Unsolicited Government Contract Proposals - A Multiple Stage Challenge

INTRODUCTION

Most enterprises in government contracting encounter the possibility of submitting an unsolicited proposal.  The perceived opportunity arises as a result of observing a requirement that the company could uniquely fulfill, but for which the government has yet to issue a formal solicitation.

These opportunities are normally  large enough so they can't be sold off a GSA schedule or an existing contract delivery order, and do not fall under FAR Part 12, "Commercial Contracting”  

CHALLENGES AND STRATEGY

Since your product or service is not on the funding docket with the agency it does not have a funding I.D. Your job is to get the technical and project personnel enthused enough about it to carve out a niche in their program area and support a funding request for it. They do so by  to obtaining a solicitation I.D; money and authorization to buy from you.

The key to achieving the above is a good presentation revolving around your capability statement but supplemented by a pitch that should emphasize specifically how you understand the agency mission and that your offerings could further it.

Your objective should be to submit a hard hitting summary with a proposal in letter form, protected with the standard proprietary markings, through the contracting officer with whom you have already had discussions to the technical lead in the agency and request a meeting to make the full pitch. 

WORK YOUR PROPOSAL IN STAGES

The following link is the Federal Acquisition Regulation (FAR) guidance on unsolicited proposals:

FAR Guidance - Unsolicited Proposals

Be advised that you need to assert your rights in technical data and software on anything you give them that is product oriented because you have made an investment in it. When they start putting money into its further development you find them pressuring you for a deal on licensing and free use of it in exchange for funding and orders for services. That is the normal course of events and it can be managed.

Another approach is to carefully locate a platform provider that could use your product or services and team with them on a larger scale, bundled program that may be going to formal solicitation.

In either of the above instances, carefully protect your idea using the tips in the below article:

Protecting Intellectual Property

You will note that the FAR guidance specifies that cost and pricing data must be submitted so the proposal may be evaluated.  Naturally you must provide that ultimately, but it is recommended you do not do so with your initial proposal submission.  Simply state you will be pleased discuss with the agency the scope in terms of types and quantities of product and services, after which you will price the result of their input for planning purposes, pending a formal solicitation with funding commitment.

If the agency or a prime gets enthused, they will ask for a Rough Order of Magnitude (ROM) estimate for planning and funding purposes on what your product or services may cost. Be careful to make it conservative because those things get cast in concrete and caveat any ROM with a written statement that your ROM is not a formal commitment to a contract and that you will be pleased to commit with a formal proposal from the government through a duly authorized contracting officer under a funded solicitation.

I have had clients that have even been requested by agencies to write a statement of work for such a solicitation

The government fiscal year is a key driver in terms of available funding and getting it earmarked. Keep in mind funding for a program using your idea or a platform using it must fall within a funding cycle that begins 1 October, picks up heavily in July and August and must conclude in September.

CONCLUSION

Success in unsolicited proposals is a process:

1.   An initial unsolicited proposal submission after focused marketing is the gateway

2.   A strong presentation to the customer in person is key.

3.   Rough order of magnitude (ROM) pricing permits planning by the customer

4.   A funded solicitation is a green light for a firm contract proposal.

5    A Formal proposal submission under a funded solicitation, committing to negotiable price, schedule and delivery terms wins the contract. 

In addition to the articles linked above, please review the following 2 articles for further guidance:

Pricing Small Business Federal Government Contract Proposals

Contract Baseline Managment

Free Small Business Federal Government Contracting Books And Supplements

The table of contents below reflects available, free small business federal government contracting materials at this site.  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.  Blue topics below are the basic small business book and red topics are contained in the Supplement. "Box" has a preview feature. 

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

(Please click on images to enlarge)

RECENT MATERIAL LINKS (Not included in Above)


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"

Fixed Price Versus Cost Plus in Federal Government Contracting

An interesting conversation with an astute, anonymous interviewer on Quora, replicated here for those who may be confused at times with regard to some of the nuances between fixed price and cost plus federal government contracting. 

Anonymous:

Why are cost-plus-fee government contracts less profitable for defense companies than fixed cost contracts?
 

KEN

They are extremely low risk because the contractor is guaranteed reimbursement of any and all costs up to the funded ceiling on the contract.

Therefore under the guidelines for negotiation of profit based on risk, the profit range is always settled at a lower range than other types of contracts with higher risk factors. 

Contract Types

Weighted Guidelines

Anonymous:

Thank you Ken. Is the government moving more towards cost-plus contracts and away from fixed cost contracts?

KEN

 

It depends on the type of effort involved.  Cost plus is generally in very advanced development arena, where the state of the art is being pressed, the requirements are nebulous and the design baseline is tough.

Higher profit production programs where the product or service is mature, predictable and repetitive are usually the recipients of firm fixed price contracts at higher profits.

It is common for the huge billions for services in the war zone for instance to be cost plus due to the unknown nature of warfare.  A similar program stateside at an air force base would lock them into fixed rates for several years but at a higher profit. 

Cost type contracts are generally pursued for cash flow, "Keep the lights on and bill every month" reasons, while higher profit programs are being pursued at the same time in the company

Anonymous:

What about small UAVs / drones? Are those now mostly cost plus contracts?

