In a previous installment we discussed the need for direct sales and using best value to win a federal contract. Once you make a federal sale, you can use your company's stellar performance on a federal project to leverage more sales. Federal contractors working on-site at a federal facility are essentially getting paid to sell to agency customers and to generate profit at the same time. Their billable staff sits with the customer every day and, in most cases, gains invaluable intelligence about that customer. Their on-site staff has the opportunity to learn everything there is to know about the customer, the customer's problems, possible fixes, the agency's budget, the agency's procurement plans and the like. It's all perfectly legal because it is all public information. In this instance, the insider just has much easier access to it.

More importantly, a contractor's on-site personnel establish friendships and strong relationships with federal customers by just doing their job. We have repeatedly stressed that establishing such relationships is critical to success in the federal market and the on-site contractor gets paid to do it. If you were the customer, to whom would you turn if you needed help? You would turn to the people with whom you are working every day, people you know and trust.

The federal government doesn't really have a practical way of eliminating the inherent insider edge. It could prohibit the incumbent contractor from re-bidding on their existing contracts but this would be disruptive, expensive, and not in the taxpayers' best interests. Paradoxically, information technology and consulting companies paid to write the specifications for a federal bid are prohibited from bidding on the procurement, even though they are likely to have the most in-depth understanding of both the problem and the solution.

This article is an excerpt from the new book "Rolling the Dice in DC". The book is written for managers and sales people and describes the day-to-day dogfight of competing and winning in the federal market. Read this book if you want to know the good, bad, and the ugly of the federal market, what it takes to enter the market, and the potential returns.