The James Guide to Developing a Federal Marketing Plan is available for purchase at http://www.amazon.com/dp/B0094K9VBQ
The James Guide to Developing a Federal Marketing Plan is available for purchase at http://www.amazon.com/dp/B0094K9VBQ
Federal mentor/protégé programs are designed to encourage approved mentors to provide various forms of business development assistance to approved protégé firms. A mentor firm may be either a large or small business, eligible for award of a Government contract that can provide developmental assistance to enhance the capabilities of protégés to perform as subcontractors. A protégé firm must be: A SB, WOSB, SDB, HUBZone, VOSB, or SDVOSB, Small in the NAICS code for the services or supplies to be provided by the protégé under its subcontract to the mentor; and Eligible for receipt of government contracts.
The purpose of the mentor/protégé relationship is to enhance the capabilities of the protégé and to improve its ability to successfully compete for contracts. There are 13 federal agencies with over 1100 active mentor protégé agreements.
In March 2011, the GAO (http://www.gao.gov/new.items/d11548r.pdf) reported the following number of federal agency mentor protégé programs:
|Agency||Approved Agreements||Agency||Approved Agreements||Agency||Approved Agreements|
|NASA 202-358-2088||12||FAA 202-267-7454||10||DOE 202 586-3835||120|
|GSA 202-208-0257||65||VA||24||Treasury 202 622-8213||58|
|SBA District Office||482||US AID 202 567-4606||6||State 703-875-6881||86|
|EPA 202-447-5280||4||DHS 202-447-5280||220||DOD 800-540-8857||101|
|HHS 301-443-1715||9||DOT||N/A||Navy 202-685-6489||N/A|
|Army 703-693-6113||Air Force 703-696-1103|
Participation in a federal mentor protégé program has the potential to create a win-win for participants to get larger contracts and access to small business set aside market in the federal government. The win-win is created when the protégé’s capability and capacity to perform on federal contracts is enhanced by the affiliation rules, limitations on subcontracting and the mentor’s delivery of developmental assistance. There is no affiliation in the major federal agency mentor protégé programs including FAA, U.S. Treasury, Department of Homeland Security, and the Health and Human Services. The FAA states “A protégé firm may not be considered an affiliate of a mentor firm solely on the basis that the protégé firm is receiving developmental assistance referred to in Section 1.12 under the program. However, affiliation may be found for other reasons in accordance with the SBA general principles of affiliation. The U. S. Treasury says “a protégé firm is not considered an affiliate of a mentor firm solely on the basis that the protégé firm is receiving developmental assistance from such mentor firm under the program”.
The Department of Homeland Security says “A protégé will not be considered an affiliate of a mentor solely on the basis that the protégé has or will receive developmental assistance from the mentor under this program” and The Health and Human Services says “A protégé firm may not be considered an affiliate of a mentor firm solely on the basis that the protégé firm has or will receive developmental assistance from the mentor firm under this program”.
1) In the case of a contract for services (except construction), the concern will perform at least 50 percent of the cost of the contract incurred for personnel with its own employees. (2) In the case of a contract for supplies or products (other than procurement from a non-manufacturer in such supplies or products), the concern will perform at least 50 percent of the cost of manufacturing the supplies or products (not including the costs of materials). (3) In the case of a contract for general construction, the concern will perform at least 15 percent of the cost of the contract with its own employees (not including the costs of materials). (4) In the case of a contract for construction by special trade contractors, the concern will perform at least 25 percent of the cost of the contract with its own employees (not including the cost of materials).
The development assistance includes but is not limited to: 1) Assistance by the mentor’s personnel in (i) General business management, including organizational management, financial management, personnel management, marketing, business development, and overall business planning; (ii) Engineering, environmental and technical matters; and (iii) Any other assistance designed to develop the capabilities of the protégé under the developmental program.(2) Award of subcontracts or other contracts on a noncompetitive basis. (3) Advance payments under such subcontracts in accordance with FAR Subpart 32.4, Advance Payments for Non-Commercial Items. (4) Loans. (5) Investment(s) in the protégé in exchange for an ownership interest in the protégé, not to exceed 10 percent of the total ownership interest. Investments may include, but are not limited to, cash, stock, and contributions in kind. (6) Assistance that the mentor obtains for the protégé from one or more of the following: (i) Small Business Development Centers established pursuant to Section 21 of the Small Business Act (15 U.S.C. 648).(ii) Entities providing procurement technical assistance pursuant to 10 U.S.C. Chapter 142 (Procurement Technical Assistance Centers).(iii) Historically Black Colleges and Universities.(iv) Minority institutions of higher education.
