamental to decision support for all federal agencies.  There will never be a shortage in the need for insightful, actionable data for helping government become more responsive and effective. Government will always need on-demand decision support data about a wide-range of subjects – including disaster recovery, income levels, air quality, disease patterns, environmental incidents or population trends.

For larger contractors, it may be difficult to build out or acquire these types of capabilities in a rapid fashion.  Furthermore, with acquisition reform efforts like FITARA giving agency CIOs more input in the procurement process, it’s even more important for larger contractors to demonstrate greater value with the right teaming arrangements.

Ultimately, we all want successful business outcomes produced by the unmitigated success of our customer agencies. This can be achieved through nimble teaming relationships where the smaller players and the larger contractors work together in a new model of agile programs."

Need for agility drives need for new technology partnerships

ABOUT THE AUTHOR:

Scott Lee is VP Defense & Intelligence TerraGo

A native of the Birmingham, AL area, Scott Lee joined the US Navy in 1993 as an all-source and imagery analyst serving aboard the USS Mount Whitney (LCC-20) in Norfolk, VA and USSTRATCOM in Omaha, NE. Following service and education in Omaha, he joined the ERDAS IMAGINE team in Atlanta, GA where he worked in several capacities to include training, project management and business development.

A Tool To Assess The Forthcoming Major Changes To The Federal Acquisition Regulation (FAR)

 

Image: Defense Acquisition University (DAU) Contracting Cone 

(PLEASE CLICK IMAGE TO ENLARGE)

GSA is working with the FAR Council and other stakeholders on major changes to the Federal Acquisition Regulation. "WASHINGTON TECHNOLOGY" - " FAR overhaul: The challenges in tackling federal procurement’s 5,000-page beast"

Examine the Defense Acquisition University (DAU) "Contracting Cone" as a utility in understanding changes by the Federal Government to the FAR and associated acquisition processes.

_________________________________________________________________

"DAU"

"The Contracting Cone outlines the full spectrum of available FAR and Non-FAR contract strategies. The supporting materials provide details about each contracting strategy, to enable collaborative discussions to select the right strategy based on environment, constraints, and desired outcomes. The goal of the interactive graphic below is to provide visibility into new or lesser known strategies and ensure the full range of contract strategies are considered.

Click on the strategies in the tables below to explore the details."

FAR Based
Fed Supply Schedules (FAR 8.4)	Task Order/Delivery OrderBlanket Purchase Agreement
Commercial Items (FAR 12)
Simplified (FAR 13)	Micro PurchasePurchase OrderBlanket Purchase Agreement
Negotiated Contracts (FAR 15)
IDIQ (FAR 16.5)	Single AwardMultiple Award
Letter Contract (FAR 16.603)
Agreements (FAR 16.7)	Basic AgreementBasic Ordering Agreement
Small Business (FAR 19)	Set-AsideDirect 8a
Broad Agency Announcement (FAR 35.016)
SBIR/STTR Programs (15 USC 638)
Commercial Solutions Opening (DFARS 212.2)

Non-FAR
Other Transactions	Research (10 USC 4021)Prototype (10 USC 4022)
Procurement for Experiments (10 USC 4023)
R&D Agreements	CRADA (15 USC 3710a)PIA (15 USC 3715)TIA (32 CFR Part 37)

Scenarios: What Are You Contracting For?

Compare 2-3 Contracting Strategies

Contract Strategy/Contract Type Matrix

Managing Subcontractors And Independents As A Small Business Prime Contractor

                       

              

Industry teaming is a fact of life in small business federal government contracting. Your team for a given contract pursuit may consist of several types of industry partners external to your organization. 

If you are the prime contractor on a multiple company program by virtue of a teaming agreement, the challenge may involve issuing purchase orders to independent contractors as individuals and negotiating fully executed subcontracts with firms subcontracting to you.

The techniques in managing each of these partner types are distinct. The contractual and regulatory factors are introduced in the following link:

What is a Small Business Federal Government Contractor

This article will convey guidance for a small business federal government prime contractor, in managing the external business relationships with other companies as subcontractors and independents as individuals.

