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Our last post about “How does the US Government use Credit Cards?” was an basic introduction to give you an idea of the amounts of money the government has traditionally spent using traditional “Level-1” GSA SmartPay charge cards to pay contractors.

This post will discuss the fundamental changes taking place, which will soon be mandated, that your company should prepare for.  Contractors that want to remain successful must adopt the most efficient and cost-effective GSA-complainant technologies available.

The GSA SmartPay™ program is 23 years old (started in 1989 as the IMPAC program) and accounts for about $30 billion annually in transactions. Approximately $20 billion of that is with the small purchase card.

The SmartPay program saves the government money by avoiding paper-based procurement; it streamlines how front-line managers can access products and services; and the card providers (banks) rebate the government a percentage on the amount purchased. It makes the procurement easier for the federal cardholder and the vendor, a truly win-win scenario.As the SmartPay contract did not mandate Level-3 processing, GSA has added Level-3 processing as a requirement for some of the contracts recently awarded, especially the Strategic Sourcing BPAs on GSA Schedule. Further, SmartPay training programs for Federal cardholders emphasize that buyers should look for Level-3 processing from the vendors they purchase from.

Level-3 provides a more secure online purchase for both buyers and vendors, and it also provides a lower processing fee for the vendor. This makes the procurement more secure for the federal cardholder and the vendor, another truly win-win scenario. Level-3 will become a requirement for SmartPay, so get ahead of the curve. Get Level-3 compliant.

When it comes to accepting government purchasing cards, it’s time to leave the 20th century behind. 21st century technology is required to keep businesses both competitive and compliant with ever increasing regulations designed to reduce fraud.

What is Level-1, Level-2 and Level-3 processing?

Whether you are a consumer buying a new television or a salesperson taking a client out to lunch, the ability to use a credit card to pay is a convenient option. Once your card is swiped, certain information is processed and verified in order to accept payment and complete the purchase. Depending on the type of transaction, this data could be very basic or extremely detailed.  Transactions made through Level 3 processing require significantly more data than those processed at Level 1 or Level 2.

Who Uses Level 1 and 2 Processing:
Almost every business that accepts credit cards uses one of the first two levels of processing. Together, these two types of processing account for most of the business-to-consumer transactions that take place every day.

Levels 1 and 2 Processing:
The different levels of transaction determine the amount and type of information that is passed through the credit card processing network. Level 1 transactions are usually made by consumers with their personal credit cards, thus the information required to accept payment is basic: supplier name, transaction amount and date. Level 2 transactions require additional fields of information, such as sales tax amount and customer codes, and are often made with corporate purchase cards from a U.S. bank.

Who Uses Level 3 Processing:
Level 3 processing involves sending up to 12 fields of detailed data through the credit card processing network, including quantities, product codes and product descriptions. Such specific transaction information is mainly used for business-to-business, corporate and government purchases, providing business the ability to control and monitor purchases made on the company credit card.

What are the benefits of Level 3 processing?

With the additional fields required to qualify for Level 3 processing, businesses can monitor what kind of purchases are made on the company credit card, as well as how much is spent and where items are being purchased. Level 3 credit cards can also include restrictions, limiting the types of business at which an employee can make purchases and eliminating any inappropriate spending that might occur using the company card. Level 3 processing capabilities come with a lower processing rate than Levels 1 and 2, due to the amount of information that must be provided at the point of transaction.

  • Government purchasing cards can be processed with the same level of detail normally associated with an itemized invoice. This is known as Level 3 line-item transaction data.
  • When Level 3 technology is in place, a merchant can submit electronically to a government buyer complete transaction detail. This can automatically be entered into its accounting system and reviewed each day, thus providing for greater financial accountability.
  • To encourage merchant participation and support of purchasing card programs, Visa and MasterCard have created special interchange rates to reduce a merchant’s transaction costs whenever Level 3 line-item details is transmitted with the financial settlement.
  • In providing Level 3 data, a government contractor may substantially reduce their credit card processing fees – sometimes by up to 40%. This savings is available for any size purchasing card ticket. However, this savings can be further increased for contractors that process large tickets, by enrolling in the special “large ticket” program for the GSA SmartPay program.
  • Up until last year, only large ticket Visa transactions were eligible for the special reduced interchange rates. This is one reason why the great majority of government contractors have remained unaware of the tremendous savings they are missing in not having a merchant account with Level 3 technology.
  • Virtual terminal technology is now available that makes processing a Level 3 transaction much simpler and faster than in the past.
  • Some of the features associated with this new technology include the ability to do recurring billing; accept payment by electronic check; a feature called Secure Vault which stores cardholder data securely; automated online invoicing; shopping cart integration; and integration with a merchant’s accounting system.
  • The detailed real-time reporting tools available with the virtual terminal are especially useful for businesses that want to be able to closely monitor their transaction activity.
  • Visa and MasterCard have formulated regulations designed to reduce fraud.  Many businesses are not in compliance with these regulations, especially with regard to storage of cardholder data. Processing with the new virtual terminal technology insures that data is securely stored offsite and that the business is in PCI (Payment Card Industry) DSS (Data Security Standard) compliance.
    The lower rates and amount of control and tracking provided makes Level 3 processing an extremely useful credit card processing capability.

What is PCI DSS Compliance?
“PCI DSS” stands for Payment Card Industry (PCI) Data Security Standard (DSS). It was developed by the major credit card companies (VISA, MasterCard, Discover, American Express and JCB) in 2004 as a guideline to help organizations that process card payments prevent credit card fraud, hacking, and various other types of card security breaches. A company processing, storing, or transmitting card numbers must be PCI DSS compliant or they risk losing the ability to process credit card payments.

What if I don’t comply?
These new card data security standards come with serious consequences. Failure to comply with PCI-DSS requirements can result in stiff contractual penalties or sanctions from members of the payment card industry. These include:

  • Fines of $500,000 per data security incident
  • Fines of $50,000 per day for non-compliance with published standards
  • Liability for all fraud losses incurred from compromised account numbers
  • Liability for the cost of re-issuing cards associated with the compromise
  • Suspension of merchant accounts


What does Level-3 processing mean to my business?
GSA recommendations are moving in the direction of a Level-3 mandate.

