Government agencies buy everything from rockets and spaceships to toilets and toilet paper. They also contract for nearly every imaginable service. Just 4 years ago, the federal government awarded nearly $445 billion in contracts. Even at the state and local level, government contracting means big money—especially for a small business.
But the government’s acquisition process—even the motivations behind an acquisition—differs from that of the commercial world. To the uninformed, competition for lucrative government contracts can seem overly difficult and costly.
Government agencies and offices are not trying to make it impossible to do business; regulations and process just make it seem that way. Once you know the rules, getting a contract with a government agency, office, or department is not so different from the commercial side. Following a slightly modified integrated marketing communication (IMC) model can help.
Elements of Success
Three elements are crucial to success in the government market space: Information, relationships, and a careful plan.
- Gather as much information as possible to increase your overall knowledge of the way government does business. That means understanding the regulations that apply. Learn the interests and practices of a targeted agency or department, as well. A little careful research will produce in a wealth of business intelligence, including who is buying, what they are buying, and how they are buying it.
- Based on the information you gather, meet the key players are in the agency or office of interest. Make an effort to meet with the contracting officers as well as or those in a position to influence purchasing decisions. Foster trust and two-way communications. It takes time, but it is worth it.
- Time is also a factor when planning your marketing and communications. Knowing when to provide specific messages to particular audiences in specific forums and media can mean the difference between contract award or wasted effort and money.
The Acquisition Process—Your road map to success
On the government side, most contracting efforts follow seven fundamental steps for acquiring goods or services:
- Identify a need—What is needed, why and when, and in what quantities?
- Research the market—Who can fulfill the identified need?
- Develop an acquisition plan—How can the government engage a company to fulfill the identified need?
- Release a solicitation for bid—If there are multiple sources, what can they offer and at what price?
- Select a contractor—Who offers the best value to the government (lowest risk, lowest cost, best solution)?
- Manage contract—How well are the contract’s requirements being fulfilled?
- Close out contract—Did the chosen contractor provide what was promised?
Although the overall process is similar to the commercial world, it would be a mistake to replicate a commercial marketing plan for a government prospect. One reason is that commercial marketing strategies tend to take a short view, looking to the bottom line quarter to quarter, if not month to month. The government works on a different timeline, sometimes taking years to get to contract award. Another reason is the government’s decision to purchase a product or acquire a service must be made impartially.
This means large advertising campaigns and marketing budgets are not necessarily the way to go. The Federal Acquisition Regulation, which dictates all federal government acquisition actions, states: “Government business shall be conducted in a manner above reproach and…with complete impartiality and with preferential treatment for none.” Advertising and other commercial marketing practices also do not help in the gathering of information or the building of those key government relationships.
The Modified IMC Model—Fitting commercial practices to government processes
It is better to approach the government market in classic IMC style—from the customer’s perspective. Identify their need and find a solution. This means beginning early—well before the government formally recognizes their own need (Step 1 of the acquisition cycle).
When we apply the principles of IMC to the linear government acquisition cycle, we realize there are numerous opportunities for marketing communications. This results in a modified IMC process that still captures the IMC essentials of identifying customers, determining their value, developing and delivering critical messages, evaluating the effectiveness of messaging, and budgeting allocation.
To illustrate, let’s consider a fictional scenario: Bob’s Lawn and Landscape.
Bob is co-owner of his namesake company and employs 15 people full-time (including 4 office staff), with an additional 20–30 brought in during the peak “growing season” (April–September). Bob serves mostly residential customers in the eastern suburbs of a large Midwest city, but he also has a several commercial clients, including a hospital and university. Bob would like to get one of five landscaping contracts for a nearby Air Force base. A little over 3 years ago, Bob spent a lot of time, effort, and money submitting an unsuccessful proposal for the current contract. That 5-year contract is coming up for re-compete next year. Bob plans on following a modified IMC model to win that contract.
Identify the government customer and determine their value
Government is a big universe. Segment the larger market by focusing on a department or agency, then an office within that agency. Do your research and get to know that prospective government customer. Who is buying, what are they buying, how much are they buying, and what is their budget? Fortunately all that information is publically available.
Last year, the Department of Defense awarded nearly 1.25 million contracts (to the tune of nearly $193 billion). How many of those contracts were for the Air Force? How many were for a particular base? What is the base operating budget? Who are the incumbents on the current contract? What was the award value?
These are the questions Bob needs to answer. Bob learned the hard way that a proposal submission is not enough when competing for government contracts. As a result, he has done his research. He now understands the solicitation process. He also filed a Freedom of Information request and learned all the details about the current contract, including the award price ($48,585 per year). In the last 3 years, he met with the current contracting officer, the base operations officer, as well as the small business office representative. A few months ago, Bob found a news release about the base commander, who is pushing for LEED certification and other environmental initiatives.