EARLY AND CAREFUL PARTNER SELECTION/TEAM MANAGEMENT

Finding industry teaming partners should occur synonymous with finding an opportunity. We have previously discussed marketing federal business opportunities:

Multiple Front Marketing

SAM Contract Opportunities

Small Business Teaming

Assuming you have located an industry partner or perhaps a mix of subcontractors and/or independent individuals you wish to engage, make sure they have the capabilities to perform the parts of the statement of work on the program you are targeting. Remember that the quality of your proposal, your probability of a win, and ultimately your past performance rating on the contract, will reflect your supplier management. The government will hold you accountable for their performance. In some cases agencies will reserve the right to approve your key personnel and subcontractors before issuing your prime contract.

Two general guidelines should be observed:

1. Do not subcontract in excess of 40% of the program to another company in terms of hours, dollars and % of total work scope. The FAR regulations specify 49% as a ceiling but it is best to reserve 60% of the effort for your company employees and independent contractors under your control to avoid appearances of a front.

2. Do not exceed 50% of the internal labor hours for your company share of the program with contractors as individuals. Government source selection boards need some assurance that the capability to lead and perform major parts of the program resides in the permanent party of the small business prime contractor.

If you exceed the 50% rule for independents, include contingent hire agreements demonstrating the point in time where they will become full time employees or will be replaced by full time employees. A contingent hire agreement may be downloaded from the Box Net References Cube in the right margin of this site.

Sign subcontractors and independents to proprietary data agreements.  Develop thorough teaming agreements with subcontractors, including an explicit statement of work attachment to each agreement quantifying, the work scope guidelines in paragraph 1, above. A teaming agreement is available for download in the Box Net references cube at this site.

The independent should also understand the specific work and hours he or she will be expected to perform on the job and such personnel should be retained on a contractor retention agreement which is also available for download in the Box Net References cube at this site.

Teaming agreements, contingent hire agreements, contractor retention agreements and subcontractor proposals must be either included in your proposal submission to the government or made available for government fact finding.

CONTRACT DOCUMENTATION AND TRANSITION FROM PROPOSAL TO CONTRACT

During the proposal stage of the business relationship with your industry partners you will be issuing them requests for proposals (RFP’s) for their portion of the effort.

For independent contractors this may be as simple as asking them to sign contingent hire agreements or contractor retention agreements.


But you must include in the RFP’s to the companies which you propose as subcontractors the terms and conditions of your agency prime contract RFP and other specific guidance to make the proposal and subsequent contracting process work smoothly. This should include administrative guidelines and agreed upon cost targets and technical guidance.

Specify a due date for their proposals in response to your RFP in time to roll their data into your cost volume and provide guidance on the handling of fully loaded rate backup to which you do not have access to forward to the government auditors. This usually includes sealed packages provided by your subcontractors that you will not open, since they contain overhead and G&A rate information which is highly proprietary to the subcontractor.

Keep in mind that you are in a constant negotiation with these partners until you award them subcontracts to replace the teaming agreements when your team wins the program. Please see the following article for detail guidance on that point:

Contract Negotiation

Naturally the technical and management volumes of the proposal will be completed in consonance and in parallel with the subcontractor RFP cost proposal responses.

At contract award, be prepared to negotiate and execute formal subcontracts to the companies with whom you are teamed and to issue purchase orders to your independents to commence work. At that point you have achieved the contract baseline and you will commence work.
 Insure that your subcontracts and purchase orders contain limitation of funds and funding exposure protection for all parties in accordance with the following article:

Limitation of Funds and Funding Exposure

BASELINE MANAGEMENT

Please read the following article carefully on baseline management and bear in mind that work scope change sensitivity must be managed carefully and formally documented between you and your industry partners by change orders to formal subcontracts and purchase orders:

Contract Baseline Management

SUMMARY

This article has provided an overview of subcontractor and independent contractor management from the early marketing stages of a contract pursuit through proposal preparation and submission then contract award and baseline management.

Please read the reference links in the text above carefully and check the table of contents at this site for other information relevant to this topic.

Managing Risk In Small Business Federal Government Contracting Business System Development

INTRODUCTION

Most small enterprises must undertake some form of business process augmentation when entering federal government contracting.

The natural inclination for small business is to immediately jump to buying computer software tools or services in an effort to expedite the business system growth process. That propensity is often enhanced by suppliers who maintain their product or service is “DCAA Compliant”, has been “Validated by the Government as an Earned Value Management System (EVMS)” and other similar claims.