There are two major objectives that government agencies have when it comes to budgetary concerns and transparency issues:

(1) Obtaining the lowest price possible from suppliers and (2) having the most detailed information returned from merchants when making purchases with the GSA SmartPay purchase card. These objectives can be met through “Level 3 Processing”. The increased desire for “Level 3 Processing” was evidenced in last year’s report on Point-Of-Sale Discounts for GSA SmartPay Cards where one of the main objectives listed was: “Introduce Level 3 Data as the reporting source to the Federal Strategic Sourcing Initiative (FSSI)”.

As referenced in the Value Propositions section of the report, Master Card and Visa have created special rates to support Purchase Card programs like GSA SmartPay by reducing the merchant transaction costs (interchange) if Level-3 line item detail information is transmitted with the card payment file. By providing Level-3 data, a supplier may reduce their credit card processing fees – often by 30% to 40%. In addition, the GSA Smartpay website states: Merchants that provide Level 3 transaction data are more attractive to Government agencies because the data enables agencies to keep track of their purchases more accurately.

Thus, government agencies are strongly encouraged to take into consideration whether a company can provide Level-3 line item detail when they select a supplier. With Level 3 data, agencies get a two-for-one: (1) lower processing costs that the supplier can pass on to the agencies as lower prices; (2) more detailed information on the purchases made.

Down the road, there may be even more incentive to look for Level 3-ready suppliers. A Senate committee has just approved the Government Charge Card Abuse Prevention Act.  This act will require federal agencies to put new safeguards and controls on government charge cards used by federal employees. Among these would be the utilization of effective systems, techniques, and technologies to prevent or catch fraudulent purchases. The bill will require penalties for violations.

Level 3 line item detail includes such data as item description, item quantity, item unit of measure, and item freight amount. Requiring this level of detail virtually insures that only authorized purchases will occur, significantly cutting down on fraud and abuse.

Federal employees who have control over their choice of suppliers are well advised to start asking them if they can provide Level-3 line item detail. Agencies will then be in the best position to garner the lowest prices, keep track of purchases more accurately, and get a jump on regulations that may ultimately require that they deal only with Level 3-ready suppliers.

Processing GSA SmartPay cards requires a more sophisticated technology platform to capture what Visa and MasterCard call Level 3 data. Level 3 data will allow the GSA SmartPay card to meet the Visa and MasterCard Interchange requirements and get lower rates associated with government purchasing cards.

GSA Schedule holders should also be aware that when the appropriate information is included in a Level 3 purchase, they are rewarded with lower processing rates which can be as much as 1.00%, if they are using our GSA-approved strategic partner as a provider.

In summary, GSA is moving toward mandating GSA Schedule holders to become Level-3 compliant.  Also, incorporating a Level 3 technology system can greatly simplify workflow and operations for the government contractor, while reducing their costs substantially, even to the point of offsetting the Industrial Funding Fee (IFF) or more and meet all PCI DSS Compliance regulations.

Our Federal Marketing Plan will not only help companies effectively market their goods and services to the right agency contracting office location, we will work hand-in-glove with our strategic partner to support your wish to achieve Level-3 transaction compliance.

Your Federal Marketing Plan will be an unique, competitive and customized resultants-driven solution for your company to make effective and successful communication to profitably market your products/services to the federal government.

We work with you as a partner and encourage your feedback during every step; from goal setting, through methods selection, to the final reports and marketing plan. We are effective and comfortable working with business owners, senior executives, marketing departments, non-profit committees, advertising, public relations and marketing firms or any other stakeholder in the project/company.

For a free, no-obligation consultation on how FCIS can help your company become Level-3 compliant, call us at (972) 843-1265. Or, email us at info@fedcontractintel.com

Additional Information:

  • The Federal Strategic Sourcing Initiative (http://www.gsa.gov/portal/content/112561), requiring that participants have the capability to capture and provide Level-3 data, has been initiated for the following business sectors:  Office Supply; Print Management; Wireless Telecommunications; Domestic Delivery Services.
  • Government entities, including the U.S. Army, are requiring that contractors be Level-3 compliant, even stipulating that contractors document this compliance before agreeing to do business with the companies.
  • Congress is moving toward passage of the Government Charge Card Abuse Prevention Act, requiring federal agencies to put new safeguards and controls on government charge cards. Requiring Level-3 line-item detail will virtually insure that only authorized government purchases will occur, significantly reducing fraud and abuse.
  • Supplier that provide Level-3 data may reduce their credit card processing fees, often by 30%- 40%. (www.gsa.gov/graphics/fas/PoSTDataTechnicalInfo.pdf).  Lowering contractor expense, in turn, fulfills GSA’s mission of lower government costs for SmartPay purchases.

The federal government reports that purchases under $2500 only comprised of 2% of the overall government spending, but did account for 85% all purchases. As the administrative costs of these small purchases often exceeded the actual dollar spend, the use of procurement cards increased in many government departments. One government agency, the Department of Commerce, estimated that the use of procurement cards saved them over $22 million per year on administrative costs and the reduction in purchasing processing time. The use of the cards has allowed purchasing departments to concentrate its efforts into the 15% of the total procurement spend that accounts for 98% of the total expenditure.  The Visa Purchase Card is the most widely procurement card in the Federal government.  Government financial reports indicate that in FY10, approximately 98.9M transactions were made and $30.2B were charged using the GSA SmartPay charge cards, creating $325.9M in refunds.

There are currently over 350 agencies/organizations participating in the program spending $30 billion annually, through 100 million transactions on over three million cards. The FY 2010 Procurement by credit card report showed the following:

 

 Charge Card Purchases                                                                         $
Fleet Cardholders

$632,537

Fleet Spend

$1,796,269,682

Fleet Transactions

$27,712,679

Purchase Cardholders

$256,978

Purchase Spend

$19,170,837,510

Purchase Transactions

$22,127,431

Travel Cardholders

$2,248,700

Travel Spend

$9,530,821,611

Travel Transactions

$49,984,737

Government contractors should able to accept credit card for payment and identify which agency contracting offices uses them. The Federal Marketing Plan will help companies market to those target markets.

