Outsider Perception: Federal agencies order products and services only from their favored vendors.

Reality: People buy -- not agencies -- and favored vendors have to sell to government buyers just as any other company hoping to do business with the federal government.

Lesson: In the federal market, products and services are sold by people to people. You must sell an end user first and then close the sale within the government's purchasing rules.

Background:

Contrary to popular belief, people buy in the federal market, not agencies. The best way to make a federal sale is to contact a buyer through a direct sales call. Making direct sales in the federal market can be challenging, just as it is with your commercial customers. Yet the dollars are there if you make a determination to go after them. Don't let your inexperience in the market deter you from going forward.

The primary difference with the federal market is that it is critical that you have a way to close the sale. And, of course, it is more difficult to find the end users who buy what you sell because you are new to the market. Federal end users, such as human resource program managers, engineers, or facility managers, make most purchasing decisions. As the term implies, the end user is the person who will actually use the service or product bought. Services and complex products and solutions must be sold to the end user because this person is the one who determines if the service or product meets their needs and solves their problem.

Although rules and regulations often tie a government buyer's hands, they don't turn the buyer into a robot. Federal buyers are people with the same general motivations and inclinations we all have, rules or no rules. Federal end users buy from vendors they know and trust. The government employee's success and future promotions depend on the value of the products and services they buy and, because of that, they want to be assured that their vendors will perform well.

It's not just about getting the best deal for the taxpayer. Although certainly a factor, "taxpayer protection" is often a fuzzy, nebulous concept. The reality is that the federal buyer wants to get the deal that works best for him and his superiors. From a federal buyer's perspective, a good deal is one in which risk is minimized.

Almost all newcomers to the federal market make the mistake of thinking that a sales opportunity arises when a request for a proposal or bid is published. In truth by the time a bid is published, the sale has probably already been made. Successful vendors have long-standing relationships with the end users and contracting officers with whom they work and, in many cases; help identify problems and solutions before any thought of issuing a contract has arisen.

How many vendors will be selling the same opportunity? It depends on both the size and type of opportunity. The level of competition increases proportionately with the size (in terms of dollars) of the contract to be awarded. Some vendors will have the opportunity on their wish list but will burn out in the proposal-writing phase. Others may want to bid but simply haven't laid enough groundwork to be serious contenders. Others will be dead serious, focused, have a relationship with the end user and the willingness to spend the time and money it takes to win a bid opportunity. The amount of competition also depends on the risk perceived by the end user. The question to be addressed is whether the federal officials involved believe there is a practical and economical solution to their problem. The more uncertainty, the more likely it is that the procurement will be competitive.

Installment Series:

Installment 1: The Best Offense is a Good Defense
Installment 2: Make the World's Biggest Customer Your Own
Installment 3: Market Research in the Federal Sector
Installment 4: Become an Insider in the Federal Market
Installment 5: Competition and Price Sensitivity in the Federal Market
Installment 6: Are Federal Bids Wired?
Installment 7: Fundamentals of Federal Contracting
Installment 8: Making a Federal Sale
Installment 9: Closing a Federal Sale
Installment 10: Start with the Credit Card and Quick Buy Markets for Smaller Transactions
Installment 11: Consider Starting as a Subcontractor to a Prime
Installment 12: Selling Directly to Prime Contractors
Installment 13: Pre-approved Government Price Lists
Installment 14: Getting a Pre-approved Federal Price List for Your Company
Installment 15: Small Business Preference Programs
Installment 16: Distinguishing Messages Win in the Federal Market
Installment 17: Selling to Federal Agencies Located in Your Backyard
Installment 18: Getting Started in Federal Sales
Installment 19: Don't Get Caught Up in Red Tape
Installment 20: Steps to Take After Winning Your First Federal Contract 
Installment 21: Learn How to Write Federal Proposals
Installment 22: Prosper in the Federal Market

Fedmarket has been helping companies win government business since 1995. We have been featured in the Wall Street Journal, the Washington Post, and other trade publications. Our customer testimonials speak to our competence and expertise in helping customers win federal business. We have been singled out by public and private organizations -- including the Small Business Administration and federally-funded Procurement Technical Assistance Centers -- as the most comprehensive government contracting resource in the industry. Our web site's free content includes informative newsletters on GSA Schedules, Proposal Writing and Federal Business Development.

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