The following is a reprint from a white paper produced by the Washington Management Group. Since I just wrote about the changing federal contracting scene, this reprint provides one aspect of competition for contracts that may be helpful to some. Our firm subscribes to their FedSources/Input services. Our firm has a GSA Schedule that was drafted by our Senior VP and reviewed by a GSA consulting firm before we submitted the application. Our Schedule was awarded 30 days after submission -- an exceptionally short turnaround period.
The Truth About the GSA Schedules Program
The Washington Management Group dispels ten myths about securing and maintaining your schedule contract
The U.S. government is the No. 1 consumer in the world. As a result, a growing number of companies are looking to sell their services and products to the government.
In order to do that, many are pursuing a GSA Schedule Contract. While the GSA Schedules Program is one of the most effective ways to sell to the government, there is a lot of misinformation out there, and a lot of misperceptions, about getting a Schedule contract.
For example, be careful about how you define the word “success”. Many companies claim high success rates in getting their customers a GSA Schedule Contract. Merely getting a contract does not constitute success – a contract that is mired in compliance restrictions and cut-rate pricing may do more harm than good. To land an effective contract – one that will help secure more government business and reduce your contract risk – it is important to understand what is involved, what is true, and what is false.
10. Any company can get on the GSA Schedule. False. To get a GSA Schedule contract you need to have established commerciality for the services or products that you intend to offer to the government. This may require two years of successful project related experience for GSA approval. You also need to register on a number of government websites and receive a satisfactory response to reference checks before you can secure a GSA Schedule contract.
9. It helps to submit a GSA Schedule offer myself. False. There are companies that do construct and submit their own offers that result in a GSA Schedule contract award. Like doing your own taxes, however, if you submit your own offer you run the risk of missing opportunities to get yourself a better deal. Bear in mind that this is a five year, legally binding contract. Many companies outsource this to minimize risk and maximize value.
8. If I use a GSA Schedule consulting firm, there is a 100% success rate. False. This goes back to our opening warning to be careful about how you define “success”. You can have a successful contract submission – deemed “a success” by some companies – but come back with an unsuccessful GSA Schedule contract, because of aggressive pricing, broad definitions to compliance issues (like Basis of Award, or BOA), etc. The true definition of success is a low-risk contract that helps you increase government sales.
7. Every offer submitted results in a GSA Schedule contract. False. The rejection rate at GSA has remained steady at approximately 45%. Common causes of rejection include administrative errors, missing portions of the supporting documentation, unsubstantiated pricing, and improper submittal format.
6. Offering a cut-rate price means a successful GSA Schedule contract. False. Pricing is an important factor in any business deal. But, providing cut-rate pricing does not mean you’ve secured a “successful” contract. Instead of only looking at the numbers, a more realistic assessment for success is pricing that allows you to have acceptable margins, and terms and conditions that reduce your risk over the life of your GSA Schedule contract.
5. A GSA Schedule has minimal impact on my commercial business. False. Even though it is a government contract, it does have an impact on your commercial business. One key area of contract compliance is your defined Basis of Award (BOA). Having a BOA that is aligned with your commercial sales practices is critical for GSA Schedule holders.
4. It is a good idea to put all of our products on our GSA Schedule. False. You should be cautious when you analyze and decide what to put on your GSA Schedule. One reason is the Trade Agreements Act (TAA), which may exclude some of your products from being sold on a GSA Schedule if they are manufactured or built in certain countries. Another area of potential compliance concern comes if any of your commercial products are prone to significant price fluctuations based on commercial sales. These may be items like “loss leaders” or even “giveaways” used to get follow-on business.
3. Getting a GSA Schedule in 30 days is realistic. False. From initial effort to award, a quality GSA Schedule contract will take three to six months to secure, depending on the Schedule. There has been an influx of offers in several Schedule centers resulting in extended timeframes of six to nine months. A sense of urgency is good, but a quality GSA Schedule contract will be much more effective in the long run.
2. A GSA Schedule contract guarantees you government business. False. With the GSA Schedule program, as in life, there are no guarantees. Having a GSA Schedule contract validates you as a qualified supplier to the U.S. government. It provides a “seal of approval”. To get business, however, you must market and sell your services and products as you would to secure business in any other market.
1. It is all right to have a GSA Schedule contract and sell nothing. False. Having a GSA Schedule contract and selling nothing is not a good situation. When you receive your contract, you are expected to sell at least $25,000 in the first two years and $25,000 per year, as long as you hold your GSA Schedule contract. Selling nothing over several years puts you at risk of losing your GSA Schedule contract.
Conclusion
Although there are some similarities, there are also many differences between the government market and almost any other commercial market. The government market may requires that a contractor maintain special infrastructure, resources and internal support to assure contract performance. Unique government contract compliance requirements mandate transparency and oversight. In certain instances, the government has the right to audit and assess penalties for non compliance. Ultimately, as the largest consumer of services and products in the world, most companies that are successful understand these requirements and deal with them.
Getting a GSA Schedule contract in order to break into the government market may be one of the best business decisions you make. To be successful, however, you must understand the process – and the level of commitment – involved in pursuing that contract. You must understand the facts and be able to weed through the hype and the myths. Once you do that, you’re well on your way to working with one of the largest customers in the world.
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