Monday Morning Contracting Tips

  • NSPAA
  • Monday Morning Contracting Tips
December 18, 2017 - The Art of Prepositioning
November 20, 2017 - Understanding the Types of Contracts
November 6, 2017 - Bid Or No-Bid?
October 30, 2017 - Large/Prime Contractors for Sub-Contracting Opportunities
September 11, 2017 - Contract Management Key Process Areas
August 28th, 2017 - FedBizOpps
August 14, 2017 - Cost and Pricing
December 18, 2017
The Art of Prepositioning
When a regional crisis develops with the Department of Defense in a remote corner of the world, our nation is ready to take action.  This action is enabled because the Department of Defense maintain a rapid response capability – one that quickly and decisively puts forces ashore in theater to handle a variety of crises.
 
Understanding how the government acquire products and services are important factors to know prior to pursuing opportunities with the DoD and Federal government, this information is critical to properly pre-position your company for success in the government market place, “before the contract opportunity is released”:
  • is there an existing Contracting Vehicle the government plan to use to purchase your product or services
  • during what quarter is the government buying your product or services (identify agency forecast)  
  • under what funding requirements will your product or service be purchase (review agency budget)  
  • is there an incumbent or is this a new requirement or a reoccurring purchase
  • establish teaming and joint ventures for specific opportunities (create these before opportunity has been identified)
  • did that agency meet their small business set-aside goals the previous year and if not which set-aside were they weak
  • who are some of the large businesses doing business with that agency that you can sub-contract with as part of the large/prime business small business program (request for large/prime businesses currently doing business with the agency)  
  • who is the small business representative that can assist you in maneuvering that agency
  • attend outreach events to show an interest in supporting the agency’s goals and objectives  
 
These are just some factors required if you’re intending to pre-position your company for success in the Federal/DoD market.  Those companies who consider these factors are uniquely capable of strengthening their possibilities to secure strategic access to obtain government contracts and defeat competition. Consider Pre-Positioning your company for success.
November 20, 2017
Understanding the Types of Contracts
Understanding the Types of Contracts allows you to respond appropriately to the Contract Type. Types of Federal Government Contracts range from firm-fixed price to cost-plus-fixed-fee. Using a wide selection of contract types provides a needed flexibility in acquiring the large variety and volume of supplies and services needed by the DoD and Federal Government.
 
Fixed Price
  • Firm Fixed price
  • Fixed Price level of effort
  • Fixed price economic adjustment
  • Fixed price predeterminable prospective   
  • Fixed price predeterminable retroactive    
  • Firm fixed price level of effort term   
 
Cost Reimbursement
  • Cost
  • Cost Sharing
  • Cost plus fixed price
Incentive
  • Fixed price incentive
  • Cost plus incentive fee
  • Cost plus award fee  
Other
·        Indefinite delivery
·        Time and Materials
·        Labor hour
·        Letter
·       Agreements
 
Knowing which type a contract brings on the highest risk is also important to you the contactor understanding how to manage each contract type brings value to your company:
1.     Firm Fix Price
2.     Firm Fix Price w/Economic Price Adjustment
3.     Firm Fix Price
4.     Cost and Cost Sharing
5.     Cost Plus Incentive Fee
6.     Cost Plus Award Fee
7.     Cost Plus Firm Fix
8.     Time and Materials  
 
Which Contract Type best fit your pursuit?  
November 6, 2017
Bid or No-Bid?
This is the question that many small business as well as large and prime contractors should ask themselves prior to bidding. What determines whether you should bid or not bid, how should you assess the possibilities of bidding and what are the factors that you should use to Bid or Not to Bid? It is important to establish a Bid/No-Bid process that aligns with your business model. Below is not an inclusive list but a good list to start with to determine to Bid or Not to Bid, there are many things to consider when deciding to Bid or Not Bid.  
 
Using a scale of 1 – 10 (with 1 = none/poor, 3 = fair, 7= good, 10 = excellent) respond to the following questions regarding this bid opportunity:
   1. How well do we know and understand the needs of this customer?
   2. How well does our product/service meet the customer’s requirements and needs?
   3. How well does our product/service compare to our strongest competitor for this contract?
   4. How much influence did we have in the content (product/service requirements) of the customer’s solicitation? 
   5. What’s the likelihood that winning this contract will lead to future work with the customer or other customers?
   6. How well does the prospective contract fit into our line of business and support our marketing and sales strategy and business plan?
   7. If we win this contract, how likely we will be able to provide the product/service with little or no risk to meet technical, management,
       schedule, and price requirements?
   8. How well does our performance in past or current contracts show that we have the resources and experience to perform the proposed
       contract?
   9. What is the likelihood of us having enough time and resources to produce a competitive proposal for this contract?
10.  How likely is our chance of winning this contract with our desired profit margin?     
Bid or No Bid is determined by the score that you receive, 80% or higher is definitely a Go.
October 30, 2017

Large/Prime Contractors for Sub-Contracting Opportunities

Do you want to do business with the government but not sure which approach is the best approach, try Sub-Contracting opportunities with Large/Prime Contractors as your initial approach?

During their early stage many times small businesses face challenges with identifying the best approach to do business with the government.  Small businesses encounter huge challenges attempting to be a prime contractor directly with the government. Many of these challenges results due to lack of past performance, technical capabilities, financial requirements, a clear understanding of how to do business with the government as a prime and a host of other reasons. Small businesses who meet certain requirements should consider identifying the suitable Large/Prime contractor to sub-contract with that’s currently doing business with the government. Identifying the best Large/Prime contractor can also be a challenging task.