This article will address cautions and tips regarding an immediate jump to software or services as a means of growing a government contract business system. It will recommend some rules of thumb to insure wise business system development decisions, specific to your company, for managing the associated risks.   

UNDERSTANDING THE REQUIREMENTS

The US Government learned decades ago that it cannot impose specific business systems on contractors.  One of the last great attempts to do so was the Program Evaluation and Review Technique (PERT).  It was abandoned in the late 1950’s and early 1960’s and replaced by a set of industry criteria now known as Earned Value Management Systems (EVMS). 

Similarly, the Federal Government Cost Accounting Standards Board (CASB) determined that job cost accounting systems could not be imposed on contractors. Over the years they have developed and maintained a set of Cost Accounting Standards (CAS) which governs requirements for accounting on government contracts. 

The GSA and similar agencies maintain policies on travel, human resources and wage/rate determinations that are not specific systems, but minimum standards as well.  A small business entering federal government contracting should research the above and similar requirements in such areas as quality assurance, inspection and acceptance and export management.

PROCESS COMES FIRST – MAXIMIZE WHAT YOU HAVE

Given a thorough understanding of the requirements for a government contract business system that fills the need for your specific product or service delivery, the next step is to examine existing processes to determine if they can meet the need or be minimally supplemented to do so.

Finding a need for major process changes or enhancements in the existing business system is the beginning of a requirements analysis to determine the labor, process change, planning, costs and eventual selection of new automated tools that fit the company and that need.

Many start-ups and small enterprises find they can crutch their existing job cost accounting system for service contracts with spread sheets instead of buying an expensive, data base oriented, software package or services initially.  As the company grows into government contracting and the number of transactions and associated revenue warrants the expense,  the firm can then evaluate more expensive packaged software tools or services and ease into them with a plan to minimize disruption.

A government contract award drives many things in government business, but small firms cannot wait until that event to position at least the minimal processes necessary to perform, price new business, function lawfully in the human resources area and submit supportable detail in billings. 

Please see the following articles for guidance on minimal business system requirements for small business federal government contacting.

What Is A Small Business Federal Government Contractor?

Pricing Small Business Federal Government Contracts

Small Business Job Cost Accounting Basics

Small Business Federal Government Contracting Business System Development


RULES OF THUMB FOR SELECTING AUTOMATED TOOLS

From strategic planning to marketing, from forward pricing to job cost accounting, from subcontracting and vendor/contractor management to human resources policies, the small firm finds itself undergoing a business system design project upon entering the government contracting venue.

Understand the requirements first, review existing processes and tools next, develop a thorough requirements statement of what must be done in the way of enhancements and then consider automating.  While performing your analysis keep the following 5 rules of thumb in mind:

1. An electronic computer software package or service is not a system. One cannot acquire a system by acquiring them. 

2. One acquires a system by conducting systems analysis, achieving a design and processes by working with the people who will run the system. This is hard work and time consuming. Processes are improved and made more efficient by modifying user behavior not by automating it.

3. Once system and analysis and system design are complete one can prudently choose tools to assist in running the system. The adequacy of a computer tool or service is driven by the requirements of the most efficient system design.

4. The biggest mistake implementation teams make is to believe they are buying a system when they buy a software tool or service or let the tools drive the systems analysis process. That is like asking a mechanic to drive a wrench from New York to St. Louis. It has resulted in millions of dollars wasted and plummeting efficiency in many organizations, large and small.

5. It is necessary to design a system and processes unique to the company to meet user requirements before going shopping for computer tools or services.  If you do not you will be pigeon-holing your company into becoming a slave to the company that owns the software source code or service. If you want anything changed it costs a big buck.

Should You Consider Small Business Federal Government Contracting?

There has been a dramatic increase recently in counseling requests from small businesses inquiring about entering federal government contracting. This article will address some basic things for you to consider in testing that prospect.

YOUR BUSINESS PLAN

If you don't have a business plan in these changing economic times you need one and you should keep it a living document. It is the key vehicle to determine your path forward and convince people that can help you of your firm's potential. Loan officers and investors are interested in your business plan as a function of evaluating the thoroughness of your future vision and validating your funding forecast needs.

