The U.S. government is the largest buyer in the world. It is estimated the government will spend $1.2 trillion in 2010, and it purchases almost every type of product or service available.
“Don’t think that your service is too obscure or too unusual for the federal government not to need it,” says Michelle Hermelee, an expert on obtaining government contracts for businesses and owner of BH Sky Associates at 3490 Route 1. “The government is looking for people to provide solutions on anything from software to medical equipment to construction to janitorial services. Even martial arts training.”
Hermelee will hold a seminar on government contracting on Thursday, September 23, at 10 a.m. at BH Sky. Cost: $20. Call 866-468-7420.
Hermelee did not expect to open her own consulting business, particularly in the area of government contract assistance. Her original interest was in public health, and she received her bachelor’s from Rutgers in that field in 1999.
She originally worked in the health industry, where her job involved developing government contracts. In 2005 she opened her own firm so that she could use her expertise to “help more small businesses identify, secure, negotiate, manage, and market contracts with the government,” she says. She recently moved from Quakerbridge Plaza in Hamilton into a larger office and hired her first employee.
Small businesses have an excellent opportunity to obtain contracts with the government, Hemerlee says. In fact, in 2009 the feds awarded $96.8 billion in contracts to small businesses. Businesses that are classified as “economically or socially disadvantaged,” including businesses owned by disabled veterans or women, or companies located in a Historically Underutilized Business, or HUB, zone, have an edge in obtaining contracts from the federal government.
Don’t forget local government. State and local governments spend money daily. “One of the best reasons to consider doing business with the government is that it never slows down,” Hermelee says. “No matter what else is happening in the rest of the economy, the government is writing purchase orders every day.”
A government contract can also bring stability to a small business because it is usually a long-term contract (at least a year), rather than a one-time order.
“Let’s say you own an HVAC repair company,” Hermelee says. “Instead of waiting around for one client to need your services, by working with the government you could have a contract to handle maintenance and repairs on a building, or several buildings, for an entire year.”
The government needs everything that other business needs — basic office supplies, food services, maintenance. It also contracts for more specialized services, such as surveying, and has a few growth areas to take advantage of — biometrics, cyber security, healthcare, logistics, and energy efficient and “green” products.
Getting registered. Before even looking for a government contract, the first step for a business owner is to obtain a nine-digit identification number, or Duns Number, from Dun and Bradstreet. Registration is free and is available at www.dnb.com, Hermelee mentions.
Next the business must register with Central Contractor Registration, the primary supplier database for the federal government, at www.ccr.gov. The CCR is a central database that collects information from suppliers, validates and stores the data, and distributes it to government agencies. A business must have a Duns Number before registering with the CCR.
When registering with the CCR a business must choose which NAICS classification codes it should be listed under. “It is important to choose the most correct codes for your business because this is how the government agencies will find you,” says Hermelee. She advises choosing as many classifications as possible and keeping them as broad as possible.
Finally, the business must file an ORCA, or Online Representations and Certifications Application, at www.orca.bpn.gov.
Hermelee recommends that businesses also obtain other appropriate certifications, such as small business, or woman-owned business, to “leverage” these classifications whenever possible. “Look at all of the programs out there to see what fits your business,” she says. Information on a variety of programs, as well as all of the government registration sites listed is available on her website at www.bhskyassociates.com.
Finding contracts. Once you have completed the registration process you can begin the search for appropriate contracts for your business. The web has made it easier for businesses to shop for contract information, she adds.
The first stop to make is Federal Biz Opps, or www.fbo.gov, which bills itself as “the U.S. government’s one stop virtual marketplace.” The site allows commercial vendors and government buyers to “post, search, monitor, and retrieve opportunities solicited by the entire federal government community.” Every federal agency is required to post bids over $25,000 on this site.
Businesses looking for contracts can search the site by NAICS code, keyword, or look up their competitors to see what other similar business are bidding on. The site also lists important information such as the procurement officer for a bid.
For businesses unwilling to jump into the government contract arena, Hermelee suggests getting initial experience as a sub-contractor. Many larger corporations are interested in sub-contracting to smaller companies because the latter’s certifications can help the large company leverage those small business set-asides.
Learn patience. It is important for anyone interested in bidding on a government contract to be patient. “This is not a fast process,” Hermelee says. “It takes time to obtain the certifications and make the connections.”
She suggests attending vendor outreach programs as an excellent way to start to make the right connections. Business owners should also do their homework before making any bids, she adds. “Just like with any other type of contract you need to do your market research, find out where and when the bids will be posted, learn about your competition and take a good look at your pricing. Make sure you have a very accurate idea of how much money you need to make a profit on the contract.”
Follow the rules. “You need to understand all of the terms of the bid. Read it over several times and make sure you really understand the full scope,” she says. Then go look at your competition. “It’s a matter of public record. You can find out who the previous incumbent was on the bid, research them, and look at their pricing.”
It is extremely important to follow all of the rules of the bidding process, down to the letter. Even the smallest mistake can cost a company a bid (a very public example is the ouster of state education chief Brett Schundler for filling out a federal aid form that cost New Jersey more than $400 million).
Hermelee remembers a corporation that recently lost a potential $35 billion contract by submitting the bid five minutes late.
“The most obvious and simple mistakes are often the ones business make most often when it comes to bidding for government contracts,” says Hermelee. The competition is fierce, and those small mistakes can be costly, but if you follow through on the details, the rewards can be great.