KEN

 

During development the more complex ones are indeed.  Size in the services and the intelligence community does not necessarily equate to simplicity with micro technology, Satcom and sensors involved.

When they hit production on a repetitive basis they move to more fixed price oriented and incentive oriented higher profit contract types, which of course is the real goal of the companies involved.

Anonymous:

I'm confused, I thought cost plus was for more established technology product and fixed price was for more complex technology product (because it allowed for higher returns)?

KEN

 

It is just the opposite.

Companies will not undertake advanced technology like the F-35 without a cost plus contract because of the risk in pressing the state of the art and meeting an enormously difficult specification.  A prototype is a one of a kind item. 

A production program has high volume potential and yields less risk at a higher profit rate overall at fixed prices.

Pentagon history is replete with incidents where companies went broke on new product development on a fixed price basis. At one point the FAR disallowed fixed price product development because of that issue.

The Lockheed Skunk works went broke years ago and had to be bailed out.  The Pentagon simply plussed up their cost plus contracts and the Black Bird was the result.

The F-35 cost plus contract was finally capped by the Air Force recently and a portion of the risk shifted to Lockheed due abuse of the cost plus contracting by Lockheed Martin.

F-35 Program Overruns

Companies seek a production program follow-on at a high volume and fixed prices with higher profit with lower risk to ultimately make the real bucks,  Under such an arrangement they also own the tooling.  Uncle Sam owns the tooling on a cost plus contract.

Anonymous:

 

I'm still confused.  A company I know had high gross margins because they had more fixed price business in the last two years. For this year, they will have more cost plus and are guiding to lower margins. I thought they and more cost plus this year because they are doing more retrofitting as opposed to the original technology? I am ultimately trying to understand if this is a permanent shift in their Department of Defense business... but any clarification would help!

KEN

 

It is not surprising that gross margins go down when the cost plus base increases.  I have never seen it any other way in my 40 years in the aerospace industry.  Cost plus is low risk and low profit. 

In fact, on certain cost plus contracts there has been a regulated maximum ceiling on profit.

At the bottom line there is no shift in what you are observing.  It is simply the mix of business in the company driving a lower profit rate due to the low risk, hence lower profit, nature of the cost plus environment. 

If the mix were to change to a higher base of fixed price contracts (and higher risk) the opposite trend would occur.

Anonymous:

 

Is there a reason why for the last three years they had more fixed contracts but now over a sudden the mix shifts to cost plus? Does that make sense?   So to understand - this can change every year? Is there any way to predict it based on the types of products they have going forward? Is it because they are retrofitting that its cost plus and not fixed?

KEN

 

Cost plus = high tech, high risk, difficult to meet the spec, full of unknowns and a specification that is moving around all the time until the product is base lined.

Fixed Price = mature product, prototyped and tested, probably through low rate initial production and now going high quantity for fielding.  Lower risk, company willing to commit to FFP; government comfortable the company will not go broke in doing so at a fixed price.

Rule of thumb - look at your product or service complexity and technical challenge  mix, not a government trend.

Check the above mix in the company, the mix in the market, the mix in the competition, the mix in the environment the product or service will  encounter.   Then assume cost plus for high risk, pressing the state of the art procurements and fixed price for lower risk mature products or experienced services.

Anonymous:

 

Can a program start off as fixed price and then become cost plus? Or is it the opposite?

  

KEN

 

The opposite. A program generally moves from cost plus to fixed price as it matures.

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 and many different contact types, depending on the nature of the work, the risk and the product.

 
Acquisition Categories

Contract Types

A Thank You and 4 Gifts from Ken Larson at "Smalltofeds"

        (Please click above image to enlarge)

Approaching two decades in volunteer small business consulting, I appreciate the many individuals who have contacted me for advice. You have come from several venues – through the Micro Mentor and SCORE Foundations, LinkedIn and other social media sites.  It has been a pleasure serving small business. 

My work with you has kept me active in retirement, in touch with my profession and engaged in a continuous learning mode.

Please feel free to download any of the 4 free books pictured here, as well as other useful information at the BOX in the right margin of https://www.smalltofeds.com . You may also download the books free of charge from: https://smalltofeds.academia.edu/KenLarson

Although originally written some time ago, the small business contracting books contain live links in the Adobe text to updates for any given topic at the “Small To Feds” Blog. The books have been written at the request of my clients to cover topics in the order small business generally encounters them in government contracting.

My best wishes for success to you in your small business enterprises.

 Ken Larson 

 

Marketing A Small Business In The Federal Government Contracting Environment

INTRODUCTION

You have positioned your existing or start-up company for doing business with the federal government. You have registered your enterprise at the System for Award Management to include determination of your North American Industrial Classification (NAICS) Codes, applied for Small Business Set Aside Designations , if applicable, researched your HUB Zone status HUB Zone Information and developed a Capability Statement for marketing purposes.

You are embarking on the utilization of SAMContract Opportunities, the gateway for federal government agencies advertising prospective contracts on the Web. 

Now is the time to think through your marketing strategy and the various venues for contracting with the federal government. This article will discuss these venues and the opportunities they offer your small business.