Please go to the SBA web site that guides you through the business planning process. I suggest you follow the site presentation and note the factors to consider. The link to the SCORE site business planning presentation is:

Business Planning Guide

The following site contains samples of business plans:

Sample Business Plans


Ask yourself some strategic questions, such as what competition you envision, what your marketing plan will be, etc. Addressing some of these questions may take some research and that is all part of the process of putting in place your plan. It is your road map for the future.

FEDERAL GOVERNMENT CONTRACTING

Your business plan should be a repository for research on the federal government marketplace and how you fit into it. There are many agencies and government prime contractors to whom you may be able to sell your products or services.

Like any other customer, the government expects you to finance your business, meet your payroll, pay your expenses and submit a bill for products and services delivered or rendered. The federal payment cycle is often 60 to 90 days, depending on whether or not you are a subcontractor to a prime corporation.

In federal government contracting you must also comply with the Federal Acquisition Regulation (FAR) and associated Cost Accounting Standards (CAS). Although these requirements are not "Rocket Science", they are different from commercial rules and generally accepted accounting practices (GAP). They have evolved over the years as the federal government has grown in the volume of goods and services it buys. Very few universities make FAR and CAS part of their curriculum and CPA's do not encounter them on a certification exam. Several articles at this site address the practical implications of FAR and CAS requirements for a small business.

The prudent, small businessperson reviews the potential impact of FAR and CAS on his or her business systems and processes before undertaking a government contract, particularly a cost plus or a time and materials contract. In many cases job cost accounting and long range budget planning are required to support pricing, overhead and general and administrative rates. Government contracts can run several months or even years.

Federal agencies form large-scale projects and use companies to service their needs by contracting specialized skills, sometimes bringing the contractors on site by labor category under time and material, cost plus or fixed rate contracts or by purchasing services or products at company facilities and remote sites.

In other cases, pre-established pricing and terms and conditions are negotiated with several suppliers in advance under omnibus contracts and separate delivery orders are issued competitively based on changing requirements. The General Services Administration (GSA) negotiates pricing and terms on multi-year schedules from which both federal and state agencies are permitted to buy.

REGISTRATION

One of the first steps that must be completed is registering your company to bid and become eligible for award of government contracts. Please visit the link below for the System for Award Management (SAM) registration and notice the tips to make sure your file is as complete as possible.

Government Contracting Registration

Also note the North American Industrial Classification System (NAICS) Codes. Please make sure your SAM registration has the maximum number of codes for which you qualify, since the whole federal procurement system rides on those codes.

Self-Certification as a Small Business, a Small/Disadvantaged Business, a HUB Zone-located enterprise, Woman-owned or Veteran-Owned Business is also part of the registration process. Also insure the narrative description of your services is complete.

MARKETING

You should develop a capability statement (CAPE) for government contracts that is short and hard-hitting. It should be 1 page and should highlight the salient points of your products and offerings, your personnel and your qualifications. It should also include the specific information a contracting officer needs to place an order, such as your D&B Number, your government registration numbers, your North American Industrial Classification System (NAICS) codes and the like. These items are selected or provided by you or determined by the system when you register your company for government contracting.

The purpose of the capability statement is to respond to government postings requesting industry interest in forthcoming procurement. They are normally posted at the state and local sites referenced above and at SAM Contract Opportunities, the federal government gateway to contracting:

What Small Business Should Know About SAM Contract Opportunities

A CAPE is useful in acquainting teaming partners with your expertise and government buyers with your small business designations and qualifications. It should be developed in PDF, JPG or similar formats that that can be emailed easily and readily opened.

The following link shows a typical capability statement by a small business government contractor: He may not be in exactly the same business as you are but you can get the idea of what a CAPE should look like and perhaps frame your own document by examining his:

Your CapabilityStatement

UNDERSTANDING THE PROCESS

To propose and win federal government contracts you must become familiar with federal contract marketing, proposal preparation, negotiations and terms and conditions. It is a huge market, but a competitive one. Part of developing the final version of your CAPE will be to examine the market and pinpoint what is out there in the way of typical government bid solicitations that fit your line of work and then frame your document presentation.

The following additional reading at this site will provide background for your research:

Government Contracting Customer Relations

Marketing A Small Business in the Government Environment

Government Contract Negotiation

Establishing Federal Government Compliant Small Business Systems

The Government Contracting Past Performance Challenge

PRIME CONTRACTORS

Regarding larger government contracting corporations to whom you could subcontract - cover the waterfront. Find out what they are bidding and aggressively market a piece of the action as a small business. Determine the locations for the largest government contractors nearest you and register at their supplier business sites. Everything they buy for their facilities, their personnel and their operations counts toward the small business goals required contractually of them by their enormous government contracts.