Federal Contract Intelligence Service is a data mining company that specializes in tracking current and historical United States Government (USG) procurement statistics. We provide marketing list/reports to companies that want to do business with the federal government. Our clients use these list/reports to position their companies in front of decision makers before a requirement becomes an open bid solicitation.

Our marketing list/reports are tailored for the company’s products/services and matched with the decision makers within specific targeted agency contracting offices. We use state of the art data mining software and have access to data sets from Data.gov, Federal Procurement Data System, USA Spending and other data provided and updated by the USG. We also use data from fee based subscription services. Please see sample of our reports.

There is updated information regarding the new System for Award Management (SAM). The General Services Administration (GSA) is moving the implementation date from May 29, 2012 to the end of July 2012. The additional sixty days will allow federal agencies to continue preparing their staff, give agencies and commercial system providers even more time to test their data transfer connections, and will ensure SAM contains the critical, documented capabilities users need from the system.

This first phase of SAM will include the capabilities of Central Contractor Registration (CCR)/Federal Agency Registration (FedReg), Online Representations and Certifications Application (ORCA), and the Excluded Parties List System (EPLS). In preparation for the launch, GSA conducted extensive testing internally and in coordination with federal agencies using the data from these systems in their own contracting, grants, finance, and other departments. The testing was very valuable and will focus the efforts of the next sixty days.

SAM will reduce the burden on those seeking to do business with the government. Vendors will be able to log into one system to manage their entity information in one record, with one expiration date, through one streamlined business process. Federal agencies will be able to look in one place for entity pre-award information. Everyone will have fewer passwords to remember and see the benefits of data reuse as information is entered into SAM once and reused throughout the system.

Please see http://www.sam.gov for more information about the system.

The 10th Annual Alliance Texas Small Business Procurement Fair is returning to the Arlington Convention Center!

Gregory will be a speaker for the 8:45a workshop on Capability Statements.  This event has grown in size and depth each year and we are excited about the prospects for this year.

The networking at this event cannot be compared to any other single marketing medium.

TAKE ADVANTAGE OF THE OPPORTUNITIES!

WHY ARE ALLIANCE PROCUREMENT EVENTS UNIQUE?

  • YOU pre-schedule your own meetings…no one does it for you.
  • E-GUIDE: MatchMaking Hosts have access to your company information – NAICS, certifications, website and company description.
  • E-GUIDE: You have access to ALL attendees – not just exhibitors!
  • E-GUIDE is available immediatly upon registration and for 6 months after the event.

Event Information:

Where: Arlington Convention Center
1200 Ballpark Way
Arlington, TX 76011 (map)
Phone: 817-459-5000
Event Hours: 7:30 am to 4:00 pm

Tuesday, June 26, 2012 includes the Trade Show, MatchMaking Meetings, Continental Breakfast, Lunch and workshops.

Early Bird: $150.00 per person through May 25.
Standard Registration: $185.00 per person through May 25
Late Registration: $225.00 per person after June 22.
Exhibitor Booths: $525 thru May 25; $595 after May 25; Government/Non-Profit $325($395 after May 25) (includes 2 attendee registrations.)

Schedule – Alliance Texas 2012

June 26, 2012


7:00 am – 11:30 am EXHIBITOR MOVE-IN
We invite exhibitors to move in and be set up early to take advantage of the morning workshops. Exhibit Hall opens at 11:30.
7:30 am – 12:00 pm ATTENDEE REGISTRATION AND CONTINENTAL BREAKFAST
8:00 am – 8:30 am OPENING REMARKS
Let’s get the day started!
8:45 am – 10:00 am 1. FIRST IMPRESSIONS ARE LASTING IMPRESSIONS
How do you get on a buyer’s radar? Don’t waste the opportunity to have a COMPLETE CCR profile and the best Capability Statement possible. Learn how to put your best foot forward by enhancing your CCR Small Business Profile and the checklist for your two page Capability Brief.
Moderator: Julie Suarez, Procurement Specialist, Contract Opportunities Center (PTAC) El Paso Community College
Speaker: Gregory James, Project Director, Dallas-Fort Worth MBDA Business Center
Speaker: Paul Stone, Procurement Center Representative, US Small Business Administration
8:45 am – 10:00 am 2. PREPARE – PRESENT – PURSUE: WHAT TO DO BEFORE, DURING AND AFTER YOUR MATCHMAKING MEETINGS
Points to ponder: How do you make your matchmaking meetings mutually productive? What is the beneficial use of time and money? Are you passionate and persuasive? How do you convince the “matchmaker” you are the right one to provide goods and/or services to their company or agency? Perspectives from ‘both sides of the table’ will be presented during a lively discussion led by a dynamic duo! They will share “Eleven P’s” to help you at the matchmaking table and guarantee to educate, entertain and empower you as a successful entrepreneur!
Speaker: Velina Willis, HUB Program Coordinator, Tarrant County Purchasing
Speaker: Rachel Snell, HUB Coordinator, Texas Comptroller of Public Accounts
8:45 am – 10:00 am 3. NEW GSA MUTIPLE AWARD SCHEDULE (MAS) REQUIREMENTS
This session will provide you with the detailed requirements for completing your offer to GSA for your offer to the GSA Schedule Solicitation. Learn about the newest requirements such as a digital signature, check list of requirements a vendor must meet before starting the process, training requirements, and detailed requirements that must be sent in your offer. This is a good time to ask questions and make your decisions about getting on “the Schedule”.
Speaker: Willie Heath, CEO, Heath International Enterprises, Inc
10:15 am – 11:30 am 4. WHAT IS THE “411” ON CERTIFICATION (ANOTHER TOOL IN YOUR MARKETING TOOLBOX)?
Learn why, where and how to determine if you want to apply for certification. Presenters will help you make sense of this confusing world of DFW and National Certifications, that can help your business grow. Who are the “players” and how does your business get to the field using the marketing tool called Certification?
Moderator: Emilia Menthe, Brazos Business Strategies
Speaker: Andrew Nash, Director of Operations, D/FW Minority Supplier Development Council
Speaker: Sheena Morgan, Director, North Central Texas Regional Certification Agency
Speaker: Nancy Alvarez-Hernandez, Supervisor, Business Development Speicalist, US Small Business Administration
Speaker: Rachel Snell, HUB Coordinator, Texas Comptroller of Public Accounts
10:15 am – 11:30 am 5. YOUR TARGET MARKET FOR FEDERAL CONTRACTING: Point your arrow at your REAL Target!
Finding your entry point for doing business with the federal government can be overwhelming. Discover where to begin; How to overcome roadblocks; Common challenges such as knowing where to look, adequate resources, narrowing down the playing field. This session will help you with practical strategies THAT WORK for navigating the federal maze!
Speaker: Royalyn Reid, , Consumer and Market Insights LLC
10:15 am – 11:30 am 6. THE POWER OF EMAIL MARKETING
This information-packed seminar will demonstrate how email marketing – the hands-on, low-cost marketing tool – can really help drive business success. Discover how communicating with customers regularly can help a small business stay connected, and generate increased referrals, repeat sales, and unwavering customer loyalty. Build a strong permission-based customer list and get your audience to open, read and act on your email. and use their past results to sharpen their email marketing program as they go along. Learn the latest best practices and proven strategies to get your emails to work for you! Plenty of time to ask questions, share experiences, and network with peers.
Speaker: Dale Berkebile, BRANDWISE/ Inbound Marketer / Brand Strategist, Constant Contact
10:15 am – 11:30 am 7. ALTERNATIVES FOR ACCESS TO CAPITAL… WHAT OPTIONS ARE AVAILABLE TO ADD CASH TO YOUR BUSINESS?
Cash flow is vital to your business. In addition to traditional loans from your bank, there are options that can provide loans to your business for:

  • Operations
  • Payroll
  • Equipment purchases
  • Vehicle purchases
  • Real Estate purchase
  • Real Estate upgrades (improvements to your existing building)
  • Accounts Receivable

Join us for this information session to help your business GROW!
Speaker: Catherine Pena, ACCION Texas
Speaker: Veronica Wallace, Vice President of Business Development, Bridgeport Capital

11:30 am – 4:00 pm EXHIBITS AND LUNCH
1:00 pm – 4:00 pm MATCHMAKING MEETINGS
3:30 pm – 4:00 pm DESSERT AND DOOR PRIZES
Join us for treats and door prizes donated by our participants. Winners MUST BE PRESENT TO WIN!!
ShoWorks, Inc.
1205 N Napa St
Spokane, WA 99202
Voice: (509) 838-8755
Fax: (509) 838-2838
Email: info@showorksinc.com

Step 7 involves considering obtaining an interagency contract vehicles. The most popular contract vehicle is the Federal Supply Schedule (FSS). The major benefit for getting an FSS schedule or any other contract vehicles is that it streamlines the procurement process and the in the case of the FSS, contracting officers only needs telephone quotes to award a federal contract. The companies with contracting vehicles are pre qualified to do business with the government. The company that has an FSS or other interagency contract vehicles has pre-negotiated for their prices, terms and conditions. These contract vehicles are a license to hunt and require a marketing plan to target the agency contracting offices (Download: See Sample Target Agency Contracting Office Report #2) who buy the company’s products and services. A federal marketing plan will ensure the opportunity to get a government contract. (Download: Sample FMP #1).

The Federal Acquisition Regulation (FAR) defines an interagency or multi-agency contract as a task order or delivery-order contract by one agency for use by other agencies to obtain supplies and services, consistent with the Economic Act of 1932. These types of contracts are classified as indefinite order-indefinite delivery contracts. In FY 2004, the Federal Procurement Data Center (FPDS) reported that interagency contract spend was $142 Billion and non-interagency contract spend was $210 Billion. The Congressional Research Service in their report title Interagency Contracting: An overview of Federal Procurement and Appropriations Law states “Interagency contracting can occur under several different statutory authorities, including (1) the Economy Act of 1932; (2) the Information Technology Management Reform Act of 1996, also known as the Clinger-Cohen Act, authorizing government-wide acquisition contracts (GWACs); (3) the Federal Property and Administrative Services Act of 1949, as amended by the Office of Federal Procurement Policy Act of 1974, underlying the Federal Supply Schedules (FSS), also known as the General Services Administration (GSA) Schedules or Multiple Award Schedules (MAS); and (4) the Government Management Reform Act and other authorities creating franchise funds and interagency assisting entities. Unlike multi-agency contracts, GWACs and the FSS, franchise funds and interagency assisting entities are not themselves contracting vehicles, but they play a prominent role in interagency contracting”.

Multi-Agency Contracts, Government Acquisition Contracts (GWACs), GSA schedule, and Enterprise-wide Contract Vehicles are discussed in this document.

Multi-Agency contracts that are governed by the Economy Act require a written Determination and Finding (D&F) document approved by its contracting officer or by an authorized official. The established ordering procedures includes include: a) customer agency submits a requirements package, including necessary funding and fees, to the host agency contracting officer; b) the host agency contracting officer requests price/cost and technical proposals from contractors in the program; c) customer and contracting officer evaluate proposals and make a best value determination; d) the host agency contracting officer awards a task/delivery order to the winning vendor; and e) the order is jointly administered by the host agency contracting officer and the customer agency’s technical managers. The solicitation and evaluation of proposals for task/delivery orders must be consistent with the fair opportunity requirement of FAR 16.505(b)(1).