WHAT TYPE OF SMALL BUSINESS ARE YOU?

A. Commercial Contracting Under FAR Part 12

Are you planning to market an existing commercial product which has been on the market, such as software, hardware, a commodity, a report, a conference, a survey or a study, sell it to meet a government specification or statement of work and bill for the end product when delivered? 

If the answer to this question is "Yes", you may be able to do business under Federal Acquisition Regulation (FAR) Part 12, "Commercial Contracting", which is a simplified and fast form of selling to the federal government. 

The vast majority of purchases by the federal government in this category are Firm Fixed Price (FFP) with a product warranty of some type. You may be able to sell under FAR Part 12 if your product meets the definition of commercial items specified by the government.

B. Non-Commercial Contracting

Are you planning to market your services at an hourly rate, sell them by labor categories with professional job descriptions to perform the government statement of work and bill by the hour for labor and at cost for material and travel? 

Or is your product or service a development effort or not readily available to customers in the commercial marketplace. If you fall into this category for either reason it is unlikely you will be contracting under FAR Part 12 and you will be pursuing long term government contracts. 

If the above apply, much of the remainder of the Federal Acquisition Regulation (FAR) will apply to you, together with the various contract types other than FFP which are used for efforts where the contractor and the government may share the business risk in development, implementation or production of a new product, system or service.

C. Commercial and Non-Commercial Contracting

You may decide to market under both (A) and (B) above. Some small businesses sell their product commercially, but contract for product implementation and support on a service contract basis.

If you are selling under (A) and (B) or just (B) above you should examine this web site further to obtain sufficient detail to develop your business system in estimating, proposing, accounting and billing the government for contracts not qualifying under FAR Part 12.

YOUR CUSTOMER

Although all requirements in the federal government market emanate from the US Agencies there are several ways for meeting these requirements with a business arrangement that suits your small business.

A. U.S. Government Agency As a Customer

There are many agencies or "Departments" in the Federal Government. Each of these agencies has a statutory obligation to contract from small business for 23% of everything it buys. Contracting officers must file reports annually demonstrating they have fulfilled this requirement. Not fulfilling the requirement can put the agency annual funding in jeopardy. You have a motivated customer in federal government contracting officers and buyers.

As a prime contractor to one of these agencies your small business proposes, negotiates and contracts directly with a federal government contracting officer. You may or may not have subcontractors or suppliers. 

A subcontractor is a teaming partner who agrees to accept a portion of the effort under your prime contract and abide by the prime contract terms and conditions flowed down to him from you. On competitive procurements the business arrangement is usually mutually exclusive on the part of the subcontractor and your company. 

A supplier is a purchased finished vendor or off the shelf retailer who sells you items or components necessary to produce your product but does not accept the flow-down provisions of your prime contract other than the most general terms and conditions such as US Public Law , EEO, Tax Provisions, Warranty and the like. Supplier relationships are not usually mutually exclusive arrangements.

You may be able to fulfill the entire prime contract scope of work or meet the product specification from within your company. However, major government procurements are increasingly geared to teaming arrangements involving a prime and several subcontractors. As the prime on such a procurement you normally have the lead share of the work scope, you have a product critical to the program, you know the customer the best or a combination of these factors. Your subcontractor team members are usually not your direct competitors but are involved in lines of work that complement your business and enable the team to fulfill a scope that is larger than any single member could undertake alone Your direct competition is most likely forming similar teaming arrangements in an attempt to win the larger jobs which can span a number of years in duration and mean good, solid cash flow for all participants.

A General Services Administration (GSA) Schedule is a pre-qualifying way to obtain business directly from all federal government agencies. The GSA performs the service of negotiating with you for multi-year pricing of labor, products and equipment, together with pre-established terms and conditions. Your schedule and terms are posted to the GSA Web Site and all federal agency buyers can expeditiously buy from your schedule. A GSA Schedule is normally set up for 5 years. Achieving and Utilizing a GSA Schedule

The GSA also sponsors and manages major Indefinate Delivery/Indefinate Quantity (IDIQ) procurements such as "Alliant" and "Alliant Small Business" for Information Technology. These contract vehicles pre-position large and small contractors and teams of contractors to accept competitive delivery orders under established terms and conditions and standardized solutions for technological areas in high demand across the federal government. An IDIQ procurement can span a period as long as 10 years.

B. A Government Prime Contractor As A Customer

Government Prime contractors who are large businesses (roughly defined by the SBA and the banking community as having over 500 employees and annual sales in excess of $20M) and who hold federal government contracts have the same requirement as government agencies to buy at least 23% of the supplies and services in support of those contracts from small business.

Large business, under federal procurement law, must prepare and submit annual "Small Business Contracting Plans" for approval by the local Defense Contract Management Area Office (DCMAO) nearest their headquarters. These plans must include auditable statistics regarding the previous 12 month period in terms of contracting to small businesses and the goals forecast for the next year. The federal government can legally terminate a contract in a large business for not meeting small business contracting goals. Approved small business plans must accompany large business contract proposals submitted to federal government agencies. You have a motivated customer in large business subcontract managers, administrators and buyers. A small business who becomes a prime contractor does not have to meet the annual small business contracting plan requirement until it becomes a large business.

