Text Version Recovery Act Opportunities: How to Win Federal Contracts Slide 1 Recovery Act Opportunities: How to Win Federal Contracts Welcome to SBA’s training program about Federal contract opportunities. This program is an easy to follow guide designed to help you understand the government’s procurement process. It also provides specific guidance on how to take advantage of contract opportunities that are the result of the Recovery and Reinvestment Act of 2009. J. O’Connor / SBTN August 10, 2009 Slide 2 Introduction The Recovery Act is designed to jump-start the American economy. It is a comprehensive Bill with many parts – resulting in the availability of billions of dollars in Federal grant and contract opportunities. This guide provides a basic overview of the federal procurement process. It also provides easy to follow instructions on how to find recovery and other Federal contract opportunities. Importantly, the course is indexed by subject matter so you can quickly and easily find or return to topics of particular interest. This is important feature. Review all or only sections of the course you are interested in. You will also find throughout the program -- multiple and direct links to targeted contract resources. Slide 3 Changing Times – New Opportunities These are changing times with new opportunities, shaping a New Economy. We are challenged today by a sluggish economy – an economy that will be turned around by innovation, entrepreneurship, knowledge sharing and stimulus incentives by the Federal government. We are also largely influenced by globalization, incredible new technologies, the Internet, and an economy that is service oriented and knowledge-based. These changes – although painful to some – have ushered-in many opportunities for innovative small businesses who are evolving with the times and who are fundamentally grounded in the New Economy. Slide 4 The Federal Buying Market Recovery efforts and stimulus spending are influencing the federal buying market. The U.S. government is the world's largest buyer of products and services. Purchases by military and civilian installations amount to nearly $500 billion a year, and include everything from complex space vehicles to janitorial services. Stimulus spending as a result of the Recovery Act – will expand this amount to almost $600 billion in 2009. In short, the government buys just about every category of commodity and service available. Slide 5 Small Business Incentives & Opportunities The good news is: Federal law requires government agencies to establish small business contracting goals. The bad news is: these goals are not always achieved. The goals however, provide incentives and opportunities for small businesses. The current, government-wide procurement goal is that at least 23% of all government buys should be awarded to small businesses. In addition, Federal contract goals are established for women-owned businesses, small disadvantaged businesses, firms located in HUBZones and service disabled veteran- owned businesses. These government-wide goals, again, which are not always achieved, are 5%, 5%, 3% and 3%, respectively. They are important because Federal agencies have a statutory obligation to reach-out and consider small businesses for procurement opportunities. However, it is up to you to market and match your business products and services to the buying needs of specific government agencies. Goals may open the door – but you must be able to sell your business on performance, price and ability. Slide 6 How the Government Buys (in simple terms) The government applies standardized procedures to buy products and services it needs from suppliers who meet certain qualifications. Contracting officials use procedures outlined in the Federal Acquisition Regulation, commonly known as the FAR (http://www.arnet.gov/far/), to guide government purchases. The primary contracting methods used by the government are: Micro-purchases; Simplified Procedures; Sealed Bidding; Contract Negotiations; and, Consolidated Purchasing. Each of these contracting methods is discussed in the following. Slide 7 Micro-purchases Generally speaking, government purchases of individual items under $3,000.00 are considered micro-purchases. Such government buys do not require competitive bids or quotes and agencies can simply pay using a Government Purchase Card or credit card, without the involvement of a procurement officer. An important point to remember is that micro-purchases, unlike other small government buys under $100,000, are not reserved for small businesses. Slide 8 Simplified Procedures The Federal Acquisition Streamlining Act of 1994 removed many competition restrictions on government purchases under $100,000. Instead of full and open competition, agencies can use simplified procedures for soliciting and evaluating bids up to $100,000. Government agencies, however, are still required to advertise all planned purchases over $25,000 in Federal Business Opportunities or the FBO, the government’s online listing and database of available procurement opportunities. Simplified procedures require fewer administrative details, fewer approval levels, and less documentation. The procedures require all federal purchases above $3,000, but under $100,000, to be reserved for small businesses, an important point. This small business set-aside applies, unless the contracting official can not obtain offers from two or more small firms who are competitive on price, quality and delivery. Slide 9 Sealed Bidding Sealed bidding is how the government buys competitively when its requirements are very specific, clear and complete. An IFB or “Invitation For Bid” is the method used for the sealed bid process. Typically, an IFB includes a description of the product or service to be acquired, instructions for preparing a bid, the conditions for purchase, delivery, payment and other requirements associated with the bid, including a deadline for bid submissions. Each sealed bid is opened in a public setting by a government contracting officer, at the time designated in the invitation. All bids are read aloud and recorded. A