When I discovered government contracting, I studied why large companies win billions in contracts and why small businesses struggle to win just a few contracts. What I uncovered was an astonishing secret strategy that few entrepreneurs know about. In the private sector, it’s the celebrity person who makes the most money.
What I realized about the government sector is that your celebrity status means nothing in the government industry. You can’t use your celebrity status to influence a contract award. It doesn’t work that way. How you win contracts is the opposite. It’s reversed in the B2G market. Take a look at this reversed triangle. The generalist is the one that has the best chance to win the most contract awards.
Imagine that you’re the KO:
You handle acquisitions related to property assets and facilities. Let’s say that the FBI director asks you to procure construction services to build a state-of-the-art high-tech building with 1 million total square feet of usable space. The total budget is $300 million and will take 3 years to complete. You will need the following services:
- Architectural firm
- Civil engineers
- Mechanical engineers
- Plumbers
- Roofers
- Electricians
- Carpenters
- Painters
- Welders
- Concrete/brick masonry contractors
- Window installers
- Interior designers
- Landscapers
- And many other specialty contractors
If you were to award a contract to each specialist for the completion of this FBI building, it would be a nightmare. You would need a few hundred contractors. So what should you do as a contracting officer? Well, you put out one solicitation to a design-build firm or a general contractor (GC) who can manage all of the subcontractors and specialty contractors.
In the same way, government contracting is about you setting up your business to be a GC, but not a general contractor, more as a government contractor. In other words, you’d be a generalist who can handle many different needs that an agency will have. You focus on winning the contracts and let others support the fulfillment of these contracts.
CASE STUDY:
Lockheed Martin vs 8a Certified Companies
Let’s look at a case study of Lockheed Martin versus all of the 8a certified small businesses in the federal market.
Lockheed is one giant company. They win over $44 billion in awards each year. There are approximately 6,000 certified 8a companies actively pursuing contract awards. These companies only won $12 billion in awards. $44 billion vs $12 billion. How can one company win more contracts than 6,000 companies?
The Secret:
My quest to understand this concept led me to the revelation of another important secret: Government contracting is NOT about a niche market (a specific product or service), it is about winning awards. Similar to being a generalist vs specialist, it’s about learning how to win contracts.
Lockheed Martin does not see itself as an aerospace or aviation company. It sees itself as a government contractor or GC. It understands the needs of agencies and positions itself to have the right solutions to fix the problems agencies have. If government agencies need missile defense, they can do that. If agencies need IT services, they can do that as well. Lockheed Martin sees itself as a generalist and not a specialist in one niche market. It’s into aviation, aerospace, logistics, supply chain, manufacturing, construction, facilities, asset management, information technology, cyber, and many other markets.
Failure:
With this case study, we understand that government contracting is NOT ABOUT logistics, IT, construction services, or any specific niche market. To think so is the biggest reason most companies don’t succeed in the government market. There are 31 million+ US companies and less than 181,000 are winning federal contracts (<1%) because they think it is about services or products.
Success:
Government contracting IS ABOUT understanding a few key things:
- The flow of money from appropriation, to forecast, to solicitation, to proposal, to award and then finally to fulfillment.
- Relationships – relationships – relationships
- Creating a capture plan
- Writing winning proposals
- Implementing the right strategies
- Procurement rules and regulations (F.A.R.)
- Learning to speak the language
- Understanding the culture
Being a generalist will open more doors to contract awards. It will allow you to earn the most revenue.
Contracting Trends:
This is in line with these trends:
- Categorization of niche markets into generalized categories
- Bundling of smaller acquisitions into larger contracts
- Utilization of task orders within IDIQ or other contract vehicles
- An older acquisition workforce retiring and newer and less experienced new staff
In summary, the above reasons are why you should have the mindset of being a generalist. Yes, you should start within the niche that you have expertise in, this is you being a specialist. However, working your way to become a generalist will maximize your greatest revenue potential in the B2G market.
ABOUT THE AUTHOR: Abraham Xiong, CCM™
Abraham Xiong is a small business advocate, social entrepreneur, executive trainer, technology enthusiast, business coach, and community leader. He is the Founder of www.GovAssociation.org and www.GovGenie.com, which are organizations assisting small businesses to access more contract opportunities in the B2G marketplace. He can be reached at: info@govcontractors.org
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