In selling to a prime contractor you propose, negotiate and subcontract with a company who holds a contract with a US government agency and in turn flows down its provisions to you. Or you sell under purchase orders on a commercial basis (FAR Part 12) to another company who holds a federal government contract.

C. Selling Via a Joint Venture

There are occasions when two companies wish to combine their respective products or resources and form a separate entity to undertake a contract, usually a prime contract with the federal government. The marketing considerations for such a venture involve impressing the client with the resources being dedicated to the program or addressing government concerns about broadening the technology and assuring redundant capability in the industrial community. A joint venture consists of human and other resources from the participating companies. However, it stands alone as a legal entity. Joint venture agreements are difficult to craft. Protecting proprietary information, together with intellectual property is especially demanding. Dividing the contractual effort and ultimately integrating it into a final product or service is also a challenge. Complicating the scenario is the fact that the US Government reserves the right to approve joint venture agreements before a contract can be issued to the entity. One company usually assumes the lead role in the joint venture. Some joint ventures hire a joint venture administrator who is the only legal entity authorized to sign a binding document on behalf of the two companies once it has been approved by each firm through a joint venture board, with equal representation by both organizations. Administration, accounting and billing at the joint venture level is a third tier of administrative cost which must be born by both companies.

Your customer in the federal market is either the government itself or a prime contractor. You will sell as a prime contractor, as a commercial supplier or as a subcontractor and on occasion you may have the need to establish a joint venture with another firm.

MARKETING AVENUES

A. Small Business Certifications

Your small business designation at your SAM registration places you in the small business set-aside market for 23% of the total goods and services the federal government buys. Within small business, there are additional self-certifications and SBA certifications to which you can apply if you qualify.small business designations 

Self-certification occurs when you respond to government requests for proposals, cite you registration number and state in your proposal certifications and representations that you are a Small Business and whether or not you have set-aside designations.

Procurement contracting officers and prime contractors are responsible for verifying self-certifications. Owners claiming designations must have a major equity share in the business and must be involved in running the business operations.

The SBA certifies Small, Disadvantaged Businesses under their "8(a) Program". The application for this certification is available at the SBA Web Site for businesses who qualify by virtue of minority ownership and minority involvement in running the business operations. The SBA reviews, approves and grants 8(a) Certifications to small minority-owned businesses. Please see the following link:

SBA 8(A) Certification Program

Federal agencies and prime contractors are required to set goals and contract to achieve annual objectives for each of the above certifications within the overall 23% small business contracting mandate required by statute. Procurements are regularly "set-aside" for these designations to achieve government and prime contractor annual objectives. Procurements are also set-aside for small business in general, which includes companies who may not qualify for the additional small business certifications discussed above.

B. Capability Statement

With your small business SAM registration and additional certifications, you are ready to develop your capability statement. This document will be a promotional brochure which on paper and through the electronic media advertises who you are, what your do and why the government or prime contractors should buy from you. Major elements of your capability statement in addition to your small business designation and certifications are as follows:

(1) Company overview

(2) Supplies and services description couched utilizing your marketing ideas and strategy.

(3) Past performance of your enterprise or your personal background and qualifications (experience, education, etc.)

(4) Facilities or capabilities overview (How you perform your service couched in a manner that will appeal to your target market)

(5) Explanation of the positive results the client should expect.

(6) Points of contact and ways to contact you for meetings, placing an order and contracting your services.

Your Capability Statement

Your capability statement can be distributed on paper to your target market as a brochure, emailed as an attachment and linked into related industry web sites or partner web sites to get the word out about your product or service. The capability statement targets contracting officers and prime contractor buyers who are seeking to fulfill their small business buying goals. It is a way to get you in the door and speak to or correspond with the management and technical personnel who are the decision makers in sourcing small business buys.

C. Self-Marketing for SBA 8(a) Small Disadvantaged Business (SDB)'s and Historically Under-Utilized Business (HUB) Zone Contractors

If you qualify for a SDB Certification or can attest that you are located in a HUB Zone, these items can be valuable marketing tools. Presenting your capability statement to a prospective federal customer and meeting the management, technical and procurement decision makers puts you in a position to self market projects. All federal agencies and large business contracting to the federal government have to meet SDB and HUB Zone annual buying objectives. They have processes for competitive procurements. The processes are generally lengthy to comply with regulations governing solicitation on the open market, request for proposals, source selection, negotiation and award.

Under the 8(a) SDB Program and the HUB Zone Program if you can assist a federal agency or large business in identifying a product or service they need and that you are a qualified source to fill that need then the your customer can buy it directly from you and bypass the competitive process entirely. The key to achieving this type of targeted marketing is to contact and/or visit your customer regularly and get in front of the solicitation process. Once a project has gone to the "Sources Sought" or "Solicitation" stage you can still convince the customer to set it aside for 8(a) or HUB Zone firms, but you will be competing with other SDB's or HUB Zone contractors in your NAIC's Code for the business. The "Early Bird Gets the Worm", adage is useful for SDB and HUB Zone organizations. Some buying agencies even permit an 8(a) SDB or HUB Zone Contractor to assist in writing the product or performance specification for a project to expedite the process. Federal agencies and large businesses are motivated to use the non-compete, set-aside features of the 8(a) SDB and HUB Zone Programs. Doing so permits them to meet their small business procurement goals and enables a swift buying action of a product or service for which they may have a critical need. 