contract is then awarded by the agency to the lowest bidder who is determined to be fully responsive to the needs of the government. Government-wide IFBs are available daily for review in the government’s online listing service, Federal Business Opportunities (www.fbo.gov). This electronic service, which is discussed in detail later, also provides direct links to available IFB invitations. Slide 10 Contract Negotiations Contract negotiations are used in many federal procurement actions. This is typically a more complicated process for companies wanting to sell to the government. It is also a method that is more time consuming for buying agencies. This is how it works….. In certain cases, when the value of a government contract exceeds $100,000 and when it necessitates a highly technical product or service, the government may issue a Request for Proposals. In a typical RFP, the government will request a product or service it needs, and solicit proposals from prospective contractors on how they intend to carry out that request, and at what price. Proposals in response to an RFP can be subject to negotiation after they have been submitted. When the government is merely checking into the possibility of acquiring a product or service, it may issue a Request for Quotation (RFQ). A response to an RFQ by a prospective contractor is not considered an offer, and consequently, cannot be accepted by the government to form a binding contract. Government-wide RFPs and RFQs are also available daily for review in the FBO. Slide 11 Consolidated Purchasing Programs Most government agencies have common purchasing needs. Sometimes the government can realize economies of scale by centralizing the purchasing of certain types of products or services. This is called consolidated purchasing and multiple award, acquisition vehicles are typically used. The most common multiple award schedules are GSA Schedules or Government Wide Acquisition Contracts, called G-WACs. These centralized buying vehicles are negotiated by the government with awards to many potential vendors and used by multiple agencies buying similar goods and services. Slide 12 The Rules If you want to participate in the Federal procurement arena, you have to know the rules. Understanding the government’s procurement rules is critical to your success as a government contractor. The FAR is the roadmap for doing business with the government. It outlines all of the rules. It is a comprehensive guide indexed by topic. Do not be intimidated by its size or apparent complexity. It is an excellent resource tool. The most common FAR sections used by small business are: Subpart 8.4 – Federal Supply Schedules Part 13 – Simplified Acquisitions Part 15 – Contracting by Negotiation Part 19 – Small Business Programs Check out the FAR after you complete this course. You can access it by clicking on the hyperlink. Remember, it’s a tool use it when you need it. (http://www.arnet.gov/far/) Slide 13 Size Does Matter As a small business, certain government programs may apply to you. The question then becomes, what is a small business, or more specifically, is your firm a small business? Over the years SBA has established and revised numerical definitions for all for-profit industries, and this numerical definition is called a "size standard." It is almost always stated either as the number of employees or average annual receipts of a business concern. In addition to establishing eligibility for SBA programs, all federal agencies must apply SBA's size standards for contracts to be awarded to small firms. When you complete this course, come back to this section and click on the referenced hyperlinks to determine your small business size eligibility and to learn more about size standards. http://www.sba.gov/contractingopportunities/officials/size/index.html http://www.sba.gov/idc/groups/public/documents/sba_homepage/guide_to_size_standards.pdf Slide 14 How to Sell to the Federal Government Selling to the government is not as big of a mystery as you might think. There are several fundamental steps you should follow. They include: • Define your business and products using a DUNS number and NAICS code. • Register your firm in the CCR. • Market directly to agencies. • And, use established procurement vehicles. Each of these steps is described in the following. Slide15 Define Your Products & Services You need to make it easy for the government to identify the products and services you sell, as well as to uniquely identify your business. Government agencies use the North American Industry Classification System, more commonly referred to as a NAICS code, to identify products and services by industry type. You can find the NAICS codes for your products and services by clicking on the referenced hyperlink. It is also important to note that you can use your NAICS code or codes to conduct online searches at the Websites of numerous federal agencies to learn what they are buying. http://www.census.gov/epcd/naics02/ To participate in contract opportunities within the Department of Defense (DOD), you will also need to know your Federal Supply Group or Class code. Again, this can be easily obtained by clicking on the FSG hyperlink. http://www.dlis.dla.mil/hcfsch21.asp A NAICS code, or codes, identifies the products and services your company supplies. It does not uniquely identify your business. The Federal government uses D-U-N-S numbers, provided by Dun & Bradstreet, to identify prospective vendors. You can obtain a D-U-N-S number at no cost to you by clicking on the hyperlink or by calling 866 705- 5711. Slide 16 Register in the CCR The Central Contractor Registration, more commonly known as the CCR, is the primary source for agencies to learn about prospective vendors. The CCR is a government-maintained database of companies wanting to do business with the government. This database is a marketing tool for businesses and a searchable list of prospective vendors for the government. We have all heard the expression, "You got to play to win." Well, to succeed in government contracting, you have to register to participate. Registering your business in the