Slide 1 This workshop is brought to you in cooperation with the Maine Small Business Development Centers. Slide 2 Welcome to the Government Contracting primer presented by the Maine Technical Procurement Assistance Center, Your Gateway to Government Contracts. The Maine PTAC’s strength is assisting you with opportunities to sell your product or service to the federal government. Many small businesses aren’t sure where to begin when they start working with the federal government. The Maine PTAC has experienced counselors that can guide you through the requirements of getting started with government contracting, counsel you on strategies that you can take to sell to the government, and provide you with free Bid Matching service. Maine PTAC can also help you understand the buying process that the State of Maine follows when it seeks bids on construction projects, services and supplies. Our free bid matching service will put you in touch with State requirements and many Maine municipal requirements as well. Slide 3 Government contracting on the federal, state and local levels has provided many lucrative opportunities for small businesses throughout the state. Here are just a few examples: In just two to three years, a Westbrook construction company has grown its government contracting business from zero to over $4million in sales revenue. A small market research firm in South Portland is growing its revenues by 20% per year from Maine PTAC emails. A qualified small landscaping business in Southern Maine worked to get SBA certified 8a and is now getting more federal subcontracting work. A service disabled veteran used his years of experience to start his own construction business and capitalized on the growing opportunities for service disabled veterans in federal contracting. He earned his first contract this past summer. These are just a few of the success stories of Maine companies who were diligent and persistent in researching, qualifying for, and winning government contracts. Slide 4 Here are some of the topics we will discuss. What is government contracting? How does the government buy? Is government contracting right for you? What are the government requirements? Are there opportunities for you and how can you find those opportunities? and Where to get assistance. Slide 5 Governments of all shapes and sizes need to purchase goods and services to keep running, and there are opportunities for small business at every level. In this presentation we will first look at contracting on the federal level, the United States Government. Then we’ll discuss contracting with the State of Maine. And last, we will look at selling to municipalities on the local level. Slide 6 The U. S. Federal Government is the world’s largest market place. There are not many products or services that the federal government does not buy. In Fiscal year 2005, the federal government wrote over 10 million contracts for products and services, representing about 400 billion dollars, with small businesses receiving a record-breaking $79.6 billion in federal prime contracts. This exceeded the statutory goal of 23 percent of the total government purchases according to the U.S. Small Business Administration. Like giant corporations, governments have constant needs for products and services to keep them running, and needs reliable suppliers and vendors to provide for those needs. Every 20 seconds of each working day, the Federal Government awards a contract and about 95% of these contracts have potential for small business. Right now, small businesses are eligible for $340 Billion in Federal contracting dollars, but finding, and pursuing these opportunities can be challenging. The Maine PTAC can help you navigate the government procurement process to increase your business and find new and exciting opportunities with the government as your customer. Slide 7 Currently the Federal Government has goals set up to help small and disadvantaged businesses. Although, just because you are a small or disadvantaged business does not guarantee you will get the contract, because this is a competitive process. It does help to level the playing field for small business and assures that these contracts are not single sourced year after year to large companies. The current goals are as follows: 23% to small businesses. 5% to small disadvantaged businesses for prime and subcontracts. 5% to small women-owned businesses for prime and subcontracts. 3% to HUBZone small businesses. 3% to small service-disabled, veteran-owned businesses for prime and subcontracts. Its important to know that these are goals and not quotas. This means that agencies must TRY to meet these figures, but are not strictly required to. As in any commercial setting, contracts are awarded on price, quality and performance. These are not handouts or giveaways. Slide 8 Many small businesses question whether they are “big” enough to have the government as their customer. Companies with as few as five employees, and some companies that have only one person in their entire operation have been awarded a contract. In one case, a government contract kept the owner busy for an entire year and amounted to his total year's salary. Slide 9 Any business, regardless of size, has the potential to get a contract with the government. But companies that have the best chance are any business that sells a product or service and are: Responsible. Competitive. Patient in dealing with the bureaucratic process. Committed to applying the resources that are needed to market to the government. Technologically proficient and adaptable to new business models. The government is no different than many other customers. They expect the product or service to be of great quality, at a fair price, and a supplier that will stand behind their product. Companies that can effectively manage the government procurement system can find that government contracts provide a significant part of their business revenues and, in some cases, are highly profitable. Slide 10 So, what kind of contracts are awarded to small businesses? Well, here are a few examples. A junkyard owner near an Air Force base won an award to supply junk cars so Air Force personnel could train for rescue operations with the “jaws of life”; an artist in Oregon won an award for painting a variety of subjects; and a small three-employee business grosses about $1 million a year from selling fasteners. There are an unending number of stories about small and very small companies selling their products or services to the government. These businesses have focused on what the government needs and have actively pursued that market. Slide 11 Ok, so they found opportunities, how do you find yours? Start with finding your North American Industry Classification System (NAICS) number. To do this, go to http://www.census.gov and click on NAICS in the Business & Industry section. The easiest way is to do a keyword search on the type of business (i.e., electrician or snow plowing). There may be multiple numbers for your type of business, so make sure you get them all. Then go to http://www.fedbizopps.gov to see you if you have a product that the government is looking for. These needs change over time, though, and so if you find there is not a need for your product or service at this moment, there might be demand in the future, so check back from time to time. Another way to find opportunities with the government is to sign up for the Bid Match Services through the Maine PTAC. The Bid Match Service uses your bid profile to match your company federal, state and local contracts that come up for bid. If an opportunity does come along that matches your company’s profile, the Bid Match Service will notify you automatically. In 2006, Maine PTAC clients reported receiving almost 1700 Prime and Subcontract awards worth over $123 Million. Though, selling to the government is not for everyone, such success proves that including the government market as part of an overall business strategy can be a good way to level out or grow your business. Many Maine companies, perhaps similar to yours, are making the government their customer. Slide 12 Once you feel confident that the government procures your product or service, you can find out just how they buy the kinds of things you sell. Perhaps, the most familiar way that the government buys is through a Bid process. Federal purchases that fall between $25,000 and $100,000 are set aside for small business and these bids must be posted to FedBizOpps. The government also buys off an electronic catalog of approved buyers. Federal procurement officers must check this source first before they put things out for bid. If they find a vendor listed here, they do not place a contract out for bid. They simply place the order with the listed vendor. This electronic catalog is operated by the General Services Administration, and being part of it is called, “getting on the GSA Schedule”. If you find out that the government most often buys your product or service by using the GSA Schedule, then you should work with the Maine PTAC to get your company on the appropriate schedule. In addition to accepting competitive bids and using the GSA Schedule the government uses credit cards to purchase some goods and services. The government can buy items or services up to a limit of $3,000 by using what they call the government IMPACT card, and an average of 70,000 transactions are placed this way EACH DAY. This accounts for almost $18 billion dollars of purchasing power every year. Government employees prefer using credit cards to buy the goods and services they need because the paperwork is minimal and they buy almost anything this way as long as it is under the $3000 dollar limit. To take advantage of IMPACT card purchases, your company has to be able to accept credit cards, of course, and have a merchant account. Here are a couple of examples of how Maine companies have found and landed government contracts. A small Maine construction firm was awared over $12 million in government construction projects and most of that business was found on bid announcements. On the otherhand, an IT company received many of its $370,000 in awards from being on the GSA Schedule. Credit card purchases are much harder to track, but based on the large number of transactions and the ease of use for government employees, its clear that being able to accept credit cards can be beneficial in pursuing this market. Knowing how the government buys will help you target your time and resources. Slide 13 We need to talk about a few things the government will NOT do. The Government will not finance your contract upfront. You must be able to handle accounts receivables like you would with your commercial customers. After you are awarded a contract, you must satisfy the requirements and get the job done before you will be paid. If you need financial assistance, you will need to speak with your banker to arrange a loan, or line of credit. If your company is in financial trouble, pursuing a government contract will not save you. In fact, a contract might push you over the edge and put you completely out of business if you cannot fulfill its requirements. This again, is no different that taking on a large responsibility in the commercial market. Slide 14 Doing business with the government requires that you have a stable business, are financially sound, well organized, have a quality assurance program and are able to do electronic commerce. Don’t expect to be awarded a contract if you are having major cash flow issues, you are unable to pay your bills or if you are not keeping up with the paperwork. Quality assurance can consist of a simple quality assurance manual or a fully recognized government or international ISO standard. This will depend on the contract you are pursuing and the type of work you will be doing. Its essential that your company is capable of doing business using some kind of electronic commerce (e-commerce) or electronic procurement (e-procurement). This is a mandate of the Government Paperwork Elimination Act of 1995, requiring the government to use electronic means to issue and award small business contracts, specifically those between $25,000 and $100,000. In a continuous effort to streamline the procurement process, government buyers are using new options in making purchases, such as multiple-award schedules, purchase cards, reverse auctions, etc., almost all of them technology-based. Many small businesses are still coming up to speed with computer technology and online purchasing. E-procurement takes many forms – portals, web based forms, electronic document management systems and so on – be ready to do business electronically. This type of requirement is not unique to the government, as almost all major corporations now require this type of system from their vendors and suppliers. Slide 15 The financial situation of your business is very important in your decision to pursue doing business with the government. If you are just starting out and short on cash, or having problems with payroll and other payments, government contracting is not for you. The government will not guarantee your success or bail you out. Some small businesses will partner with others to win government contracts or find the prime contractor of a major project and subcontract their services. This allows smaller companies who may lack certain resources to pursue opportunities they otherwise could not on their own. Partnering can also help spread the workload and ensure that you are not taking on more