American Express Open found in their survey of 1,508 small businesses that the most significant economic benefits may come from participation in a formal mentor-protégé program. While few active small business contractors have pursued entering such programs, those who have are investing more time and money seeking Federal contracts and are reaping the reward in greater efficiency and higher sales, profitability and employment – reinforcing the adage that it takes money to make money.
Participation in a federal mentor protégé program can increase the mentor and protégé’s contract sales and company profitability. The absence of no affiliation, limits on subcontracting and the developmental assistance including contract financing create the win win environment. The mentor helps the protégé get contracts and the protégé can sub some of the contract to the mentor.
Explore teaming arrangements.
Teaming arrangements are a great way for an experienced business to help an non-experience business learn how to perform successfully on a federal contract. Federal Acquisition Regulation (FAR) FAR 9.601defines contractor team arrangements as follows: “Two or more companies form a partnership or joint venture to act as a potential prime contractor;” or “A potential prime contractor agrees with one or more other companies to have them act as its subcontractors under a specified contract or acquisition program.” The Department of Defense (DOD) catagorizes teaming agreements as a prime contractor and subcontractor relationship; subcontracting; partnerships; joint ventures; cooperative research and development agreements; public-private partnership and mentor protégé agreements. Potential teaming partners must understand and create teaming documents that address contract privity, limitations on subcontracting and the SBA rules on affiliation
The most prevailing teaming business model in federal contracting is the prime contractor and subcontractor relationship. In this relationship, a group of companies form a team to work together to pursue a prime contract with the promise to work together to negotiate a subcontract with the team members if the team is successful in winning a contract award. When the team members are successful in their procurement pursuit and the proposed prime contractor is awarded a contract, the team members must then negotiate in good faith to enter into a subcontract. The subcontract serves to formalize the legal relationship between the team members and the prime contractor. http://media.nucleus.naprojects.com/pdf/American_Express_OPEN_Victory_in_Procurement_survey_3.pdf
A partnership is a business enterprise consisting of two or more individuals or concerns who come together to co-own a single business for profit. Partnerships fall into two basic types: general and limited. In a general partnership, each partner invests in a business with an agreed-upon percentage of ownership and acceptance of all the debts, regardless of which partner incurred the debt. In a general partnership, the action of any partner can bind the entire partnership on contracts
A limited partnership is a special type of partnership consisting of general partners and limited partners. The general partners manage the business enterprise and are liable for the legal debts and obligations of the partnership. The limited partners invest funds into the partnership in exchange for receiving a predetermined share of the profit. The limited partners are prohibited from participating in the management of the partnership; otherwise, they will lose their limited partner status. They have no authority to control day-to-day operations. Limited partners are liable only to the extent of their investments.
The Code of Federal Regulations (CFR) 13 CFR 121.103(h) defines a joint venture as an association of two or more individuals or concerns formed to undertake a particular business transaction or project, rather than one in tended to continue indefinitely. The members of the joint venture share in the profits and risk of loss. The joint venture entity, and its members are in privity of contract with the government. Like the SBA regulations, the FAR FAR 19.101(7)(i), defines a joint venture as having a limited life, rather than being permanent. Unlike the SBA regulations, which permit a joint venture to submit up to three proposals for different procurements over a 2-year period, the FAR defines a joint venture as collaborating on a single specific business venture. Small disadvantaged business (SDB) see 13 CFR 124.1002(f) and (2)), Service Disabled Veteran-Owned Small Business Concerns (SDVOSBs) 13 CFR 125.15(b) and SBA 8a mentor protégé participants may enter into joint venture agreements with limitations.
The SBA Mentor-Protégé Program enables concerns certified as SDBs under Section 8(a) to form a joint venture with a mentor firm to pursue large, consolidated or bundled procurements. The 8(a) firm may form a joint venture with a large or small business under an SBA-approved 8(a) joint venture agreement. The joint venture is deemed small as long as the 8(a) protégé qualifies as small for the procurement (regardless of the size of the mentor. An 8(a) protégé firm may form a joint venture with its SBA-approved mentor to pursue any type of federal contract procurement, not solely 8(a) procurements. As a result, the Limitations on Subcontracting, performance-of-work requirements of FAR 52.219-14, FAR 52-219-3, and FAR 52.219-27 would not apply. In other words, an SBA-approved 8(a) joint venture pursuing a large, bundled procurement need not worry about the percentage of work to be performed by the individual members of the joint venture.
