(3) Be patient and manage expectations for growth through Federal Government contracts.
Many companies starting out in the contracting business begin by targeting the Federal Government market as their first leads. Unless these leads bring in business through small purchases (which can be procured more rapidly than larger contracts), then the wait for revenue from Federal Government customers may be quite prolonged. That’s why many government contracting counselors recommend that small businesses develop and maintain a portfolio of both commercial and Federal Government customers to ensure growth through commercial contracts while developing and nurturing relationships with the Federal Government and awaiting bid opportunities and contract awards.
When targeting Federal Government contracts, keep in mind that the procurement cycles for large contracts can be extremely lengthy. When tracking opportunities such as expiring contracts, for example, the Government may begin its market research up to two or three years ahead of current contract expiration. This requires not only patience, but persistence, as well as the proper investment in time and resources (see the #1 BD Process Improvement lesson learned), to submit responses to Sources Sought Notices (SSNs) and/or Requests for Information (RFIs), follow up with the Government, monitor and track the procurement status, and begin to position your company to bid and win (this is the essence of capture management).
New Federal Government requirements also may require long procurement timelines, sometimes several years, from the introduction of a draft Performance Work Statement (PWS) or Statement of Work (SOW), to the release of one or more draft Request for Proposal (RFP) documents for industry comment, through culmination of an Industry Day event and final RFP release. Then, once proposals are submitted, it could take up to over a year – sometimes two years – for the source selection process to result in contract award.
While these are somewhat extreme examples of Federal Government procurement timelines, it is important for Federal Government contractors to understand the reality of expected revenue generation from this type of business. That’s what makes pipeline management so important for revenue projection based on RFP release date and award date for Federal Government contracts, and it’s why a heavy investment in resources is needed way ahead of contract award to be successful. Having patience can pay off, since the return on investment in Federal Government contracting can be very high.