Government wide Acquisition Contracts (“GWACs”) are a subset of multi-agency contracts. However, unlike non-GWAC multi-agency contracts, they are not subject to the requirements and limitations of the Economy Act. The FAR defines a GWAC as–A task-order or delivery-order contract for information technology established by one agency for Government wide use that is operated— (1) By an executive agent designated by the Office of Management and Budget (2) Under a delegation of procurement authority issued by the General Services Administration (GSA). The total volume of assisted acquisitions by GWAC in FY 2009 was $2.9 Billion.

The General Services Administration (GSA) manages Multiple Award Schedule (MAS) contracts, also known as Federal Supply Schedule (FSS) contracts. Under MAS/FSS including Blanket Purchase Agreements (BPAs), contracts are awarded to multiple companies supplying comparable products and services at pre-negotiated prices, terms and conditions. Federal contracting officers and other authorized users order directly from the company. Contracting officers may conduct set-asides using MAS/FSS contracts.

The ordering procedures for FSS purchases include: a.) Order is within the micro-purchase threshold ($3000) – There is no need to solicit offers from a specific number of Schedule contractors for supplies & services not priced at hourly rates. Agencies are encouraged to distribute orders among eligible contractors. For services priced at hourly rates, there is no need to solicit offers from a specific number of Schedule contractors, but agencies should attempt to distribute orders among eligible contractors; b.) For orders above the mirco-purchase, but threshold but below maximum order threshold-purchase threshold – The order must be placed with the contractor that can provide the best value. Before placing the order, the ordering agency must consider reasonably available information about the goods or services by surveying at least three Schedule contractors. When the order includes brand name specifications, the ordering agency must post a Request for Quotations (RFQ), along with the justification required under 48 C.F.R. § 8.405-6. For services priced at hourly rates – The ordering agency must develop a statement of work (SOW) and provide a Request for Quotations (RFQ), including this SOW and evaluation criteria, to at least three Schedule contractors offering services meeting the agency’s needs, requesting that these contractors submit firm fixed prices to perform the services in the SOW;

For orders above maximum order threshold – The ordering agency must seek a further price reduction from the vendor. Before doing this, agency must review price lists from additional Schedule contractors; seek price reductions from those considered best value; and place the order with the contractor that provides best value. The agency must also document: the contracts considered; the contractor from whom the purchase was made; the goods or services purchased; and the amount paid. For services priced at hourly rates-The ordering agency must provide the RFQ to an “appropriate number” of additional Schedule contractors offering services that could meet the agency needs, with the “appropriate number” being determined by the complexity, scope and value of the requirement, as well as findings from market research. The agency must then seek price reductions from these contractors. . The GSA has prepared a matrix (download: PSC Matrix for Active GSA Schedules and GSA GWACs) containing corresponding NAICS and PSC codes with GSA schedules in order to help companies select the right schedule.

The application process for the MAS/FSS schedule includes an evaluation process completed by Open Ratings for Dunn and Bradstreet. Open Ratings conducts survey of your designated customers. Results (see sample report) from the Open Ratings survey indicate where the company’s performance ratings falls in comparison to rated companies in your SIC/NAICS group. The Open Rating report is a good marketing tool. Many federal purchases are, in fact, orders made against MAS/FSS contracts. As of October 2006, of the 17,862 Schedule contracts, about 81 percent were awarded to small businesses. Small business received 37.6 percent or $13.2 billion of the $35.1 billion As of FY 2010 Active MAS contracts were 19,612 of which 79.75 % were small business. Congress has expanded the use of FSS by authorizing state and local governments to purchase goods and services from it in certain circumstances. Some state governments have created their own version of the FSS. Many companies can prequalify for the state FSS if they have a GSA MAS/FSS.

Enterprise-wide contract vehicles are intra-agency Indefinite Delivery Indefinite Quaintly (IDIQ) established specifically for use by an agency’s departments. The SeaPort-e program administered by Naval Sea Systems Command (NAVSEA) is an example of this type of contract vehicle. SeaPort-e is the Navy’s electronic platform for acquiring support services in 22 functional areas including Engineering, Financial Management, and Program Management.  The Seaport-e contract vehicle has over 1300 companies. The Navy estimates that over $5 Billion worth of contracts will be placed on Seaport-e in FY13.

The benefits of obtaining a contract vehicle are 1) Government contractor is prequalified to do business with government agency; 2) Purchasing process is streamline and 3) In most cases contracting officer only needs three quotes to comply with ordering procedures. A marketing plan that includes list of target agency contracting offices and a call log will position the company to get government contracts without competing in the open market.

Steps 1 & 2 discussed how important it is to know key government websites and register the company in the CCR and ORCA. Steps 3 & 4 discussed the socio economic programs and the importance of NAICS and PSC classifications. In steps 5 & 6, we will discuss how to identify procurement opportunities and understanding the Federal Acquisition Regulations (FAR) used by contracting officers to buy goods and services for the government.

Step 5: Identify current federal procurement opportunities. The following are the key bid notifications websites for government solicitation, request for bids and proposals. The websites are grouped into free and subscription required. The real secret in getting government contracts is to develop relationships with contracting officers and program managers. The first step is to respond to their public bid opportunities. Unsuccessful bidders have three days after the solicitation closes to request a debrief from the contracting officers. It is during the debriefing period that the company starts to develop the relationship for future contract award.

Free:
Federal Business Opportunities (FedBizOps): the designated government-wide point of entry – is the exclusive official source for public access to notices of federal contracting actions over $25,000.

Federal Agency Procurement: Each agency has a list of its solicitation on their websites. It is recommended to look at each one or the target agency.

Subscription fee required:
Bid Match Service: The system will search new opportunities each day, for solicitations that correspond to your profile.  The search includes most federal, state, and many local government websites for open procurement opportunities.

epipeline is the leading online source for federal government contracts opportunity research and government business intelligence.;

http://www.onvia.com/: Onvia tracks, analyzes and reports the spending of more than 89,000 federal, state and local government agencies, giving companies a single source for conducting open, intelligent and efficient business with government.

GOVWin is the single largest source for government contracting information and analysis in the world.

BidNet is a premier provider of government business intelligence, delivering content-rich actionable data to clients across the nation. Tracking government buying and planning at the local, state, and federal level.

