Your firm recently decided to enter the federal market and you were chosen to take the lead. Your first task: Devise a strategy. Here are 10 action items that you can take to make tangible progress toward that goal.
Identify relevant market niches
Which segments of the federal market (if any) make sense for your firm? Firms that enter and thrive in the federal architecture, engineering, and construction (AEC) market do so in individual niches of the market. They choose niches wisely.
Action Item #1: Who buys, and where? (weeks 1-3) – Which agencies (and branches or divisions within agencies) procure the services in which your firm specializes? How much does each of these entities procure? Are there distinct geographic patterns?
This analysis can be performed using either the Federal Procurement Data System (FPDS; www.fpds.gov) or USASpending (http://usaspending.gov). Both draw on the same database. FPDS is more efficient if you have good database skills; USASpending's emphasis on user friendliness is nice but it takes longer to specify searches. Whichever one you use, it is advisable to download the data you retrieve, import it into a desktop tool such as Excel, and use the latter's analytic tools.
Action Item #2: How are buys made and which firms have won? (weeks 2-4) – After finding agencies (or sub-agencies) of potential interest, research the competitive landscape. For each niche of potential interest:
- How does the relevant agency procure services?
- Which firms are the market leaders, including for small business set-asides and for full-and-open competitions?
- What are the trends among firms? For example, which firms have experienced growth within the niche in the last five years and which have declined?
This data is available in FPDS and USASpending.
Action Item #3: What types of contracts are issued? (week 4) – To fully understand whether a particular niche is a good match for your firm, it is important to understand the types of contracts awarded on dimensions such as the following:
- task order contracts vs. definitive contracts;
- firm fixed price vs. time and materials vs. cost-reimbursable contracts;
- single-award vs. multiple-award contracts; and
- contracts that can only be utilized by the awarding agency, or contracts that can be used by many different federal agencies.
This data is available in FPDS and USASpending.
Action Item #4: Study federal budgets and likely trends of relevance to your firm (weeks 4-5) – Federal design and construction budgets are stagnating for some agencies, slightly growing for others, and declining for many. In the midst of these tough realities, there are several areas of spending that are gaining strength.
In many niches, agencies will place greater emphasis on front-end planning. More emphasis will be placed on rehabilitating, re-purposing, and expanding existing facilities. Most federal agencies will increase their investments in energy efficiency and water conservation initiatives. Identify key trends in federal niches of interest to your firm and assess whether your firm can provide AEC services of the type that will be demanded during these tough budgetary times.
Obtain publicly available budgetary information for agencies (and sub-agencies) for the niches of potential relevance to your firm. Some of this data – especially for defense agencies – is quite detailed. Examine presentations given by managers of these agencies at industry conferences such as the upcoming Federal Design and Construction Outlook Conference (Dec. 4, 2012, in Washington, D.C.; http://aececobuild.com/the-federal-design-construction-outlook-conference). Talk with federal budget experts from industry groups such as the Associated General Contractors of America.
Most firms that succeed in the federal market develop and nurture solid relationships with federal agencies and with other firms as a foundation for intelligence gathering, direct sales, and teaming.
Action Item #5: Kick-start relationships with federal agency(ies) in your target niche(s) (weeks 5-12) – By the end of week 12, identify at least 100 federal staff members in the specific agencies and sub-agencies in your target niche(s) and have high-quality interactions with at least 25 of them. Use the following resources to find the names of 100 potentially relevant federal staff members:
- Examine FedBizOpps, focusing on solicitations and other announcements in your firm's areas of specialty. Every announcement lists the sponsoring agency and at least one point of contact.
- Look at federal government organization charts for the agencies of interest that you identified in Action Item #1.
- Use social media tools to find potential contacts.
- Talk with colleagues in other firms that already are active in the federal market.
- Talk with industry associations, many of which make it their business to gather this type of information.
A corollary goal is to conduct 25 face-to-face meetings within the first 12 weeks, assuming that you will receive help from colleagues. In a typical meeting, spend no more than a minute introducing yourself and your firm; spend all remaining time asking probing questions and listening. Learn subtle aspects of the agency's missions, its current crises or challenges, its requirements for AEC skills of the type your firm provides, how it utilizes contractors, and its willingness to award contracts to fresh faces. Obtain names of several other potential new federal contacts. Send a follow-up note that contains at least one, high-value-added insight or suggestion that resonates well with one of the federal person's key interests or concerns.
Action Item #6: Kick-start relationships with other firms in the federal market (weeks 5-12) – In most successful firms in the federal market, key managers avidly network with their counterparts in other firms. They do so to share intelligence and learn about potential opportunities long before formal solicitations are released, leverage their own intelligence-gathering assets with those of other firms, share leads in some situations, and position themselves for future teaming arrangements.