A Cooperative Research and Development Agreement (CRADA) is a written agreement between a government agency and a private company to work together on a project. Under a CRADA, the government agency and private entity form teams to solve technological and industrial problems.
A Public-Private Partnership (PPP) is a contractual risk-sharing agreement between a public agency and a private-sector entity. Through this agreement, the public and private-sector entities share skills and assets to deliver a service or facility for the use of the general public. PPPs are typically used to provide needed public facilities and infrastructure.
In its post-Adarand guidance following the Supreme Court’s 1995 decision, the Department Of Justice (DOJ) recognized partnering as an effective strategy, and recommended that agencies actively pursue race-neutral mentor-protégé programs that do not guarantee contract awards on a noncompetitive basis Mentor-protégé programs may or may not be race-neutral depending on whether they are open to all firms based on objective economic or social data. Mentor-protégé efforts should attempt to make small and disadvantaged firms more competitive, without altering standards for competition or establishing award preferences. The GAO (http://www.gao.gov/new.items/d11548r.pdf) reported that as of March 2011, that NASA had 12 agreements, GSA 65, SBA 482, FAA 10, Department of Veterans Affairs 24, US AID 6, Department of Energy 120, Department of Treasury 58, Department of State 86, Environmental Protection Agency 4, Homeland Security 9, Department of Defense 101, and Department Homeland Security 220 active agreements.
Federal Mentor Protégé programs require the mentor to provide developmental assistance which may include 1. General business management, including organizational management, financial management, and personnel management, marketing, business development, and overall business planning; (ii) Engineering and technical matters such as production inventory control and quality assurance; and(iii) Any other assistance designed to develop the capabilities of the protégé firm under the developmental program. 2) Award of subcontracts under DoD contracts or other contracts on a noncompetitive basis.(3) Payment of progress payments for the performance of subcontracts by a protégé firm in amounts as provided for in the subcontract; . (4) Advance payments under such subcontracts. (5) Loans. (6) Investment(s) in the protégé firm not to exceed 10 percent. (7) Assistance that the mentor firm obtains for the protégé firm from one or more of the following: (i) Small Business Development Centers, Procurement Technical Assistance Centers).(iii) Historically black colleges and universities.(iv) Minority institutions of higher education.
The SBA’s Small Business Teaming Pilot (http://www.sba.gov/content/small-business-teaming-pilot-program) was created to help companies form teaming agreements. On September 23rd, 2011, the SBA announced the awardees of the SBTPP grants. Eleven grantees were selected from hundreds of applications submitted. Grantees were awarded between $200,000 and $500,000 in funding, for a total of approximately $5 million in Fiscal Year 2011.
Grantees are expected to help small businesses find other firms interested in teaming, assist SBs with the formation and execution of teaming arrangements, aid teams of SBs in identifying appropriate larger contracting opportunities, and assist teams of SBs with the preparation and submission of bids and offers. Grantees will leverage their existing resources and collaborate with SBA District Offices, resource partners, and other federal, state, local and tribal government small business development programs.
Please contact the awardee in your area to get help forming a teaming agreement. Teaming arrangements are a great way for a small business to eventually become a prime contractor. As discussed earlier, teaming arrangements take the form of prime contractor and subcontractor relationship; subcontracting; partnerships; joint ventures; cooperative research and development agreements; Public-Private Partnership (PPP) and mentor protégé agreements. These arrangements can help the small business learn the ins and outs of contract compliance, quality control, finance, past performance, audits and other issues around government contracting.
The Open Ratings Report is a summary of a survey of the company’s customers conducted by Dunn and Bradstreet. The Open Ratings Report is part of the application process for a GSA schedule. GSA requires this survey from a minium of 4 to maxium of 20 customer references. The results of the Open Ratings survey indicate where the company’s overall performance falls in comparison to related industry groups. The report provides a breakdown of survey responses rated on a 0-10 scale for each question. A customer reference is a person or company that has purchased products or services from the company. Vendor references are excluded from the survey. Dunn and Bradstreet sends a questionaire to the company referencesasking them to rate the company’s past performance. The survey covers overall performance, reliabilirt, cost, order accuracy, delivery/timeless, quality, business relations, personnel, customer support and responsiveness. GSA will only select the companies with a score of 9.0 and above.
The Open Rating Report should be part of the company’s marketing tool box. Depending on the score, the company should let all customer prospects see the report. Federal contracting officers are very interested in a company’s past performance and the the Open Ratings Report provides a snap shot. Companies interested in doing business with government should consider using this Dunn and Bradshreet tool regardless of applying for the GSA schedule.