Research their web sites and locate their small business liaison officers. Make appointments and visit them. While visiting, seek the names and titles of managers internal to their companies who manage prime contracts involving expertise your business can supply. Go after those managers.

SUMMARY

Please check the table of contents on the right margin of this site for other topics that may be useful to you and consider downloading the free book from the BOX in the right margin as well.  Small business federal government contracting is different from the commercial marketplace in terms of business system requirements, marketing, teaming relationships, pricing and the duration of associated contracts. The topics in this discussion and further reading at this site may assist you in your decision whether or not to include the federal market in your business plan.

Your Entry Points Into Small Business Federal Government Contracting

The Federal Government has a continuing need for products and services of every type to support ongoing operations and continued progress in the technical and IT fields.

Small business has lower overhead and G and A rates. The smaller enterprise has an opportunity to perform vital functions at lower cost burdens than the larger corporations.

This article will discuss product and service venues you may wish to consider and how to conduct market research to assess your potential entry point into small business federal government contracting.  

POINTS OF ENTRY

The best place to start in determining a government contracting entrance point is with successful commercial performance of services or product development. Very few, if any, commercial firms make the transition without that bridge.

From maintaining buildings to keeping the lights on, from grounds maintenance to flight maintenance, look for niches that can be pursued based on successful past performance, transitioning via industry teaming via subcontracts, partner roles with larger companies or in small business set aside orders for minor items and simpler services provided directly to the government.

The service venue is the most common entry point and services are at times the vehicles to achieve product development tailored to agency needs. Please see the following synopsis of  concepts in this area and associated links for more details on each:

Multiple Front Marketing

The prudent small business will target agencies and teaming partners that best fit its products and services, positioning itself to acquire developing information on requirements and displaying capabilities by conveying early solutions to customer decision makers. This article will suggest techniques, approaches and tools to conduct a multi-front, targeted, requirements-driven, marketing campaign for small business federal government contracting.

Multiple-Front Marketing

Small Business Set aside Designations 

There are 7 major, small business set-aside designations in federal government contracting. Below is a listing of these designations, divided into two groups, Self-Certifying at the Central Contractor Registration (CCR) and those where government certification is required.

Set-Aside Designations

Techniques for Product Development 

This article will suggest approaches in developing a product to the point where it can be marketed in the small business federal government contracting venue. Individuals usually succeed at such an endeavor by forming a company, separating it from their personal assets and then developing the company and its product(s); even if it is only a one-person operation at the start. 

Techniques for Products and Services Development

Teaming

While developing a government marketing plan, teaming with other companies is a productive venue for the small business. This article will convey general guidance pertinent to teaming and explore the types of teaming used successfully by small business federal government contractors.

Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. There should be technical, management and market segment similarities between you and any company with whom you are considering teaming. Your prospective team member ideally will not be a direct competitor; rather a business in a related field with whom you share a mutual need for each other's contributions in pursuing large-scale projects.

Small Business Teaming in Federal Government Contracting

SUMMARY:

Small business federal government contracting is not rocket science - to succeed you must take what you do well in the commercial market place or what your experience leads you to believe you can plan successfully as a commercial enterprise and then apply it in a slightly different manner from a business perspective to accommodate federal government contracting requirements. Very few companies enter federal government contracting without some commercial experience and success. Very few start-ups entertain contracting exclusively to the federal government without commercial work to sustain operations while the more lengthy government procurement process is being pursued.

Federal government contracting is controlled by the Federal Acquisition Regulation (FAR). Bid and proposal types are driven by the nature of the supply or service being procured. No one reads the FAR cover to cover - It is a source book for when you need it. The FAR and associated regulations are taught in only a few colleges, such as the Defense Systems Acquisition University at Ft. Belvoir and the George Washington School of Government Contracting. Very few CPA's are familiar with the US Government FAR Cost Accounting Standards (CAS) and I am not aware of any questions regarding CAS on current CPA exams. In general one must grow to understand these requirements and that usually happens by doing business under them. 

A Framework For Federal Government Service Contracting Small Business Systems