Find RFP connects government contractors and government agency buyers. Find RFP is a pioneer in online government purchasing and e-government.

Reed Construction Data can deliver the commercial construction project information you need to get work in these tough times.

Gov Directions can help. This site publishes approximately 96,000 new government bids and request for proposals each month. Test us by registering for a Free Daily Alert.

Government Bid customers obtain direct and instant access to contract awards and advance information about upcoming opportunities at the local, state, and federal levels, aggregated daily from thousands of sites, numerous government publications and public meeting reports, and supplemented and monitored by our team of research experts.

Bid RFP searches all government agencies including states, cities and counties. Our database is updated on a daily basis to include new government procurement sites as soon as they are published.

Bid Data Line searches bid opportunity web sites of Federal, State, County, City governments along with Port Authorities, Universities and other public buying authorities.

Step 6: Familiarize yourself with the government’s contracting procedures. The Federal Acquisition Regulation and Supplemental Procurement Regulation for each agency.

The Federal Acquisition Regulation (FAR) is the principal set of rules in the Federal Acquisition Regulation System. This system consists of sets of regulations issued by agencies of the federal government of the United States to govern what is called the “acquisition process”; this is the process through which the government purchases (“acquires”) goods and services. That process consists of three phases: (1) need recognition and acquisition planning, (2) contract formation, and (3) contract administration. The FAR System regulates the activities of government personnel in carrying out that process. It does not regulate the purchasing activities of private sector firms, except to the extent those parts of it are incorporated into government solicitations and contracts by reference.

The most common questions we hear from entrepreneurs who want to do business with the federal government are, “Do I really need a federal marketing plan? Is writing a federal marketing plan really the best use of my time?” Our answer to these questions is almost always, “Yes.”

In reality, federal marketing plans do take a long time to write, require that you have a tremendous amount of data at your fingertips, depend in part on projections, and often are responsible for creating a long list of research you still need to conduct and other work you need to complete.

But despite all of that, federal marketing plans are one of the most effective tools for the business owner/operator who is starting or growing their business with the federal government.

Here is what we consider the most important reasons for having a federal marketing plan:

• A Federal Marketing Plan is Simply a Must-Have for Some Businesses
• A Federal Marketing Plan Helps You Make Decisions
• A Federal Marketing Plan Can Be a Reality Check
• A Federal Marketing Plan Can Give You New Ideas
• A Federal Marketing Plan Creates an Action Plan

Your company should have a Federal Marketing Plan (FMP) if your company is doing business or planning to do business with the Federal Government. Our FMP helps companies target market their goods and services to the right agency contracting office location after first answering the basic question of does the federal government even buy your company’s products and/or services. Your Federal Marketing Plan will be a unique and customized resultants-driven solution for your company to make effective and successful communication to profitably market your products/services to the federal government.

Because of our ability to make the complex easy to understand; you’ll have the information you need to make effective, successful and measurable direct government marketing decisions. Your FMP will have current data from disparate data sources like government contract histories and other federal data sets that would identify predetermined groups, logical relationships, associations and anticipated behavior patterns that would determine the type of contracts used to purchase your goods or services. With that information you’d be able to create your own unique key performance indicators of marketing success and execute a profit-driven government marketing campaign. In the end, we deliver current and relevant insights – rather than just producing tables and graphs. We analyze the massive $500BN government contract data specifically for our clients’ to target a market in the government. And because everyone uses their results in different ways, we design our reports specifically for each client’s particular needs.

Click here to download our sample Federal Marketing Plan.

We work with you as a partner and encourage your feedback during every step; from goal setting, through methods selection, to the final reports and marketing plan. We are effective and comfortable working with business owners, senior executives, marketing departments, non-profit committees, advertising, public relations and marketing firms or any other stakeholder in the project/company.

Call us at 469-814–8457 x100 for a free initial consultation and assessment. Please have your company’s NAICS and PSC codes available when you call.

Click here to download our sample Federal Marketing Plan.

Interagency contracting has been recognized as one of the fastest growing fields in federal acquisition. In Fiscal Year 2006, the two leading programs, the Federal Supply Schedules Program and the GSA’s Government-wide Acquisition Contracts (“GWACs”) provided over $46 billion of supplies and services to federal agencies (GSA-managed Schedules: $35.1 billion; VA-managed Schedules: projected to be well over $8 billion [FY 2005 sales were $7.9 billion]; GSA GWACs: $3.0 billion). These and other interagency contract vehicles, offered by other federal agencies under GWAC or multi-agency contract authorities, have been gaining increasing popularity due to the ease of use associated with streamlined ordering and the apparent value afforded by volume purchasing. Federal Procurement Data System – Next Generation (“FPDS-NG”), in its first year of reporting the spending under interagency contract vehicles, shows that 40 percent of total fiscal year 2004 obligations, or $142 billion, was spent on these vehicles.

Click here to download Interagency Contracting sample report.

The Code of Federal Regulations title 13 part 124.502 requires a contracting officer to submit a written offer letter to the SBA if he or she intends to award a procurement requirement as an 8(a) contract to an 8(a) Contractor. The Contracting Officer must submit the offer letter to the SBA District Office for competitive 8(a) and sole source requirements. The offering letter must contain a description of the work to be performed, the NAICS code that applies to the principal nature of the requirement, estimated period of performance, the estimated dollar value of the requirement, any special restrictions or geographical limitations, any special capabilities or disciplines needed, the contract type, past contractor performance and contact information, a special statement, name of the specific 8(a) contractor being nominated for the award, bonding requirements, and any other information required in Title 13: 124.502. The key words in the statute are requirement and name of 8(a) contractor.

It is incumbent upon the 8(a) contractor to find the requirement in the agency contracting office and the user department in order to start the offering letter process. It’s important for the 8(a) contractor to market its products and or services to targeted contracting offices and their user management. It about building relationships before the requirement becomes a contract.

Listed below is a breakdown of FY 2010 Procurement by Contract Type for FY 2010.