CCR is a significant and primary step to sell to the government. At a convenient time, after you complete this training program, click on the hyperlink or icon to learn more about the CCR and, if you are ready, register your business. https://www.bpn.gov/ccr/default.aspx Slide 17 Market Directly to Agencies Aside from some of the differences we have already talked about, selling to the government is not that much different than selling in the private sector. It all comes down to marketing. Learn what agencies or prime contractors have a need for and clearly demonstrate how you can add value and why they should buy from you. In addition, be active. Participate in procurement related conferences, activities and match-making events. Use these activities to become known and to be a “player.” Slide 18 Procurement Vehicles There is merit to hitching your wagon to an existing wagon-train. OK, so maybe that’s not the best analogy. But, there is merit to participating in a consolidated agreement where multiple vendors are pre-approved for prospective contract awards from multiple agencies. Earlier in the course we talked about consolidated purchasing programs. Under such programs, the Federal government tries to benefit from economies of scale and make it easier for vendors to sell to the government by establishing Multiple Award Schedules. These schedules are often referred to as procurement vehicles. A prominent example of this type of contracting is the GSA Schedule. As such, GSA negotiates prices and terms with prospective vendors and enters into an agreement. Under the agreement, participating government agencies can purchase products and services from a schedule of prospective vendors, according to prices and terms already agreed to by the vendors. Another procurement vehicle example is Government Wide Procurement Contracts or G- WACs. Procurement vehicles can be valuable tools. As you continue your journey into the government contracting space, learn as much as you can about procurement vehicles and how they could benefit your business. Use the referenced hyperlinks to learn more about GSA Schedules and available G-WACs. http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=8106&contentType=GSA_ OVERVIEW http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=16146&contentType=GSA_OVERVIEW https://www.fbo.gov/index?cck=1&au=&ck= Slide 19 Find Contract Opportunities (FBO) It is impossible to sell your products or services to the government, if you don’t know which agencies are buying, what their needs are and when they need it. To market or outreach contract opportunities to the public, the federal government operates a robust, online service called Federal Business Opportunities, but more commonly known as FBO or FedBizOpps. This single entry, government-wide Website profiles available business opportunities and is one of the most powerful tools available to help you become successful in government contracting. The online tool identifies contract opportunities over $25,000.00. At your convenience, take a few minutes to visit the FBO Website and familiarize yourself with how it operates, what it displays and why its important. Hyperlinks to the FBO site are available at multiple locations throughout this course. You can also use the hyperlinks on this slide to directly access the FBO, as well as important training information about how to use the FBO. https://www.fbo.gov/index?cck=1&au=&ck= https://www.fbo.gov/?static=vids&s=getstart&mode=list&tab=list&tabmode=list Slide 20 Find Recovery Contract Opportunities The FBO is an excellent tool to find contract opportunities. But, it gets better and more refined. To make it easier for potential contractors to find recovery-based contract opportunities, FBO has created a new dimension within the site to specifically find and review recovery-based contract opportunities. Click on the icon within the slide to access the recovery opportunities section of the FBO. https://www.fbo.gov/index?s=opportunity&tab=searchresults&mode=list&_filt=rec_na Slide 21 Find Subcontracting Opportunities An alternative to seeking prime contracts is to explore subcontracting opportunities. Subcontracting with a prime contractor can be a profitable experience as well as a growth opportunity for a business. If, after assessing the capabilities and capacity of your business, you conclude that you are not ready to bid competitively for prime contracts, consider opportunities available through subcontracting. To help small businesses find opportunities, SBA maintains, SUB-Net, a searchable database of available subcontract opportunities. SBA makes the database available as a small business resource. However, it is up to prime contractors to update SUB-Net with contract opportunities. A hyperlink to SUB-Net is provided for your convenience and future use. http://web.sba.gov/subnet/search/index.cfm Slide 22 Find Recovery Grant Opportunities This tutorial is about contract opportunities. However, because significant recovery- based funds will be made available in the form of government grants, a brief summary and links are made available to help you better understand and access available government grants. A federal grant is an award of financial assistance from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by the US government. Federal grants are not federal assistance or loans to individuals. Twenty six federal agencies offer over 1,000 grant programs annually in various categories. Use the hyperlink here to [ http://www.grants.gov ] to learn more about federal grants and click on the icon to find specific grant opportunities as a result of the Recovery Act. http://www07.grants.gov/search/search.do;jsessionid=?mode=CATSEARCH&fundActivity=RA Slide 23 Prepare for the Future Things never stay the same. Successful companies plan for the future. Five years from now the Department of the Navy will still be buying ships and the VA will still be buying laundry, food and other services for veterans. However, the government will continue to buy new and innovative products and services to protect and improve the lives of American citizens. Areas