Can you win without past performance?

The answer? It depends…

The government is extremely risk averse. For that reason they rely heavily on past performance in making award decisions.

What can a company without past performance do to win a contract? Is it even possible?

Maybe. Like everything else it depends on getting all the dominos lined up just right to win.

Here are a few things to thinks about.

What do you sell? Is it a commoditized product or service where there
is very little difference between you and everyone else who sells the same thing.

In this instance, you may be able to win on price because there shouldn’t be a basis to pay a price premium. If that’s you – ok use it to your advantage. But beware that you’re only a winner until the next newcomer with no past performance undercuts your prices.

Who knows you? Do you have relationships with government decision makers or those close to decision makers? What about relationships with other government contractors?

The more people you know – and who are willing to advocate for your competency – the easier it will be to overcome the government’s skepticism about awarding contracts to companies without past performance.

What have you done – in past careers, businesses or jobs – that might make the government sit up and take notice? The regulations allow agencies to consider similar success in a past performance evaluation.

However, they are NOT required to do so. This means that you will likely need an insider advocating for you – or a very compelling story.

Can you partner with a subcontractor and use their past performance to alleviate concerns about the risks of awarding to you?

Again, the answer is it depends. There is a new SBA regulation at 13 C.F.R. 125.2 says:
Capabilities, past performance, and experience. When an offer of a small business prime contractor includes a proposed team of small business subcontractors and specifically identifies the first-tier subcontractor(s) in the proposal, the head of the agency must consider the capabilities, past performance, and experience of each first tier subcontractor that is part of the team as the capabilities, past performance, and experience of the small business prime contractor if the capabilities, past performance, and experience of the small business prime does not independently demonstrate capabilities and past performance necessary for award.

As you can see, this regulation is rather limited. It applies only when four factors are met: (1) the prospective prime contractor is a small business; (2) the prospective prime does not independently demonstrate the past performance “necessary for award; (3) the subcontractor is a first-tier sub; and (4) the subcontractor is itself a small business.
Limited as it is, this regulation can be very helpful to small businesses in appropriate cases. Like the joint venture regulations we discussed in #2, Contracting Officers aren’t always aware of 13 C.F.R. 125.2(g), so small businesses should be prepared to raise the matter if necessary.
Source: Small GovCon

How can I use this information?

Engage in the “so what” test. It goes like this.

Ask: “If I were the government decision make that had to justify that I was confident that this company would succeed by delivering on time in a compliant way, would facts would I present?”

Your job is to make sure they can confidently give answer much like these.

1. Cost is the only factor that matters because this is not a complex contract.
2. I’ve met with this company and so has my technical team. We grilled them and they answered every question factually and convincingly. They haven’t performed to this magnitude – yet. But here’s why I know they can do it based on facts and figures. They also work with XYZ company/agency as a subcontractor and they were able to prove in our meetings that we could trust them.
3. The project team lead had work at these impressive places. We have to consider this fact because iit really does distinguish them from the other competitors.
4. Look who they have on their team. Do you really think that top ACE contractor number 1 would risk their reputation with an incompetent partner?

Use the rules and the risk averse culture to make it easy for them to make a good by giving them the facts they need to have the confidence that YOU are the best choice !

Tactics – the final piece of the puzzle

Developing your strategy to win government contracts is like putting together a 1,000 piece puzzle. It requires time and understanding a lot of rules.

This week we are demonstrate how the rules related to small business set-asides is the first step establish the framework for your strategy.

Socioeconomic Considerations – The Small Business Reservation

This rule reserves contracts greater than the micro purchase threshold ($10,000 in 2021) and that are less than the simplified acquisition threshold ($250,000 in 2021) for award to a small business. For this rule to apply, the contracting officer must believe that at least two or more small businesses CAN perform the work. And are likely to submit offers to WIN the work. This is referred to “as the rule of two”.  Awards can be made to ANY small business regardless of any additional socioeconomic classification such as women-owned.

These contracts are awarded using simplified acquisition procedures (SAP). SAP awards typically allow for more informal solicitation and award processes. These types of awards benefit small companies that haven’t yet developed more sophisticated processes to win government contracts. More on this later.

But what about the VA? Don’t they have special rules?

Yes. If the VA is the agency that spends the most on your product or service, you must consider the VA rule of two. This rule is similar to the “rule of two” we explained earlier. The difference is that the VA MUST first contract with Service-disabled veteran owned small businesses (SDVOSB) any time two or more SDVOSBs CAN PERFORM and ARE LIKELY to compete. If NO offers are received from any SDVOSB the solicitation will be cancelled.

After this happens, if the VA believes there are two or more veteran-owned small business (VOSB) that CAN PERFORM and ARE LIKELY to compete they reissue the solicitation as a VOSB set-aside.

If NO offer is received from any VOSB then the solicitation will be cancelled again and either set aside for small business competition or for full and open competition to include large businesses.