D. GSA Schedules and Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts

The General Services Administration (GSA) pre-qualifies contractors with a terms and conditions package and negotiated rates for products or services. Your GSA schedule is then posted to the web at:

This site is searchable by all government agencies who want to buy products and services. A GSA schedule allows you to offer a pre-existing contract vehicle with established pricing to any federal government agency or prime contractor. This shortens the procurement process considerably. In some procurements, a GSA Schedule is necessary to qualify for bidding certain jobs. You can read more about applying for a GSA Schedule by going to the General Services Administration Web Site at:  GSA Web Site

Under Indefinite Delivery/Indefinite Quantity (IDIQ) Contracts, terms and conditions and labor hour pricing are agreed upon in advance with an agency for a period of time (usually a multi-year arrangement). Many large government agencies contract utilizing IDIQ contract vehicles and often make multiple awards to several companies who then compete for work on a delivery order basis thereafter. 

The GSA also manages large scale IDIQ procurements in high technology areas such as Information Technology (IT).  Individual agencies then compete and procure IT products and services against the standard with established terms and conditions and known pricing. Once qualified, winning in this type of environment is simplified to submitting the best technical solution to a given delivery order with the lowest man-hours or product pricing. It is not uncommon for competitors to offer discounts during the competition.

Under both GSA Schedules and IDIQ Contracts individual delivery orders are negotiated separately regarding the labor hours, material and travel cost necessary to complete a discrete scope of work.

E. Teaming

Because the federal government buys on such a large scale and in many acquisitions chooses to package related technologies or services, it is a necessary part of your marketing plan to consider teaming with other companies. As discussed in paragraphs II. and III., above, large businesses who are in the same line of work as you are have a requirement to subcontract to small businesses under federal government contracts. In addition, large and small companies who are in related or synergistic businesses to yours actively seek partners in the federal government market to permit access to larger packaged procurements.

Attend trade conferences, join trade organizations, get into technical blogs on the web. All large businesses contracting with the government have a small business liaison officer which you can locate at the company web site. Present your capability statement electronically or preferably in person to local large businesses engaged in federal government contracts who may need your services.

Many large businesses are willing to team as a subcontractor to a small business to get access to the small business set-aside market. A large business cannot receive an amount in excess of 50% of the dollar award of a small business set-aside, but many large businesses are willing to subcontract to multiple small businesses on federal government contracts to broaden their business base.

For SDB companies, the "Mentor - Protege' Program is available. This is a federally sponsored program whereby a large business sponsors a smaller business through active teaming and mentoring. Your can learn more about this program at:

Mentor Protege Program

The best way to approach a large business or another synergistic small business is to have a program target as a discussion vehicle. If you find a project for which you need a partner or partners, carefully research the firms you are considering, check their D&B's, see if they have entered their company in the "Interested Parties" frame of the solicitation at The System For Award Management (SAM).

When teaming with another company, most arrangements become mutually exclusive if you are subcontracting to one another and not just supplying off the shelf products. As the business relationship evolves and you begin sharing information a two way Non-Disclosure Agreement (NDA) is usually necessary to protect proprietary information.

As the business relationship matures and the parties agree to become exclusive, a teaming agreement is also necessary. At this point you have agreed upon who will be the eventual prime contractor and who will be the subcontractor. The areas regarding work share and proposal preparation are particularly critical in terms of thorough definition to avoid future misunderstandings among the parties. If and when the prime contract is awarded, the teaming agreement is replaced by a subcontract from the prime party to the subcontracting team member.

F. Small Business Innovative Research Program

Other federally sponsored programs are the Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) Programs for high technology small business. These are competitive programs awarding small business fundng in critical high technology areas. Your can learn more about the SBIR/STTR Programs by going to:

SBIR/STTR Program

SUMMARY:

This article has offered a template of avenues for small business federal government contract marketing. You should apply the template to your business plan and explore which avenues suit your enterprise. The federal government contract customer is motivated to buy from you. Your marketing task is to target and find your customer considering the supplies and services you sell. The federal government offers competitive advantages to various types of small business, depending on ownership and size. Federal government contracts offer small purchases and long term contractual arrangements from firm fixed price purchases to cost type and time and material contracts.  The opportunities are there for small business entrepreneurs’ to pursue.

Small Business Federal Government Contract Proposal Preparation

A promising solicitation by the government may be a result of your self-marketing efforts or you may have located it at the System for Award Management (SAM), the gateway for all federal government business in excess of $25K.  

It is now necessary to conduct a Bid/No Bid Decision, develop a competive strategy and prepare a winning proposal for a small business federal government contract.

The fact that the government has now converted a project requirement into a formal solicitation means that the funding is available for a contract and the authorities within the government agency have authorized a source selection process.