of future growth will likely include: renewable energy; clean and smart grid technology; life sciences; nanotechnology; broadband services; high-definition education programs; and, many others. Consider future needs as you evolve your company vision. Slide 24 Explore Industry Clusters Many economic development organizations now realize that significant economic success can come from key industry clusters in specific regions. An industry cluster – such as robotics in Detroit, life-sciences in San Diego or shipbuilding in Maine – consists of a lead product or industry within a region. Individual companies, within the cluster feed on each other and succeed or fail, not just because of their own efforts, but in part because of the overall success of the cluster in the region. This multiplier effect is due to inter-regional networks, robust collaboration, regional government and academic support and expanded marketing. All of these factors working together draw national attention and customers to a hub of clustered knowledge, innovation and production. SBA is a strong supporter of industry clusters – because they are an important ingredient in economic development. Check with your local SBA or economic development office to learn more about clusters in your area. Slide 25 SBA Certification Programs SBA administers two certification programs, designed to assist specific market groups in the government contracting space. These programs include the HUBZone program and the 8(a) Business Development Program. Learn more about each of these programs by clicking on the hyperlinks. http://www.sba.gov/hubzone/ http://www.sba.gov/aboutsba/sbaprograms/8abd/index.html Slide 26 Tipping Point There is a reason why some people are more successful than others. The same can be said about small businesses in the government contracting space. Some firms are clearly more successful. There are many reasons for this. However, several things can be done to tip the odds in your favor. Such actions include: Prepare a clear business vision and strategy that describes how you will engage your business in the government contracting space. Develop a crisp and informative profile describing your business and products for the CCR. Don’t be shy about getting experienced help to prepare your CCR profile. Become an expert in understanding how to use and find contract opportunities in the FBO. This is important. Research and Identify agencies that buy what you sell. Work with procurement experts to understand how to respond appropriately to government acquisition requests. Market aggressively to targeted agencies. Network – attend procurement conferences and matchmaking events and talk with government buyers and experts in the contracting field. And finally, learn from others. This is critical. Actively seek the guidance, experience and wisdom of experts in the contracting field. Slide 27 Have a Question? This course has covered a great deal of material. And, there is much to learn and understand about government contracting. If you have questions about the federal market place, government contracting methods, finding contract opportunities or other questions about winning recovery and other federal contracts, contact SBA or one of our resource partners. We will help you. If we do not have the answer to your specific question, we will direct you to a resource that does. Use the 1-800 number (1 800 827-5722) or referenced hyperlinks to contact us directly. answerdesk@sba.gov (e-mail) http://www.score.org/index.html http://www.sba.gov/localresources/index.html http://www.sba.gov/aboutsba/sbaprograms/sbdc/sbdclocator/SBDC_LOCATOR.html Slide 28 Additional Assistance Many resources are available to assist you. The following resources can help you build a foundation in government contracting. • Procurement Technical Assistance Centers, located at various locations around the country, help businesses understand and succeed in government contracting markets. http://www.dla.mil/db/procurem.htm • SBA has over 60 district offices located throughout the country to help you start and grow your business. http://www.sba.gov/localresources/index.html • There are more than 1,000 Small Business Development Center locations around the country. SBDC’s provide management assistance to current and prospective small business owners. http://www.sba.gov/aboutsba/sbaprograms/sbdc/sbdclocator/SBDC_LOCATOR.html • SCORE is a powerful source of free and confidential small business advice to help build your business. More than 10,000 SCORE volunteers are available to share their wisdom and lessons learned in business. http://www.score.org/index.html • The Small Business Training Network is a powerful virtual campus. http://www.sba.gov/services/training/onlinecourses/index.html • And finally, Women’s Business Centers assist women in achieving their dreams by helping them to start and run successful businesses. http://www.sba.gov/aboutsba/sbaprograms/onlinewbc/index.html Click on these resources to learn more and access their assistance. Slide 29 Other Resources Central Contractor Registration www.ccr.gov Federal Business Opportunities www.fbo.gov Acquisition Central (excellent general resource) www.arnet.gov Federal Agency Procurement Forecasts http://acquisition.gov/comp/procurement_forecasts/index.html Procurement Technical Assistance Centers www.dla.mil/db/procurem.htm Federal Acquisition Regulation www.far.gov Slide 30 Other Resources SBA – Office of Government Contracting & Business Development http://www.sba.gov/aboutsba/sbaprograms/gcbd/index.html Government-wide – Recovery www.recovery.gov Recovery Opportunities http://www.recovery.gov/?q=content/recovery-act- opportunities Recovery – SBA Programs http://www.sba.gov/recovery/index.html SBA Online Briefing – Recovery Act http://training.sba.gov:8000/recoverybill Slide 31 Conclusion Much material has been presented and many aspects of the contracting process have been reviewed. Remember, this is not the type of program you review once and put aside. Rather, it’s a resource guide that can be referenced as needed. Thank you for your participation in this course.