4 Main Focuses to Maintain a Government Contract

The coveted government contract is what many contractors strive for but rarely are contractors ready to handle the administrative tasks associated with delivery.

Here are the 4 main focuses to maintain a government contract.

1.      Credibility

2.      Predictability

3.      Transparency

4.      Consistency

Later we will discuss the pitfalls of government contracts, and there are pitfalls. Some easy solutions to those pitfalls but a need to be concerned is valid. I’ve seen many contractors struggle with the four main focuses and the pitfalls.

Credibility

Unfortunately, the burden of credibility falls on the contractor completely. Only because your organization values the steady month-over-month service payment. Even if the client is a beast to handle and should probably be passed up. The advantage of having a government body client adds to your cash flow.

Credibility comes in two forms, credibility to complete service contract, and credibility to not belly up because of underfunded or underinsured.

Credibility to complete service contract is the headache all government entities wish for; the contract holder is most likely over always overworked and under scrutiny. Signing a contract is both a blessing and a nightmare on that person’s shoulders. Reducing this stress will make you a hero contractor.

Credibility to not belly up because of underfunded or underinsured situations, this one can black mark you in the industry. Failing to keep this portion of your business in tip-top shape with secure credibility amongst those looking for bidders. This hurdle usually manifests itself at the midpoint of a contract, usually from front loading the beginning of the contract with the intent of securing the friendship quality. Contractors, watch out for this when bidding. Either add in the proper increases with CPI figures plus you increase of administration fees or track your own overhead multiplier.

Tips to avoid this funding issue – Work with a credit consultant (like J. Galt) to help the small business entrepreneur weather any late payments to vendors or from clients. Most non-government clients pay within 30 days, but government contracts can take upto 90 days due to the paperwork shuffle. Having a high business credit can help you negotiate short-term loan agreements.

Predictability

Social scientists love to think the world and the minds of others can be ushered into norms and predictable scenarios. There is some credibility in those theories, however predictability has many situations to focus on but here are two, the client asked for this (or that) and you said “yes” (for this amount). Government organizations hate changing this, or asking for more money, and here’s why – it takes an enormous amount of time and approvals to get the “yes” to proceed. Mostly because the scrutiny from oversight is so large with respect to using public dollars for anything.

So here is the warning – if you are going to lowball a contract just to get a foot in the door be ready to fight tooth and nail if you want more from the client. Also recognize the tarnish on your armor when that happens. Augmenting your social presence to combat any tarnish and/or sales target would be beneficial with having your marketing staff learn affiliate marketing to learn the benefits and how-to to gain social leverage in these situations.

Nirvana Approach!

When sending in the sales/bid documents be cautious about selling the “Nirvana Approach” (actual outcome vs. the ideal but unattainable alternate outcome) (Wolf, 2004). Within your documents avoid subjective language that might be seen in every other bid document, instead give sound evidence as to why your price is what it is. Government entities do not always go for the lowest bidder but keep that pencil sharp just the same. Stay competitive.

Transparency

Be ready at any time to share documents, yes there is the Freedom of Information Act, and your HR/Business Manager should know the regulations of what is allowed and not. In that vein transparency helps with the other 3 categories. Transparency can also come in many forms, for instance if you’re a service provider be clear on what the outcomes should be and that should be listed in a Service Agreement, not the Request for Bid documents as I have seen too often. Within the Service Agreement should be metrics that have to be hit and items that must be provided daily/weekly/monthly/year/etc. and without this the credibility/relationship credential will be put to the test.

This is however the extra administration tasks that must be factored in the bidding process and too often I see these moments are not included so other services go untended to make up time for the others. So be ready to share schedules, work logs, pay documents, manpower figures (if your contract is for manpower).

Tip for smooth communicating – having a process for gaining materials, and approvals, will aid in supporting front line managers when working with clients.

Consistency

If all the above 3 are going well then, this one is most likely going to be fine. Service Agreements are great that way, they give each side a place to start with when something is not attended to, or conditions change.

The two side of the coin – the “if” scenarios

If your company is heavy on relationships and wants to avoid contracts, government contracts will pose a difficult situation. However not completely undoable, working in and on government facilities will need constant socialization to create that relationship.

If your company mostly completes work out of sight of staff, then diligent consistency to perceived results will be necessary and the moment that areas or details are not attended to will spring up fast. Keep the Service Agreement handy.

Bibliography

Wolf, M. (2004). Why Globalization Works. Yale University Press.