BID/NO BID DECISION

Government contract proposal preparation is time consuming and can be costly. Meeting the agency Request for Proposal (RFP) requirements with a responsive proposal can be well worth the effort if a winning strategy can be formulated. When considering submitting a proposal to a given government solicitation, conduct a bid/no bid exercise. By going through that process you will begin formulating your win strategy or you will discover that you should not bid this job for lack of such a strategy. The elements of the process are discussed below in the form of questions to ask yourself against topics for key consideration. Affirmative or non-affirmative answers to the topical questions and ability to fill in the blanks below will drive your decision to bid or not bid a solicitation.

A. Customer:

Do you know this customer? Yes __ No ___
Does this customer know you? Yes___No ___
Do you have any idea of the available funding for which the customer has obtained authorization? Yes___No ____
Specify the marketing contacts which have been made with the customer thus far:
Date:
Contact:

B. Supplies and Services:

Specify the supplies and services to be delivered in the prospective contract:

Line Item (s):
Description:

Are the supplies and services in the RFP Statement of work a good match for what the company sells? Yes ___No ___
Is the RFP Statement of Work specific enough to identify risks? Yes____No ____
Is the RFP schedule specific enough to determine the delivery requirements? Yes____No____
Can the delivery schedule in the RFP be met? Yes ___No _____
Specify the delivery schedule for the prospective contract:

Line Item:
Delivery Date:

C. Contract Type/Value/Start/End Date:

Does the proposed contract type (FFP, CP, T&M, etc) suit the nature of the work? Yes___ No ___
Specify the contract type for this program: _______________.
Are there any unusual terms and conditions specified in the government RFP? Yes ____No___
Specify any unusual terms and conditions: ___________________________________________

What is the Rough Order of Magnitude (ROM) value of the prospective contract? $___________.
What is the anticipated start date of the contract? ________.
What is the anticipated end date of the contract? ________.

D. Company Strengths:
Is this prospective contract for effort in which the company has strong skills? Yes____No ____
Specify the strengths the company will utilize in meeting the product specificaton or statement of work:


E. Company Weaknesses:

Are there any company weaknesses in meeting the product specification or statement of work? Yes ___No ___
Specify any weaknesses for which the company must compensate and manage associated risks:


F. Teaming Arrangements (If any):

Does your company plan to team with other companies in the performance of the prospective contract? Yes ___No ___
Identify the other team member companies:


Will your company be a prime or a subcontractor? Prime___Subcontractor ____
Have NDA's and Teaming Agreements been executed? Yes____No ______

G. Competition:

Is this a sole source set-aside procurement to your company? Yes____No____
If this is a competitive procurement, identify the prospective competition and their associated strengths/weaknesses:


H. Win Strategy:

Identify the proposal features and themes which will be utilized in the proposal as descriminators to win this program:

Management:



Technical:



Cost:


I. Proposal Budget:

Estimate the man hours and dollars for proposal labor, any travel expenses, shipping, packaging, samples and other expenses associated with preparing the proposal. The government does not reimburse the contractor for proposal preparation under the subsequent contract. Proposal expenses must be included in the cost center overhead or G&A and accounted for as marketing expense allocated across the cost center or the company.

Labor Hours __
Labor Dollars $______
Material _______
Travel _______
Reproduction _______
Samples (if any) _______
Packaging/Binding/Ship _______
TOTAL $_______

J. Bid/No Bid Decision:

If you can answer "YES" to at least 5 of the questions under paragraphs A through D above, it is likely you should bid this procurement.
If the answers to 7 of the 10 "YES" or "NO" questions under paragraphs A through D above are "NO" it is unlikely you should bid this procurement unless the answer to G is "YES". Even then, examine your answers and carefully review whether this business is suitable for your company. If the answer to E is "YES", it is unlikely you will bid this procurement successfully unless the answer to G is "YES". Even then, determine how you will overcome the weaknesses you have identified in your company associated with doing this work before you decide to bid it. Carefully compare the competitive analysis under Item G to the win statagy under H before you make your final decision.

K. Decision:

BID _____
NO Bid _______

YOUR PROPOSAL

You have decided to bid a prospective project. You have downloaded the RFP from the government agency and the clock has started on the proposal due date.

Visit the federal government on line certifications and representations web site and complete the standard information there, which can be utilized for all federal agency proposals. Certifications and representations are required for virtually every proposal submission. That web site is at:


System for Award Managment (SAM)

The following information addresses the proposal process. It is from an independent consultant named Deborah L. Kluge, who is a specialist in proposal writing and consulting. The below is an extract from Deborah's Web site.

If you are preparing a FAR Part 12 Commercial Proposal, certain elements of this material may not apply, but you are encouraged to utilize the information and the checklist to insure you have covered all the bases.

"THE RFP

Read it once, then read it again. And again. Experienced bidders know that several readings of an RFP are necessary for a complete understanding of what is required.
Learn what the lettered sections of an RFP are (e.g., Section B refers to your pricing, Section C is the scope-of-work, Section K contains Representations and Certifications, Section L provides instructions to the bidders, Section M specifies the bid evaluation criteria, etc.). The titles of the lettered sections are generally the same in every RFP.
Be aware that information critical to your bid may be scattered among many different sections of an RFP.
Put the RFP in a 3-ring binder for easy use as a reference document. You might also want to insert dividers in front of each important section for quick reference.
Use small "Post-It"™ notes at the edge of a page to mark important pages or paragraphs. That way, you can find them quickly.