Large/Prime Contractors are required to submit a Small Business Plan when presenting a proposal to the government for any contract that they pursue for good and service over $700K and construction valued over $1.5Mil. Marketing your company to Large/Prime Contractors who’s aware of your company’s capabilities and small business set-aside certifications can assist you in obtaining sub-contracts and put you in the driver’s seat to more business with the government.

Here are a few websites that can assist in your efforts to do more business with Large/Prime Contractors for sub-contracting opportunities.

 
September 11th, 2017

Contract Management Key Process Areas, Buyer’s Perspective

It is important to understand what’s going on from a buyer’s perspective so you’re properly prepared during that process. Consider your course of actions during the government’s procurement cycle.   
 
Contract Management Key Process Areas, Buyer’s Perspective
1. Procurement Planning (What are your action items during the Government’s Procurement Planning period?)  
a. The process of identifying which business needs can be best met by procuring products or services outside the organization. The process involves determining whether to procure, how to procure, what to procure, how to procure, and when to procure
2. Solicitation Planning (What are your action items during the Government’s Solicitation Planning period?)
a. The process of preparing the documents needed to support the solicitation. This process involves documenting program requirements and identifying potential sources.
3. Solicitation (What are your action items during the Government’s Solicitation period?)
a. The process of obtaining information (bids and proposals) from prospective sellers on how project needs can be met)
4. Source Selection (What are your action items during the Government’s Source Selection period?)
a. The process of receiving bids or proposals and applying evaluation criteria to select a provider.
5. Contract Administration (What are your action items during the Contract Administration period?)
a. The process of ensuring that each party’s performance meets contractual requirements.
6. Contract Closeout (What are your action items during the Government’s Contract Closeout period?)
a. The process of verifying that all administrative matters are concluded on a contract this is otherwise physically complete. This involves completing and settling the contract, including resolving any open items. 
August 28th, 2017

FedBizOpps (FBO) a great tool, if used properly.

The end of Federal Government fiscal year is upon us, we’ve got a little over 30 days before the government officially shut down its spending for 2017. What could be your next approach? Identify who were the 2017 contracts awardees; maybe there’s some sub-contracting opportunities going in to 2018 that you can support.  You may be asking how do I find those companies who won prime contracts in 2017. Allow me to share with you a few ways of best utilizing FedBizOpps (FBO). There are three tips for researching contract awardees, probable bidders and marketing strategy by showing your interest in opportunities.

1.     Go to FedBizOpps (FBO) and use the “Advanced Search” feature there to look for contract opportunities and contract awards in the NAICS category that describes what you sell (look up your NAICS codes here).   Set whatever date parameters you’d like (FBO will allow you to search back many years).   You also might want to set some geographic limits on your search.   Be sure to select both active and archived documents as well as awards.   After you hit the Search button, you can then sort through the resulting list (which is compiled by most recent contracts back to the oldest).  Drill down into contract awards postings to see which agencies have bought what you sell and who’s won these contracts in the past.

2.     Whenever you go to FedBizOpps and look at an active solicitation, you should get acquainted with using the two buttons labeled: “Add to Watchlist” and “Add Me To Interested Vendors.”    The first one will ensure that you are sent updates on the solicitation.  The second button will add you to a list of interested parties; it allows the contracting officer to assess potential interest in the solicitation, and when the “View Interested Vendors” module has been activated, it allows anyone to see the list of interested parties, along with all their contact information.  Once you register, this is a good way to “see and be seen.”

3.     If the “View Interested Vendors” module in FedBizOpps has not been activated for a particular solicitation, you may wish to email the points-of-contact listed in the posting and request that they activate it so that all may see the list.  Let them know that you are interested and qualified to participate and wish to pursue a partnering arrangement.  If you are a small business – particularly one in a socio-economic category the government gives preference to – be sure to point that out.  Contracting officers will understand that your gaining access to the list could help facilitate small business participation in the contract.

August 14th 2017

Cost and Pricing

FAR 15.402 states that the contracting officers shall purchase supplies and services from responsible sources at fair and reasonable prices. In establishing the reasonableness of the offered prices, the contracting officer shall obtain certified cost or pricing data when required by 15.403-4, along with data other than certified cost or pricing data as necessary to establish a fair and reasonable price or when certified cost or pricing data are not required by 15.403-4. Cost and Pricing has always been a challenge when developing an awarding winning proposal. Many companies have challenges developing Cost and Pricing Model that supports their pricing.

What Cost are considered to ensure the best Cost and Pricing Proposal:

COST

    • Fixed Costs
    • Variable Costs
    • Direct Costs
        • Material
            • Direct
            • Indirect
          • Raw
      • Labor
          • Direct
        • Indirect
    • Indirect Costs
        • Material Overhead
      • Labor overhead
    • General and Administrative (G&A) Costs (Can be considered as Indirect Cost)
  • Profit
    • In the government world, profit is both good and necessary. FAR 15.404 states that it is in the government’s interest to offer contractors opportunities for reasonable profit. Profit stimulates efficient contract performance, attracts the best capabilities of qualified business concerns to government contracts, and maintains a viable industrial base. The main factors that influence profit are 1) competition 2) objectives of business 3) necessary investments and 4) risks involved. If profit is calculated too high, it could remove your Cost Proposal out of the competitive zone.