Create a Message—Differentiate Yourself
With an eye to a specific agency and knowledge of their past, current, and future budget, it is time to determine your company’s value proposition. Learn the hot topics for the agency; identify the challenges they face. The issues faced by an agency may be generic and universal to doing business, or they may be government-unique.
It is possible to avoid the solicitation process altogether. Government offices have access to purchase cards (government credit cards) for “micro-purchases,” or purchases of supplies and services that do not exceed $3,500 in total. These purchases, which include travel and fuel, are not scrutinized to the same degree as most other acquisitions, but they are still administered by a strict set of rules.
For more information on government purchase cards see https://smartpay.gsa.gov/
For example, the office you target may be looking for a way to comply with a new regulation or recover from a highly publicized gaffe. Your value is in finding a solution, while saving the government money, time, or reputation.
If your company is unique in its solution, your messaging should reflect that fact. If you’re one of many, focus your messaging on your key differentiators. In government proposal parlance, such differentiators are known as “win themes.” Your win themes carry throughout the acquisition process, from pre-solicitation through to contract award and closeout. They must also evolve.
Bob is one of many lawn care and landscaping companies in the area. Over the years, Bob has specialized in landscaping with solar-powered lighting. He also plans to partner with a landscape designer that is an expert in sustainable urban landscape development. Although this raises costs, he knows environmentally friendly initiatives are a current political hot-button.
Three other points differentiate Bob from other landscapers: His company is a small business, he is a service-disabled veteran, and he is on a GSA contract for landscaping services.
How you deliver your messaging and illustrate your differentiators depends on the problem to be solved and the agency or office being targeted. The critical element is backing up your claims with proof of past experience and measurable results.
When to deliver your message is complicated by the different steps of the acquisition cycle. One thing is certain, marketing communications are most effective pre-solicitation, when a would-be contractor can “influence” the government’s acquisition plan and the solicitation requirements.
Three examples of influence:
- The decision to restrict the solicitation as a small business set-aside.
- The technical or performance requirements to be listed in the solicitation.
- The contract vehicle to be used.
It is in the early stages of the acquisition process (when a contracting officer is seeking information to help define a need) that social media, expert blogs, website content, articles, and information papers are most effective.
Several months ago, Bob made a presentation to the local chamber of commerce about sustainable landscaping practices. He has since fielded numerous questions by the base commander and base personnel about innovations in alternative energy generation, including solar power. He is pretty confident the statement of work (SOW) for the upcoming re-compete will require solar-powered lighting along secondary walkways. To ensure the message gets through, Bob started writing a monthly article, “Greenways,” in the base newspaper, which he also promotes through his website and blog.
Evaluating effectiveness of marketing communications is always difficult. What measures do you use? For government contracting, there are a three opportunities to evaluate the effectiveness of your messaging.
The first is during the government’s market research. In some competitive solicitations, the government will post a request for information (RFI). The government’s goal is to determine if there are any qualified contractors willing to submit a proposal and what information is required within the RFP. Careful scrutiny of the RFI will reflect whether your early-stage marketing reached its target.
The second opportunity is at the point of solicitation release. Like the RFI, the request for proposal, statement of work, performance work statement, or product technical requirements can be evaluated for evidence of marketing success.
The third opportunity is obviously at contract award. Did your win themes ring true to those evaluating the proposal? Did they balance well with the price proposed?
At RFP release, Bob is relieved to note that the solicitation is restricted to offers from small businesses, but not specifically to veteran-owned businesses. This may be an indication that he is the only veteran-owned company expected to compete. He figures this will be another possible theme he should highlight in his proposal write up.
He is also pleased to see the requirement for solar-powered lighting, but the specifications are for a brand he has never installed. This may indicate that another contractor has influenced the statement of work. He will need to address this in his proposal as well.
Set your Marketing Budget
The size of a government marketing budget can be difficult to determine. Companies often develop budgets to control the cost of developing proposals, but do not consider the “softer” costs, like the time required to build relationship or research prospective contracts. Again, careful planning is key.
Bob really did not have much of a budget. The majority of his residential and commercial business is won by word of mouth and flyers dropped door to door as his workers finished landscape jobs in the neighborhood.
Other than the time and money spent to develop a short 5-page proposal, Bob’s only expense was the time he took to write articles, meet with the base personnel, and conduct research. That equated to roughly 20% of his time over the year, or 400 hours (at an estimated $35 per hour). If his bid for $49,000 (annually) is selected, that is a 250% return on investment.
Coming soon: The next step—getting a proposal together.