With apologies to Yogi Berra, there’s so much buzz over new contracts coming soon from GSA, NIH and other government agencies contractors could be forgiven for thinking that none of their customers use Multiple Award Schedule contracts anymore.  The numbers, however, make it abundantly clear that Schedule contracts remain an important piece of a company’s overall federal business strategy.  Schedule contracts topped $34 billion in business in FY’20, with final numbers likely being way higher.  Leading the way are IT contracts, formerly classified as Schedule 70.  Think NASA SEWP had more business?  Think again.  Over $18 billion in IT sales went through GSA Schedules last year.  In boxing terms that translates into “the winner and still champion” of Indefinite Delivery Indefinite Quantity (IDIQ) contracts.  Indeed, some contract vehicles that are classified as separate programs by industry analysts are, in fact, Schedules-based Blanket Purchase Agreements (BPA’s).  The Schedules program may not get the buzz of other contracts because it is perpetually open to new offers. Even some in GSA can get caught by the siren songs of other contracts or buy into the decades-old saw that Schedule prices are “too high”.  In this time of advanced data analytics and instantly available commercial pricing information, though, that saw has pretty well lost its teeth.  Federal customers rely on the program to meet a vast array of needs, including important market segments where there are no other IDIQ’s from which to purchase.  The Schedules are also the only contracts open to state and local government use.  Simply put, government buyers at all levels would have a significantly harder time meeting critical mission needs if there was no Schedules program.  Look beyond the headlines and you will see a program that serves customers, small businesses, and taxpayers well.  Contractors should plan their approach to the public sector market accordingly.

Although some in government insist that “the government is one customer”, experienced contractors know that federal business success requires a variety of approaches depending on what you’re selling and to whom you are selling it.  The approach a company uses to sell to a large agency may be very different than that for a smaller or independent government customer.  It’s even true that a successful program for Navy business will differ from growing sales to the Army.  Research and relationships are key to creating a business plan that will have the best chance to drive business with diverse customers.  That’s one reason why many contractors focus on a handful of potential customers, especially when starting a federal program.  They realize that few companies can develop the expertise needed to sell across the entire federal spectrum overnight.  Similarly, many a contractor CEO has also told us that federal business is not a “go it alone” proposition.  Developing a base of experienced partners with complementary capabilities, and often varying business sizes, is essential to sustained business growth.  So, too, is working with experienced market researchers, contract consultants, and even attorneys.  There is no reason to try and “reinvent the wheel” of federal success when knowledgeable partners are readily available.  Partners can significantly reduce the amount of time and effort it takes to grow a successful federal presence and help keep you away from falling off the compliance cliff.  Your wardrobe isn’t one size fits all, even after a year of working at home.  Neither, too, should be your approach to the federal market.

A Facebook friend of ours recently wondered whether the government could accept free services to complete and repair the border wall along the US southern border. Although there are many angles to this issue, strictly speaking from a procurement perspective, the answer here is probably “no”.  The federal government cannot usually accept free services and goods.  This prohibition dates all the way back to the late 19^th century when Congress passed the Anti-Deficiency Act.  The simple intent was to prevent people or companies from providing something of value for free and later submitting a claim, thus busting an agency’s budget and requiring additional appropriations from Congress.  Like most government rules, however, there are exceptions.  One is in the case of a true emergency involving “imminent” danger to safety of human life or the protection of property.  This exception has been discussed frequently over the past year given that President Trump declared a national emergency over COVID-19.  Other exceptions are also tied closely to public health circumstances involving the military or the Public Health Service.  Outside of these areas, however, contractors cannot offer something for free unless they expressly agree to do so in writing via a contract.  For GSA Schedule contractors, however, this does not mean that the government doesn’t want to know about free services or goods you provide in the course of your commercial business.  Although the government may not be able to accept them, GSA rules state that contractors must disclose them so that the government can take advantage of lower overall prices.  More than one company has found out the hard way that “free” can cost you something.

The IT Modernization Fund will end up getting its $1B infusion after all.  Efforts of senior administration officials, coupled with specifics on where the money will be spent, were enough to overcome Senate doubters.  The $1B is part of the $1.9T COVID relief package.  $650 million of the money is going straight do DHS for cybersecurity projects.  The Cybersecurity and Infrastructure Security Agency will oversee the distribution of that money.  $200 million will go to the US Digital Service for various IT projects, with the remaining $150M headed to the Federal Citizens Services Fund.  The IT Modernization Fund is a type of revolving account, meaning that agencies will have to pay that money back to the fund via realized savings.  Other agencies will then be able to apply for fund dollars for their own projects.  The directed spending approach, however, may be an indication of how the fund will receive additional money in the future:  specific projects up front, with re-paid funds available for others later.  While it is too soon to tell what extra money might come, it is worth noting that the Biden administration has already indicated support for as much as $9 billion for it.  Contractors should reach out to the three initial agencies receiving funds now.  While some of the cyber money may be spoken for, contractors previously played an important role in shaping project proposals seeking fund money.   In addition to the funding for the TMF and other cybersecurity and IT initiatives, the Senate bill included the extension of the Section 3610 authorities to let agencies pay contractors if they cannot work during the pandemic. 

Federal government contracting is not a “reinvent the wheel” business.  Here are three mistakes others have made so that you don’t have to:  1.  Trying to be everywhere at once:  Many contractors, and not just new ones, are overwhelmed by the size of the federal market.  They reach out to as many agencies and departments as possible, but don’t take the time to learn about any in detail.  This is a recipe for frustration, not to mention uneven sales.  A focused approach to the market works best.  Not even the largest contractors try to be everywhere at once.  Pick a small set of initial targets, get to know them, and then spread out slowly from there.  2.  Trying to do it all yourself:  Experienced, successful contractors acknowledge that federal business is not a go-it-alone business.  You need help, whether its sales, marketing, compliance, or contracting assistance.  Remarkably, some companies know this at first and then slowly morph to a “DIY” attitude.  Look, trying to wear too many hats will not only cause them to fall over, but you will, too.  Get help when you need it.  It’s not a sign of weakness, it’s a sign that you take sustained growth seriously.  3.  Failure to do proper research:  You’d be very surprised at how many contractors get into a meeting with a prospect only for the prospect to say 5 minutes in, “You know we just brought that solution last week?”  Your heart sinks as you realize you’re not only wasting your time, but the prospect’s.  Make sure you know what’s happening in the agencies you target.  Be ready ahead of time to engage on upcoming needs and help define them.  Also, while everyone likes to sell a prospect “something they don’t even know they need”, using that as your entire government approach likely won’t end well, either.  Federal agencies generally have a good idea of what they need and, more importantly, what’s in their budget.  There’s always an opportunity for something new, but, more often, its better to know what your customer is looking for and try to fulfill it.    Have other “would you believe?” stories?  Send them along at info@allenfederal.com.