21st Century Economics

The market, of course, is the federal market - all of our federal government including the Department of Defense. This article is not to tell you how to get in on this but to tell you that it exists and that there are some pretty tricky ways to take advantage of it. Let’s reveiw some examples:

Set Asides:

If you are a minority including disabled, veteran, black, Hispanic, woman or any of several other categories of “minority”, you can get preferential treatment when bidding on a government contract. All the federal government agencies are required by law to “set aside” a certain number of contract for these minorities. The part of the Federal Acquisition Regulations that applies to this program is section 8a and so this is often call the “8a program”.

Subcontractors:

Billions of dollars are spent every year on a very short list of “prime” contractors. In fact 20% of all the federal contractors get 80% of the money. Often these “primes” (like Boeing, AT&T, Lockheed-Martin, General Dynamics, etc.) play a political game as well as a bidding war with their competition. One year, Boeing beat out its competition for a $1.6 billion contract by announcing that it will subcontract a portion of the work into every State in the US. Often these subcontracts are worth 100’s of 1000’s of dollars to some small supplier of some minor component or service that is needed by the prime to deliver the service.

You can tap into this market by registering with the “small business liaisons office” of each of the primes. You can get many of the contacts online or from the SBA. You register your SIC codes as well as your size, capabilities and location. It is very possible that you can get a contract simply because of where you are located.

Vendors:

The federal agencies have their own supermarket. They call it the GSA Schedule. It is a list of products and sources that have been approved by the GSA - General Services Administration - that have been approved for sales to the government without additional contracting. For instance, if you sell software and get on the GSA Schedule, then government agencies can buy from you without each one of them having a separate contract with you. Actually, it is the GSA that has the contract with you and they are the ones that actually do the buying but it is the actual buying agency that might contact you for the sale.

You don’t have to just sell things. You can sell services also such as printing, cleaning, designing, programming and other services that are routine or maintenance in nature.

The advantage is that GSA does all your marketing and advertising for you. They publish their catalogs for all the government agencies with prices and on their web site. Its like getting listed in a Sears catalog or an ad in the phone book.