Newcomers to Federal Contracting
The following is an excerpt from Fedmarket's new eBook "Newcomers to the Federal Market: How to Penetrate the Glass Wall." All attendees of the upcoming training session Webinar: Newcomers Break Through the Glass Wall will receive a complimentary copy. The eBook is not sold separately.
Solving the Dilemma of Companies New the Federal Market
Newcomers to the federal market usually encounter a glass wall of sales resistance caused by federal buyers reluctance to take a risk with new companies. Buyers are not biased against newcomers. Rather, the federal bureaucracy discourages risk taking.
The glass wall is tough to penetrate for newcomers because they usually have strong commercial sales relationships and weak federal relationships.
Many newcomers are reluctant to sell in the market because of the mysterious tangle of red tape involved. Newcomers shouldn't worry about red tape; untangling it just takes patience. The glass wall is the real barrier to entry and it can be penetrated with ingenuity, time, and sales dollars.
Breaking Through the Glass Wall
Newcomers to the federal market have to use one or more of three channels to break through the glass wall of sales resistance.
- Sell directly to federal buyer (products and services)
- Use a federal product reseller (products only)
- Sell subcontracts to federal prime contracts (primarily services)
How Limited Competition Affects Newcomers
The federal government limits competition for contracts purposely through a carefully crafted set of purchasing rules. Open competition to all is far too expensive and takes much too long.
Federal purchasing rules allow:
- Sole source credit card buys for orders under $ 3,000.
- Reduced paperwork and less competition for small purchases.
- More efficient purchases made with a limited number of pre-qualified companies under Multiple Award Contracts (MACS).
Multiple Award Contracts (MACs) and Newcomers
Use of Multiple Award Contracts (MACs) to buy products and services is gradually dominating the federal market. Federal contracting staffs are overloaded so MACs are becoming the purchasing method of choice. Speed and efficiency does not necessarily result in lower prices so superior pricing is often sacrificed for efficiency.