Steps 1 & 2 discussed how important it is to know key government websites and register the company in the CCR and ORCA. Steps 3 and 4 include determining the company’s eligibility for the socio economic programs and the importance of the Federal Supply Classification Codes (FSC) and North American Industry Classification System (NAICS) Codes. Understanding the certifications and classifications programs enhance a company’s ability to get government jobs through federal contracts. FCIS has developed marketing reports that help companies identify contracting officers that utilizes the socio economic programs for contracting and identify agency contracting offices by classification systems.
Step 3. Determine if the company qualifies for one or more of the SBA and Veteran Administration Certification Programs. The SBA currently has three socio economic certification programs: 8(a), HUBZone and Women-Owned Small Business Programs. The 8(a) Business Development program assists eligible small businesses to compete by providing them with business developmental assistance. The owner of a small business must be socio or economic disadvantaged. Economic disadvantage is based on personal income ($250,000 for initial eligibility, $350,000 for continued eligibility) and total assets ($4 million for initial eligibility, $6 million continued eligibility). Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as members of a group. Social disadvantage must stem from circumstances beyond their control. Companies with the 8(a) certification are eligible for set aside contract opportunities.
Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC) – (http://www.sba.gov/content/service-disabled-veteran-owned-small-business-concerns-sdvosbc) The Veterans Benefits Act of 2003 established a procurement program for Service-Disabled Veteran-Owned Small Businesses that allows contracting officers to restrict competition to SDVOSBCs and award a sole source or set-aside contract where certain criteria are met. In addition, the rule allows SDVOSB concerns to self-certify however the eligible veteran should get certified by VetBiz in order to withstand any certification challenges. In order to be eligible for the SDVOSBC, the Department of Veterans Affairs or Department of Defense must certify service disabled veteran has a service-connected disability, the Company must be small under the NAICS code assigned to the procurement, the Service disabled veteran must own 51% of the company unconditionally and control the management of daily operations and must hold the highest officer position in the company.
Women-Owned Small Business (WOSB)/Economically Disadvantaged Women-Owned Small Business (EDWOSB) Program- (http://www.sba.gov/content/contracting-opportunities-women-owned-small-businesses) The Women-Owned Small Business (WOSB) Federal Contract program authorizes contracting officers to set aside certain federal contracts based on approved NAICS for eligible Women-owned small businesses (WOSBs) or Economically disadvantaged women-owned small businesses (EDWOSBs). Those firms can self-certify their status. An SBA approved 3rd Party Certifier is recommended in order to withstand any challenges.
Step 4. The company must be able to match its products or services with the Federal Supply Classification Codes (FSC) and North American Industry Classification System (NAICS) Codes. The NAICS and FSC codes should be included in the CCR and ORCA registration. NAICS and FSC codes are used by the government to establish business size standards (http://www.sba.gov/content/table-small-business-size-standards), identify potential vendors for government jobs, accumulate economic statistics and classify government contracts for the Federal Procurement Data System (FPDS).
The FY 2012 USG Procurement by NAICS_PSC report provides a breakdown of procurement by NAICS and PSC. The report indicates that four hundred and forty (440) Agency Contracting Offices completed 588,946 transactions with 69,014 vendors in the amount of $49 billion. These transactions were classified using 922 NAICS and 9,733 PSC. See report FY 2012 USG Procurement by NAICS_PSC Understanding the NAICS and PSC codes will lead to more government contracts. Small business can use these classifications to determine how much the USG buys and which agency contracting offices make the purchase. The FPDS is a good data set to build a federal marketing plan.
Thousands of government jobs are available to companies wanting to do business with government. The contract jobs are in Information Technology, Security, and all industries. Dealing with Federal Government can be frustrating. However, your efforts can be rewarded if you plan your work and work your plan. FCIS specializes helping companies market their products and services to get the government jobs by providing target markets reports and developing a Federal Marketing Plan.
See steps 1-2 below. Steps 3-9 will follow.