In this action item, hold at least 10 meetings with key managers in other firms. Introduce your firm and its capabilities, express your interest in entering the federal market, and set the stage for longer-term relationships that involve the types of goals listed above.
What can you offer other firms as an enticement to setting up a meeting (or telephone conversation)? Think broadly. For example:
- Do you have marketing intelligence to share, based on what you learned in some of your networking meetings with federal staff members (Action Item #5)?
- Is your firm considered to be a "small business" for the federal market niches you are targeting (check resource at www.lincstrat.com/size-standards.htm)? Do you also qualify for other designations such as "veteran owned small business?" If so, mention this when you set up a meeting with larger firms. Almost all such firms have Small Business Subcontracting Plans, and these large firms might have strong incentives to develop relationships with yours.
Improve your federal marketing infrastructure
To succeed in the federal market, you need to learn its rules, position your firm as a "safe buy," and learn how proposals are evaluated in the federal niches of interest to your firm.
Action Item #7: Identify and learn key procurement rules and contract clauses for your target niche(s) and develop a longer-term plan for developing relevant expertise (weeks 5-8) – When federal evaluation panels sit down to sift through proposals, some are eliminated within minutes because:
- the table of contents reveals that the offeror mistook the proposal's instructions and evaluation criteria as mere "suggestions" and the offeror had a "better idea" about how to organize the response;
- the offeror suggests an approach to managing the project that violates one or more federal procurement rules or standard contractual clauses; or
- the technical proposal provides detailed cost/price data.
Under Action Item #7, your assignment is to identify and learn the basics of the most important provisions of the Federal Acquisition Regulation (FAR) that pertain to the types of competitions that are held in your federal niches of interest and the agency-specific procurement rules that apply, which often are in the form of agency supplements to the FAR. You also should develop a longer-term plan – how will your firm develop expertise on these topics and provide relevant training to all staff members who will be involved in the federal sector?
Action Item #8: Do an in-depth analysis of five recent solicitations in your target niche(s) (weeks 10-11) – Study recent solicitation documents to learn more about the competitive framework in each specific federal niche you are considering. For example:
- What evaluation criteria were specified and what were their relative weights?
- Do the criteria explicitly favor firms with proven federal experience or geographic proximity?
- How much emphasis was given to technical approaches, personnel, and management plans?
- Do the criteria weigh in favor of (or against) large teams of subcontractors?
Solicitation documents often include many full-text clauses that will appear in any resultant contract. Combined with what you learned in Action Item #7, studying this material will help you gain a better understanding of how the contracts in this niche are structured, and will help you develop the expertise you need to portray your firm as a "safe buy."
Find high-value federal opportunities
By the end of a three-month planning process, you should be able to identify at least a handful of federal opportunities that make sense based on what you have learned about what it takes to succeed in your target niches.
Action Item #9: Identify a handful of near- and longer-term opportunities in your niche that are well suited for your firm (weeks 10-12) – Subject your emerging expertise to a reality test by looking through FedBizOpps for opportunities. For each potentially high-priority opportunity you identify, how well can you articulate the following?
- specific elements of the solicitation document's evaluation criteria that play to your firm's strengths;
- most likely competitors and their strength within the relevant niche;
- specific firms you might approach for teaming discussions;
- types of strengths that would have to be demonstrated in the proposal;
- some of the agency's key issues, methodological preferences, and other factors that are not explicitly stated in the solicitation document;
- the type of contract that would be issued – cost reimbursable, fixed price, time and materials – and whether it would be a good fit for your firm; and
- if for a multiple award, a reasonable guess as to the number of contracts to be awarded.
Action Item #10: Decide whether to obtain a GSA Schedule Contract (weeks 10-12) – Many AEC firms that enter the federal market quickly obtain one or more GSA Schedule Contracts, such as Professional Engineering Services or Facilities Maintenance and Management Services. These contracts can be used by any civilian or military federal government agency. Many federal staff members like to use them because they are administratively streamlined and because GSA Task Orders can be assigned and initiated relatively rapidly.
For the right firms, a GSA Schedule Contract can be quite useful. But in many cases they turn out to be not particularly valuable because of various restrictions such as severe limits on the types of engineering services that can be performed under these contracts. Read about these contracts carefully, make a reasoned decision, and if the fit looks good, give it strong consideration as part of your federal strategy.
Developing a strategy for entering the federal AEC market can be difficult. Nevertheless, the 10 proposed tangible action items might help accelerate the process for developing a tailored strategy for your firm.
Dave Alexander is a principal with Lincoln Strategies LLC (www.lincolnstrategies.com) in Carlisle, Mass. Alexander authored ZweigWhite's "Guide to Winning Federal Government Contracts for AEC & Environmental Firms (2nd Edition)." He can be contacted at firstname.lastname@example.org.