than you can handle. Slide 16 Getting Started: All Federal contractors are required to first get a Data Universal Numbering System (DUNS) number. It is free of charge and it is assigned by Dun & Bradstreet. The DUNS number is a unique 9 digit identification number for each physical location of your business. To get this number, it is easiest to call 1-866-705-5711 and ask for your number, but you can go to their website at https://smallbusiness.dnb.com/ and apply online. With Dun & Bradstreet’s DUNS number you can begin the process of getting started as a federal contractor. Slide 17 Once you have your DUNS number, you must be registered in the Central Contractor Registration. You will need to go to the website www.ccr.gov. and click on Start a New Registration. The registration will populate much of the company information that you have submitted to Dun & Bradstreet when you obtained your DUNS number, but you will also need to supply your Tax Identification Number (TIN), this can be your IRS Employer Identification Number (EIN) or your Social Security Number (SSN) - an EIN is preferred - and other company related information. The Business Information that is asked for is about the type of product or service that is being supplied, as well as any socioeconomic characteristics of your company. For instance, whether your business a small woman owned company, or if you are a service disabled veteran. Because the government will pay you electronically if you get a contract, some banking information will be required. This is a secure database so this information is tightly controlled. Lastly, you will be asked for points of contact for people in your company. If you have any trouble with registration, counselors at the Maine PTAC can help you. Slide 18 The Maine PTAC offers to all Maine businesses the opportunity to have a free Bid Match service to get the postings from FedBizOpps as well as other federal websites, State sites and the cities and towns of Maine. This will benefit your business by seeing government business opportunities in a timely fashion, delivered to you daily through e-mail notification. You may also find the bid, RFP and award postings a source of market information that you could use in the future. Slide 19 Now let’s take a look at contracting at the state level. As with the federal government, the State of Maine buys a variety of goods such as automobiles, food products, equipment , office Supplies, furniture and many professional services such as media services, consultants, environmental services and others. If the service request is over $10,000, an RFP (Request for Proposal) will be issued to get the best value to meet the requirements. Slide 20 To begin selling to the State of Maine, you should become familiar with the Division of Purchases’ website. The Division of Purchases has transitioned to a new integrated system for its procurements called AdvantageME. Potential vendors will need to be registered in the Vendor Self Service (VSS) section of the site. The VSS system will then automatically generate an e-mail message to alert you of the opportunity that fits your NIGP code. The NIGP code is descriptive coding structure to identify and describe a wide variety of products and services. You can register as a guest but you will need to input your Tax ID (EIN or SSN) and Company information to complete your registration. Many Maine companies start with selling to State government agencies to build up a past performance record before they pursue federal government procurements. Slide 21 Let’s not overlook selling to municipalities, local towns and cities. Though these can be challenging in that they are geographically spread out, the paperwork is substantially less burdensome. Many local bids fall into certain categories such as building construction, maintenance, supplies, commodity products and road repair. If your business sells these kind of products, the local market may be just right for you. Slide 22 Many towns will post their requirements on a website, or at the town office. They also may have a vendor list or they may advertise in the newspaper. The Maine PTAC’s Bid Match Service lists many of these requirements as well. There may be opportunities at the federal and state level, but also in your own backyard. A Bid Match Service is the best way to stay up with all opportunities. Slide 23 Let’s summarize the requirements: Federal: Know your NAICS codes. North American Industry Classification System. Establish a Dun & Bradstreet (DUNS) Number. The Data Universal Numbering System (DUNS) number is a unique nine-digit number that identifies your business. Register in the CCR Database. Central Contractor Registration (CCR) is the Federal Government's single collection point for vendor information.   Establish a QA Program You should have a documented Quality Assurance/Quality Control Plan in place that complies with a recognized commercial quality standard, a government standard, or the international ISO standard for your industry. You must be organized, maintain accurate records and document relevant transactions and meetings. Use Electronic Commerce (e-commerce) The government now uses electronic means to issue and award contracts between $2,500 and $100,000. Consequently, you must have a personal computer, a modem of 56K or better, a dedicated phone line, and connection to the internet. State of Maine: Learn about the Division of Purchasing. Register with AdvantageME. Know your NIGP Codes. National Institute of Governmental Purchasing Code. Local or municipalities: Usually, much less paperwork, but may be spread over a wide geographical area. Register with those municipalities that maintain a vendor list. Obtain the Bid Match service of the Maine PTAC to get the local bids Slide 24-26 (Quiz) Slide 27 This workshop briefly touched on some key aspects of marketing to the government. For more information on: One-on-One Counseling. Matchmaking / Subcontracting. Bid Match Services. GSA Schedule Assistance. Training Workshops. Federal Marketing Analysis. NSN Procurement Histories & Military Specs. Certifications & Registrations. Technology Transfer & Federal R & D funding. Or just general questions about government contracting… Contact the Maine PTAC at one of their convenient office locations in Portland, Saco, Bath, Waterville, Bangor or Lewiston. A trained government contracting counselor will be able to answer your questions and to help get you started. Or go to the Maine PTAC’s website www.maineptac.org. Remember, every 20 seconds of each working day, the Federal Government awards a contract. Take the first step in making the government your customer, contact the Maine PTAC today. Slide 28 Contact us at (207) 942-6389 or visit us online at http://www.maineptac.org.