Step 1. Become familiar with the following websites for Government Contracting:
The U.S. Small Business Administration is dedicated to providing a wide range of programs and assistance to small businesses wanting to do business with the government. From the Contracting Section under Contracting Opportunities: (http://www.sba.gov/category/navigation-structure/contracting/contracting-opportunities) contain you web links to additional procurement-related programs and assistance such as; Subcontracting, Federal Business Opportunities, GSA Schedules, Green Contracting Opportunities, Federal Procurement Database Systems – Next Generation, USA Spends, Contracting of Manufacturing, Contracting Opportunities for Energy Efficient Businesses. Government Agency Acquisition Forecasts contain upcoming government contract opportunities:
Step 2. Obtain a Data Universal Number System (DUNS) number, register in the Central Contractor Registration (CCR) (System and Online Representations and Certifications Application (ORCA). Contact Dun & Bradstreet (D&B) at to obtain a number if you do not have one. The DUNS number is free. All companies must be registered in CCR to be awarded a federal contract and to receive payment by the Government. Once you have obtained your DUNS number, your next step is to register in the Central Contractors Registration (CCR) database. The CCR requires the company to match its goods and or services with the the Federal Supply Classification Codes (FSC) and North American Industry Classification System (NAICS). Be sure to select a primary NAICS and PSC codes. You can add supplementary classification codes but limit them to three each. Many contracting officers look at the CCR and its important noe to confuse them on what the company does.
Once the registration in the CCR is complete, click on “SBA Register or Update your SBA Profile”. The next registration sysytem is the Small Business Administration?s Dynamic Small Business Search (DSBS). The company should complete information which is accessible by contracting staff under the SBA – Dynamic Small Business Search
The remaining steps 3-9 will be discussed in later posts.
Federal Contract Intelligence Service is a data mining company that specializes in tracking current and historical United States Government (USG) procurement statistics. We provide up-to-the-date marketing list/reports to companies that want to do business with the federal government. Our clients use these list/reports to position itself 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 from fee-based subscription services as well as current data sets from Data.gov, Federal Procurement Data System, USA Spending and other data provided and updated by the USG. Please see the samples of our reports.
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 get federal contract business opportunites (fedbizopps). The FMP can be especially good for new companies wanting 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 included 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 federal government is a good target market. 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:
The FMP includes the following elements
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.
Small business owners can improve their ability to get federal contracts if they understand the nature and use of the North American Industry Classification System (NAICS) and Product and Service Codes. The purposes of these codes are to collect, analyze and publish statistical data on economic activity in the United States, Mexico and Canada. The Federal Procurement Data System (FPDS) uses these codes to track federal procurement history
NAICS is a two through six-digit hierarchical classification code system offering five levels of detail. The first two digits designate the economic sector, the third digit designates the subsector, the fourth digit designates the industry group, the fifth digit designates the NAICS industry, and the sixth digit designates the national industry. The Product and Service Codes (PSC) are a four digit code system to further describe products, services and research and development purchases by the USG
The report below describes the FY 2012 USG Procurement by NAICS_PSC at the economic sector level. Further breakdown of procurement by NAICS and PSC is available from the FPDS data set located at data.gov. Four hundred and forty (440) Agency Contracting Offices completed 588,946 transactions with 69,014 vendors in the amount of $49 billion. These transactions were classified using 922 NAICS and 9,733 PSC.
Small business can use these classifications to determine how much the USG buys and which agency contracting offices make the purchase. The FPDS is a good data set to build a federal marketing plan.
The key questions asked by small business owners who want to market their business to the United States Government (USG) are 1) Does the federal government buy my company’s products/services? 2) WHO in the agency contracting office buys? 3) How did they make the purchase? And 4) What are my competitors doing? The answers to these questions provide the first step in the path to obtaining federal contracts. The USG spends over $500 billion a year buying goods and services from commercial entities. The data sets contained in Data.gov can help small business find business opportunities and market to targeted agency contracting offices
There are over 14 data sets in Data.gov that report USG procurement. The key data sets include e-buy Awards for Fiscal Year 2009, 2008, 2007, 2006 and 2007; GSA elibrary Schedule and Contracts; Schedule Sales Query Report Generation System, Schedule Sales Query Raw Data; North American Industry Classification System; NAICS Matrix for Active GSA Schedules and GSA GWAC’s; PSC Matrix for Active GSA Schedules and GSA GWAC’s; Federal Business Opportunity Data; USA Spending Contracts and Purchases and the Federal Procurement Data System. The challenge for small business is getting the information from these data sets into actionable formats or reports. This requires expertise on mining data and understanding how this data works to their benefit.
Federal Contract Intelligence Service has taken some of the data from the above data sets and created three sample reports designed to help small businesses market their products/service to agency contracting offices. Please see sample reports (http://fedcontractintel.com/sample-reports-for-101-and-301/ ) .
The data sets in Data.gov provide a tremendous amount of data for commercial use. The challenge is mining the data to create actionable reports for small business. This is the first blog in a series on the benefit of using Data.gov to help small business get federal contracts. Other blogs will explore the North American Industrial Classification System and Federal Procurement Data System. Stay tune.