If you don't understand some of the information in the RFP, you can submit written questions to the Contracting Officer.
Some RFPs specify a date by which questions are due. Make sure you send in your questions before the due date or they may not be considered.
Be aware that the Government's response to all submitted questions are distributed to all bidders, usually through a written amendment to the RFP. Although you and your firm will not be identified as the "asker" of specific questions, the way in which you word your questions could provide important information to your competitors. Word your questions carefully to ensure that you don't give away information on your strategy or pricing.
If you call the Contracting Officer to obtain or clarify information in an RFP, be aware that verbal information given to you by the Government is not binding.

THE PROPOSAL OUTLINE

If you have downloaded an RFP from the Internet, you can use that file to begin constructing your proposal outline.
If you do not have the RFP on disk, use a scanner to scan in important sections for use in preparing your outline.
Some people prepare an annotated outline as well as a basic outline. An annotated outline can contain important points from the RFP, as well as your own information on what you are planning to say in each section.
If you prepare an annotated outline, copy your file, save it under a different name, and delete the annotations. The result will be a basic outline which you can use for easier viewing and tracking of proposal sections and subsections.
For each section and/or subsection of your outline, indicate the estimated number of pages that will be written, the person responsible for doing the writing, and the evaluation points.
Put important instructions on the first page or at the top of your outline, so you don't have to rummage through the RFP to find them. These instructions might include: proposal due date and time, number of copies, page limits, font size, page margins, packaging and delivery instructions.

THE PROPOSAL SCHEDULE

Make one and stick to it!
Work backwards from the proposal due date.
You might want to make a separate schedule for preparation of the cost/business proposal.
Make sure you leave plenty of time for copying, binding, and delivering the proposal. Remember, the copier knows that an important document is being copied, so it will break, jam or smudge. Have a back-up plan that includes having extra paper and toner on hand and sending the proposal out to be copied.
Distribute the schedule to all members of your proposal team.

PROPOSAL PREPARATION

Make sure you are familiar with the instructions in Section L of the RFP.
Study the proposal evaluation criteria and the points allocated to each section/subsection of the technical proposal, as well as the points that are allocated to cost. This information will tell you what to emphasize and where to put your efforts with regard to proposal preparation.
Hold an intial and regular follow-up meetings with your proposal team to discuss strategies, progress and problems.
To the extent possible, your Technical Approach and strategy should provide answers to the following questions: who, what, when, where, how, and why.
Depending upon the instructions in the RFP, your Management Section might contain a discussion on how you will manage the overall project, a discussion on how you will manage and oversee the work of your staff and subcontractors (if any), an organization chart of the project, and position descriptions of project staff.
In your Personnel Section, you may be required to include narrative information on the experience and skills of the staff members you are proposing for the project and/or their resumes.
In your Related Experience or Capabilities Section, you may need to demonstrate that you have performed similar or related work for this or other clients.
Your proposal may have other sections such as an Executive Summary, a discussion of your Understanding of the Problem, Appendices, or other required information as specified in the RFP.

Don't assume that the Government knows your organization's capabilities, staff or the projects you have carried out. The Government is supposed to evaluate only the specific information contained in your proposal. That means it must be written down in accordance with RFP instructions.
Use tables, charts and graphics to summarize information ("a picture says a thousand words") or to break up your narrative.
Check the entire proposal for the following: technical consistency; spelling; page numbering; section/subsection numbering or letting; consistency of appearance of headings, subheadings, font types and font sizes.
Make sure you have filled in and signed all the forms in the RFP that you must return with your bid.
Before and after copying your technical and cost proposals, check to see that each copy contains all pages and that they are in the proper order.

COSTING/PRICING 

You have a technical strategy -- you should also have a costing and pricing strategy!
Don't wait until the last minute to begin gathering cost information that you will need to prepare your cost estimate.
Be aware of and understand the type of contract you are bidding: fixed-fee, cost-plus, cost-reimbursement, time and materials, etc. This will likely affect the way you price your proposal.
Prepare a spreadsheet template or checklist of items to include in your cost estimate.
Make sure your cost estimate is consistent with what you are proposing to do or provide.
You may need to develop some specific assumptions for pricing purposes. If appropriate, you can include these assumptions in your cost/business proposal on a separate page or as footnotes to your estimate. In any event, always document your assumptions so that you can refer to them later and make changes if needed.
Check and re-check your numbers and formulas. Review the hard copy of your estimate to help in spotting errors.
Make sure that your cost estimate can be easily read. Don't use a font that is too small. For guidance on cost and pricing data, please see the following articles:

Cost and Pricing with Credibility

Certified Cost and Pricing Data

IF YOU WIN

Celebrate!
Uh oh -- you now have to actually manage and implement your project.

IF YOU LOSE

You can call the Contracting Officer to arrange an in-person or telephone debriefing to find out the reasons for your loss.
Try not to get too discouraged -- no one can win all the time.
Learn from your experience and apply that learning to your next bid.