 

Contract Types

$

Firm Fixed Price

$290,942,402,932

Cost Plus Award Fee

$64,653,623,072

Cost Plus Fixed Fee

$60,925,517,904

Cost Plus Incentive

$27,711,212,775

Fixed Price Incentive

$15,046,523,476

Time and Materials

$21,654,584,121

Labor Hours

$7,202,243,155

Fixed Price with   Economic Price Adjustment

$25,214,987,630

Cost No Fee

$9,575,382,136

Order Dependent (IDV   only)

$500,124,822

Fixed Price Award Fee

$2,653,823,649

 –

$2,483,165,872

Other (none of the   above)

$848,324,646

Combination (two or   more)

$7,470,423,495

Fixed Price Level of   Effort

$1,122,781,663

Fixed Price   Redetermination

$663,609,786

Cost Sharing

$442,409,347

 

 

 

 

NAICS Category   (Description) Total Dollars % Total Dollars
33 (MANUFACTURING (METALS, MACHINERY,   COMPUTER, ELECTRONICS ELECTRICAL TRANSPORTATION EQUIPMENT, FURNITURE,   MISCELLANEOUS)) $164,416,994,509 30.92%
54 (PROFESSIONAL, SCIENTIFIC, AND   TECHNICAL SERVICES) $145,694,534,688 27.40%
23 (CONSTRUCTION) $48,960,503,742 9.21%
56 (ADMINISTRATIVE AND SUPPORT AND WASTE   MANAGEMENT AND REMEDIATION SERVICES) $41,239,483,477 7.76%
42 (WHOLESALE TRADE) $25,238,686,425 4.75%
32 (MANUFACTURING (PAPER, PRINTING,   PETROLEUM, COAL, CHEMICAL, PLASTICS, RUBBER, NONMETALIC MINERAL)) $17,057,710,839 3.21%
52 (FINANCE AND INSURANCE) $14,316,288,368 2.69%
48 (TRANSPORTATION) $13,529,721,542 2.54%
51 (INFORMATION) $12,579,840,589 2.37%
31 (MANUFACTURING (FOOD, TEXTILE,   APPAREL, LEATHER)) $8,590,261,710 1.62%
62 (HEALTH CARE AND SOCIAL ASSISTANCE) $6,459,800,482 1.21%
53 (REAL ESTATE AND RENTAL AND LEASING) $5,988,462,761 1.13%
NO NAICS CATEGORY SPECIFIED $5,779,646,424 1.09%
61 (EDUCATIONAL SERVICES) $5,592,917,103 1.05%
44 (RETAIL TRADE (MOTOR VEHICLE,   FURNITURE, ELECTRONICS, BUILDING MATERIAL, FOOD, HEALTH, GASOLINE, CLOTHING)) $3,972,589,481 0.75%
81 (OTHER SERVICES (EXCEPT PUBLIC   ADMINISTRATION)) $3,363,320,158 0.63%
22 (UTILITIES) $2,838,864,877 0.53%
92 (PUBLIC ADMINISTRATION) $2,321,734,802 0.44%
72 (ACCOMMODATION AND FOOD SERVICES) $1,449,805,219 0.27%
49 (POSTAL SERVICE, COURIER/MESSANGER,   WAREHOUSING) $1,078,190,262 0.20%
11 (AGRICULTURE, FORESTRY, FISHING AND   HUNTING) $444,016,582 0.08%
45 (RETAIL TRADE (SPORTING GOODS GENERAL   MERCHANDISE, MISCELLANEOUS)) $438,471,690 0.08%
21 (MINING) $313,739,993 0.06%
71 (ARTS, ENTERTAINMENT, AND RECREATION) $90,502,612 0.02%
55 (MANAGEMENT OF COMPANIES AND   ENTERPRISES) $2,262,452 0.00%
Total $531,758,350,785 100.00%

The example of a business plan for the federal government is the Federal Marketing Plan (FMP) prepared by the Federal Contract intelligence Service. The FMP describes where in federal contracting a company can find federal contract business opportunities (fedbizopps).

The FMP can be especially good for new companies wanted to do business with the federal government but not knowing where to go or what to do. Government contractors were awarded more than $500 billion in federal contracts by the government last fiscal year. The types of contracts used to award federal contracts including purchase orders, credit cards, delivery orders, blanket purchase agreements, the GSA schedule and other federal contract vehicles. The FMP should spell out how to target a market in the government and especially in the federal government.

The FMP helps companies target market their goods and services to the right agency contracting office location. The FMP should create a path that gets the company in front of contracting officers before a requirement becomes a solicitation for public bidding.

The FMP will answer the following questions:
• Does the federal government buy my company’s products/services?
• WHO is the marketing target in the agency contracting office?
• Is the company ready to do federal contracting?

The FMP includes the following elements:

1. Company Readiness Assessment: a questionnaire designed to help the company asses its own ability to perform successfully on a federal contract. Compliance with the federal contract terms and conditions is very important.
2. Company Capability Statement: a 30 second description about a company’s capabilities.
3. Federal Government Contract Histories for the company’s primary NAICS and PSC codes. The information is provided by the Federal Procurement Data System and other federal data sets from Data.gov. Reports include USG Contract History Total, USG & Totals by Contracting Method, and USG $ Totals by Vendor.
4. GSA Schedule Contract History including SIN totals and other information required by the GSA MAS assessment
5. Current Bid Opportunities by Agency and NAICS.
6. Target Agency Acquisition Team Contact Marketing List: The information includes Contact information on key procurement decision makers, program managers, contracting officers, small business liaison and other persons within all the contracting offices you wish to do business.
7. Call Report: a detail description of telephone marketing activities.

The Federal Marketing Plan is designed to position the company in front of key decision makers before the requirement becomes a federal contract bid opportunity.

Click here to download our sample Federal Marketing Plan.

