The Three Rules of The New Government Contracting
Everyone knows about the three rules of buying real estate: location,
location, and location! And in law school I learned that likewise
there are three rules of practicing law: preparation, preparation,
and (more) preparation. Well, there are also three rules for businesses
engaged in government contracting. They are, in order of importance,
as follows: marketing, marketing, and (more) marketing.
Thats right marketing is king these days. Marketing
rules. If a business doesnt actively, aggressively, and
continually market to government customers, some other contractor
will, and that other contractor, more likely than not, will be
the one getting the sale.
It wasnt always this way. When I first started practicing
government contracts law, the three rules of federal procurement
were: win the contract, win the contract, and win (more) contracts.
Getting the contract was key. If a bidder got the contract, it
got the sale. Getting the contract was 90 percent of getting the
job done.
Nowadays, getting the contract isnt a big deal. Everyone
already has one or more contract vehicles to offer an agency:
GSA Schedules, Blanket Purchase Agreements (BPA), and Indefinite
Quantity, Indefinite Delivery (IDIQ) contracts. These days, the
agency expects that a vendor already has a contract vehicle in
place. And with smaller procurement staffs to work with, contract
shops understandably prefer to work with suppliers that already
have contract vehicles in place. After all, why shouldnt
an agency favor vendors who make it easy on it to buy and allows
the agency to avoid the rigors of a full blown competition?
The new procurement regulations put into place over the past few
years have radically changed the way the government buys goods
and services. No longer does an agency publicize most of its procurements
in the Commerce Business Daily (CBD). Instead, those procurements
are placed under GSA Schedules, BPAs, or IDIQ contracts that do
not require advertisement of either the procurement opportunity
or notice of award.
GSA Schedules have blossomed in this looser environment. GSA estimates
that sales under its Schedules will increase from $2.5 billion
to $4.5 billion in 1998. GSAs Information Technology (IT)
Schedule, its biggest, now offers leasing, training, and support
services in addition to hardware, software, maintenance, and repair.
GSA now encourages agencies to place BPAs under GSA Schedules,
making Schedule sales that much easier. GSA also enables the formation
of Teaming Agreements among two or more GSA Schedule contractors
to offer complete Schedule solutions to more complex needs.
Gone is the Maximum Order Limitation (MOL). In its place is the
Maximum Order, which is just the figure under which a Schedule
contractor must accept an order at its Schedule price. Agencies
are allowed to place orders above the Maximum Order and to ask
contractors for even greater discounts. The sky is the limit for
the total GSA Schedule order amount.
Price reductions have been eased under GSA Schedules. No longer
will a reduction to one agency require a similar reduction on
all other sales. Instead, spot price reductions are allowed and
encouraged.
While IDIQ contracts are still announced in the CBD and competed,
multiple awards of IDIQ contracts are now favored under statute.
Once those IDIQ contracts have been awarded, the agency will generally
look only to those IDIQ contractors for goods and services covered
by that vehicle. Vendors not having an IDIQ contract are left
on the outside looking in.
Streamlined procurements for commercial items are now authorized
that allow an agency to combine its CBD notice with the solicitation.
No other documentation other than the combined notice/solicitation
is issued. Offerors must respond within 15 days to the notice
to be considered for award.
Times have changed. A government contractor that relies on an
agencys bidders list or that waits for procurement notices
in the CBD will quickly go the way of the dinosaurs to extinction.
These are the days of marketing, marketing, and (more) marketing.
Get to know your government customers, your agency users, and
your contracting specialists. Get the word out about your company.
Get moving, and dont stop.