PROPOSAL PITFALLS - Don't Let These Happen to You!

Failure to follow the RFP instructions regarding organization of the proposal, inclusion of required information, page limits, volumes, etc.
Failure to take evaluation criteria and allocated points into consideration when preparing your response.
Failure to understand and to demonstrate an understanding of the problem (i.e., the reason why the agency is issuing the RFP).
Failure to submit your proposal on the required date and time.
Failure to include all of the information requested by the Agency.
Failure to tailor your response to the specific RFP.
Costs/Prices are unreasonable (too high or too low) or incomplete.
Costs/prices do not provide any detail or breakdown information (if required) for line and sub-line items.
Failure to include specifics of your proposed approach to the project.
Proposal is unprofessional in appearance (e.g., typos, blank pages, unnumbered pages, smudges, no whitespace, sloppy-looking, etc.). This reflects poorly upon your company.
Proposal is poorly written (e.g., information is not presented/organized in a logical manner, proposal is difficult to follow, poor grammar, etc.).
Proposal merely repeats or paraphrases the RFP.
Proposal does not explain how or by whom the project will be managed.
Proposal does not contain RELEVANT information about your firm, its capabilities, and/or its management and staff.
Proposal does not demonstrate that your firm/organization and personnel have the experience and capability to carry out the project.

PROPOSAL CHECKLIST:

1. RFP/DOCUMENTS

Obtain complete copy of RFP
Distribute RFP to appropriate staff.
Review RFP for missing pages/sections.
Prepare questions for submission to Contracting Officer.
Receive and review responses to questions.
Collect, distribute and review pertinent background documents.

2. PARTNERS

Identify partners to participate in bid.
Determine type of partnership arrangement.
Prepare teaming or other type of appropriate agreements.
Receive signed agreements from partners.
Determine each partner's level of effort for project.
Number and type of long-term staff.
Number and type of consultants.

3. TECHNICAL STRATEGY

Hold strategy meetings.
Identify the partnership's strengths and weaknesses.
Identify competition and their strengths and weakness.
Identify ways to differentiate partnership from competition.
Develop strategic themes.
Develop strategy for each component and overall.

4. TECHNICAL PROPOSAL

Prepare draft outline/revise as needed.
Identify & select writers for each section.
Determine page numbers for each section.
Determine document format (font, major/minor headings, etc.).
Provide writers with written formatting guidelines/instructions.
Prepare/distribute list of nomenclature, abbreviations, acronyms.
Identify and provide writers with relevant sections from past proposals.
Prepare schedule/identify due dates for draft sections.
Determine review, feedback and editing process for written sections.
Ensure compatibility of software packages and versions.
Ensure compatibility of document transmission via e-mail.
Ensure sufficient quantities of appendix materials are available.

5. PERSONNEL

Prepare packet of materials for long-term candidates.
Prepare personnel checklists/tracking list for candidate documents.
Prepare commitment letter(s) for signature by candidates.
Recruit long-term staff and consultants.
Collect Resumes
Sort Resumes by category/areas of expertise.
Review Resumes
Identify best candidates and alternates.
Confirm candidates' interest/availability.
Obtain additional info from candidates for Resumes, if necessary.
Obtain signed letters of commitment from candidates.
Review personnel checklists for missing items.
Determine format for re-written Resumes.
Re-write Resumes.
Prepare skills matrices.

6. PAST PERFORMANCE REFERENCES

Use RFP format if required.
Update and/or prepare past performance information as needed.
Review for accuracy and completeness."

SUMMARY:

This article has offered guidance as a template to apply to your marketing operations for accommodating federal government contract proposal preparation. Proposals are special, sometimes exhausting projects, but a necessary part of doing business with government agencies. Like many other aspects of business, the more proposals you prepare, the more you learn and the more can borrow from past practice for the next one.

As a final note please read the following carefully. Your proposal data may contain rate information, proprietary data or strategic technical solutions which you would not want to fall into the hands of a competitor. The government does not sign Proprietary Data Agreements (PDA's). The government's obligation to protect your information is covered in the following FAR clause and requires protective markings by you on the title page of your proposal and on each subsequent page.

FAR 15.509 Limited use of data.

(a) A proposal may include data that the offeror does not want disclosed for any purpose other than evaluation. If the offeror wishes to restrict the proposal, the title page must be marked with the following legend:

"The data in this proposal shall not be disclosed outside the Government and shall not be duplicated, used, or disclosed in whole or in part for any purpose other than to evaluate the proposal; provided, that if a contract is awarded to this offeror as a result of or in connection with the submission of these data, the Government shall have the right to duplicate, use, or disclose the data to the extent provided in the contract. This restriction does not limit the Government's right to use information contained in the data if it is obtainable from another source without restriction."

(b) The offeror shall also mark each restricted sheet with the following legend: "Use or disclosure of proposal data is subject to the restriction on the title page of this Proposal."

(c) The coordinating office shall return to the offeror any unsolicited proposal marked with a legend different from that provided in 15.509(a). The return letter will state that the proposal cannot be considered because it is impracticable for the Government to comply with the legend and that the agency will consider the proposal if it is resubmitted with the proper legend.