By: Rose Wang, President and Chief Executive Officer at the Binary Group, Inc.
Last month, the ACG National Capital Chapter held an Emerging Growth Business Roundtable for CEOs of government contractors. Participants were limited to C-level executives at companies with 5-250 employees only.
The event theme was, “growing the business,” and focused on how the government purchases products and services and what influences their purchasing decisions. The concept was to help these small, emerging growth government contractors better capture large contracts from the federal government.
In addition to the usual ACG National Capital thought leaders and business experts, the roundtable featured three incredible speakers:
- Don Beery: the CEO at Plus Point Partners and a business growth expert
- Stan Soloway: the President of the Professional Services Council
- Edwin Miller: Chairman at Callis Communications, CEO at 9Lenses, Managing Partner at (i)SAGE and serial entrepreneur
One of the topics that was on the mind of many of the government contractors in attendance, and that Don, Stan and Edwin were able to help address, was the current trends impacting the federal acquisition process. Many contractors are concerned about the ways in which the acquisition process is changing and how it could influence their ability to sell into the government.
Currently, there are two very large GWACs that are currently in the process of being renewed, SEWP and CIO SP3. These two government wide contracts are extremely influential since the Office of Management and Budget is looking at them as the model for all government wide acquisition contracts (GWAC) in the next two years.
However, the very existence of large contracts such as GWAC contracts and indefinite delivery indefinite quantity (IDIQ) contracts could be in doubt.
GWAC contracts are nothing more than hunting licenses which provide a government contractor with the ability to pursue business with various government agencies. Historically, GWAC contracts have been detrimental to small, emerging growth government contractors since they require a significant investment of time and resources to acquire and don’t guarantee that any business will result.
In contrast to large government contractors, which have significantly more funds, resources and manpower to spend in the acquisition of a GWAC contract and subsequent pursuit of task order business, small government contractors simply can’t afford to make such a large investment and not receive any business in return.
It’s for this reason that the Department of Defense (DOD) is moving away from large buys and large contracts of this nature. However, this move doesn’t come easy for the government.
Two decades ago, there was a move towards large contracts, such as GWACs, to reduce the need for extensive acquisition workforces and to help the government save money. It’s now illegal to bundle contracts and government agencies are shifting away from large contracts, but they don’t yet have the acquisition workforce needed to make it happen.
With a strained acquisition workforce, it’s increasingly important that government contractors go the extra mile to make sales. The contractors have to know their sales targets and understand the internal buying culture of the targets.
This move away from bundling and consolidated contracts isn’t the only major change currently facing the federal acquisition process. There’s also a new and increasing push for transparency for both prime and sub contractors.
This can be very detrimental for small and emerging growth companies which are often the sub on large government contracts. These private government contractors simply aren’t used to having to disclose the amount of information that the government requires. Information like executive pay is suddenly required of subs that previously could hide behind the prime on a contract. This means that smaller contractors have to be more careful with compliance issues and manage their internal systems much closer.
The ability of small government contractors to land large government contracts is increasing as bundling and GWAC contracts begin to be pushed aside. However, the stress on these contractors to sell to stressed acquisition workforce at federal agencies and manage their internal processes in light of increased transparency could be detrimental for the emerging growth professional services company moving forward.
In out next Emerging Growth Business Roundtable, we’ll once again visit the topic of winning business from the federal government. The focus of the next event will be on winning smaller government contracts, especially from the prime contractors. The event is open to ACG members that are CEOs at emerging growth companies. Click HERE for more information.