The use of data mining techniques in USG procurement helps companies identify predetermined groups, logical relationships, associations and anticipated behavior patterns. For example, a company could mine agency procurement data to determine the type of contracts used to purchase their goods or services. This information could be used to determine if the company should get a contract vehicle. The contract vehicles could include GSA Schedules, Government Wide Acquisition Contracts or many other “Interagency Contracts. Please see blog “Interagency Contracting”

  • Identifying logical relationships or contracting preferences. For example, USG contracting data can be mined to identify set aside contracts for socio economic groups and the contracting officers that favor this form of procurement. Small business with this status can market directly to these contracting officers.
  • Identifying associations. For example, USG contracting data can be mined to see if certain contracting vehicles are used more that others to purchase computer hardware
  • Anticipate behavior patterns and trends. For example, a manufacture of military weaponry can mined contract history and correlate with geo political events to plan raw material purchases and production schedules.

 

In addition to the matching of NAICS codes to each GSA schedule, we now have the Product Supply Codes. The PSC is a four diget code that decribes products purchased buy the United States Government. The NAICS is a 2 to 6 diget code that describes an industry. The NAICS is used by the United Nations to track economic statistics world wide. Open the link below to see the codes and GSA schedules.

Download PSC Matrix for Active GSA Schedules and GSA GWACs Report Sample

GSA has matched NAICS codes with their Schedules. It is now much easier to find the right schedule for your company. The GSA Schedule is the most widly used contract vehicle in the United States Government. Many state governments also use these contract vehicles. The addition of a GSA Schedule to the company’s tool box is a very effective way to get federal contracts. In most cases, the contracting officer only needs two telephone quotes to award a contract.

Download a copy of NAICS-FSS Master sample report

Interagency contracting has been recognized as one of the fastest growing fields in federal acquisition. In Fiscal Year 2006, the two leading programs, the Federal Supply Schedules Program and the GSA’s Government-wide Acquisition Contracts (“GWACs”) provided over $46 billion of supplies and services to federal agencies (GSA-managed Schedules: $35.1 billion; VA-managed Schedules: projected to be well over $8 billion [FY 2005 sales were $7.9 billion]; GSA GWACs: $3.0 billion). These and other interagency contract vehicles, offered by other federal agencies under GWAC or multi-agency contract authorities, have been gaining increasing popularity due to the ease of use associated with streamlined ordering and the apparent value afforded by volume purchasing. Federal Procurement Data System – Next Generation (“FPDS-NG”), in its first year of reporting the spending under interagency contract vehicles, shows that 40 percent of total fiscal year 2004 obligations, or $142 billion, was spent on these vehicles.

Click here to download Interagency Contracting sample report.

DoD, GSA, and NASA have adopted as final, with changes, the interim rule amending the Federal Acquisition Regulation (FAR) to implement a section of the Small Business Jobs Act of 2010 that clarifies that there is no order of precedence among the small business socioeconomic contracting programs. Accordingly, this final rule amends the FAR to clarify the existence of socioeconomic parity and that contracting officers may exercise discretion when determining whether an acquisition will be restricted to small businesses participating in the 8(a) Business Development Program (8(a)), Historically Underutilized Business Zones (HUBZone) Program, Service Disabled Veteran-Owned Small Business (SDVOSB) Program, or the Women-Owned Small Business (WOSB)

Click here to download Federal Register/Vol. 77. No. 42/Friday, March 2, 2012/Rules and Regulations

1. Register company in the Central Contractor Registration database.
https://www.bpn.gov/CCR/default.aspx

2. Register company in the Online Representations and Certifications Application (ORCA) database.
https://orca.bpn.gov/

3. Get the company approved for a USG small business certification if applicable.
http://www.sba.gov/content/small-business-certification-0
http://www.vetbiz.gov/

4. Purchase Federal Contract Intelligence Service products that will answer the following questions:
• How much money did the USG spent on purchasing the company’s products/services from other companies?

• Who (agency contracting office) buys my company’s products/services?

• Does the company have a one page Company Capability Statement

5. Hire Federal Contract Intelligence Service to marketing company to targeted federal contracting agencies via the telephone. See Services.

6. Respond to federal business opportunities on FedBizOpps or other bid notification services.
https://www.fbo.gov/

The purpose of this Federal Marketing Plan: Intelligence Gathering seminar is to help participants gather enough infomration about federal procurement that will lead them to be successful in getting contracts from the United States government. The seminar is divided into two sessions with a workbook.

The key objective of the Federal Marketing Plan: Intelligence Gathering seminar is to help participantsobtain federal contracts before they are put on the street for public viewing.

To attend this class you must bring the following information:

  • Must be registered in Central Contractor Registration (CCR)
  • Know your NAICS codes
  • Class Code, Product Supply Class (PSC)

Session one is a review of procurement intelligence sources, methods used to prepare target marketing documents, agency procurement process and a company readiness assessment. Seminar participants will be given office/home work to prepare for session two. The instructor will review the office/homework and make recommendations on improving the office/homework assignment that.

Participants in this seminar will be able to:

  • Answer the following questions: Does the federal government buy my company’s products/services? Which contracting office buys my company’s products/services? Is the company ready to do federal contracting?
  • Interpret the raw data from the Federal Procurement Data Center and other procurement databases.
  • Develop a one page company capability statement. The eletronic “30 second” elevator speech.
  • Develop an Acquisition Team Contact (ATC) database. The ATC contains contact information on key procurement decision makers within targeted contracting offices, program management and agencies.
  • Develop a Warm Leads Report (WLR). This document is a summary of telephone and personal contacts made with individuals in the ATC.
  • Determine the company’s ability to successfully perform a federal contract.
  • Develop a strategic plan to get the company ready and project sales.

Session 1: April 11, 2012

  • Introduction: Federal Procurement Process, Company readiness assessment and accopanying notes, Key websites
  • Procurement Intelligence data gathering methods
  • Target market data preparation
  • Review office/homework assignment

Session 2: April 17, 2012

  • Review office/homework
  • Target market summary
  • Reivew ATC and WLR
  • Company capability statement
  • Score company readiness assessment
  • Strategic Action Plan

Call us at (972) 843 – 1265 or email: info@fedcontractintel.com to register for the classes.