If your business qualifies as an SDVOSB or a VOSB, you want to carefully examine what this agency buys and how they buy it when finalizing your strategy. All other factors being equal, you may have a real advantage over businesses that are NOT owned by veterans.

If your business is not an SDVOSB or a VOSB, and the VA is your best prospect, there are two options. Form an alliance with a veteran owned firm or ask the Contracting Officer if a tiered strategy would ever be considered.

What is a tiered set-aside strategy?

A tiered strategy avoids delay in awarding a contract when it is not evident that sufficient competition exists among either SDVOSBs or VOSBs. There are three types of tiered strategies. The first sets the requirement aside for SDVOSB competition. However, the solicitation allows VOSBs to also submit a proposal. If no SDVOSB bids, award CAN be made to the VOSB. This eliminates the need to resolicit when SDVOSB offers are not received.

The second tiered strategy is similar. In this strategy all small businesses may submit proposals. In the event that neither an SDVOSB nor a VOSB bids, then the CO may award to a small business without issuing a new solicitation. The third strategy allows all businesses to compete and also eliminates the need for issuing a new solicitation in the event that no SDVOSB or VOSB submits a bid.

Use of a tiered strategy is not mandatory. Some contracting officers will embrace the efficiency this offers while others find it too cumbersome.

If your market intelligence shows that SDVOSBs nor VOSBs may not be able to perform and are unlikely to submit an offer, you should certainly ask the CO about this strategy.

Other socioeconomic considerations.

There are too many ways to leverage any small business status to discuss in a single blog post.

But, recognize that once a requirement is “set-aside” for competition among one of the small business categories, it usually remains set-aside.

And in fact, if the requirement is currently competed under the 8(a) program it will generally remain in that program. If your company is not in the 8(a) program and a contract you are interested in is currently competed via the 8(a) program, you need an alliance with an 8(a) firm.

Contracting Methods and Action Type

The major contracting methods are purchase orders, definitive contracts, indefinite delivery contract (IDC), Blanket Purchase Agreements (BPA), Federal Supply Schedules (FSS), Basic Ordering Agreements (BOA), and Government Wide Acquisition Contracts (GWAC).

Each method represents a different way of winning government contracts. And each represents a nuance and a potential tactic that needs to be considered in putting together your strategy.

As stated earlier, many small businesses focus on pursuing contract awards that were previously made using simplified acquisition procedures.

Why is SAP the place to start?

  1. These requirements are reserved for award to small businesses whenever possible
  2. The contracting officer has a lot of flexibility in how to solicit for, select and award contracts using these procedures.
  3. This generally makes it easier for smaller companies to compete effectively.

And this is where we will continue putting together the strategy puzzle in the next post.

And since you’ve read this far – here is your prize. Join the GovCon Business Incubator that starts on June 25 by May 25 and receive $600 off the registration price. Email or call margo@govconacademy.com, 202-362-9477.

Incumbent-itis

More than one great company has fallen prey to what I call “incumbent-itis”. This virus infects your team with delusions. These delusions allow project managers and capture professionals to believe that they have a “lock” on winning the recompete only to find that they had misplaced the keys that actually opened that lock. There are two primary ways that companies catch “incumbent – it is”.

  1. Focusing on how things are not how they are going to be under the new contract

The incumbent knows a lot about agency operations. So, they tend to think that they have a better handle on how things are, how things should be, what the client wants, and what they don’t want.

But.

Does the solicitation for the new contract agree with the incumbent’s vision? If incumbent companies aren’t careful, they will overshoot or undershoot how they respond to the solicitation. Neither approach addresses the new contract requirements.

And the evaluation team is going to be required to award a contract based on the new contract requirements. And to evaluate proposals based on those requirements. And nothing else.

So even if the agency wants to award the contract to the incumbent – they may not be able to because their solicitation response is not compliant. And that brings me to the second risk.

  1. Does the agency really like your company as much as you think they do?

To answer this question, assess the following.

  • Realistically look at what has gone wrong. Something always has. So, did you fix it fully? How do you know?
  • What has changed since you won the contract? New management? Better way of delivering the service? Newer product that is faster, cheaper, or produces better results?
  • Who are the competitors – really? How will you compare to them? Don’t overestimate the value of being the known entity. (You can find who the competitors are by looking at recent award data for similar contracts, preferably within the same agency.)
  • How can you beat a lower priced offer from a less experienced challenger?
  • Is there any way that you can continue to provide exceptional service by reallocating personnel or other resources to remain price neutral? To lower the price? Exceed the performance standards without adding cost?

Don’t wait until the solicitation drops. Start planning for your recompete as soon you win the contract. Have regular strategy meetings. And ask the government client how you are doing. Then listen without argument. Get specific feedback on what changes they would like to see. And then change. Make sure the change delivered the result they sought. Communicate. Respond. Perform.

Finding your own cure for incumbent-itis is more important they ever. This is one of many topics that we cover in our Project Team Business Development Support program.

And since you’ve read this far – here is your prize. Invest in your team in 2021 by enrolling them in our customized Project Team Business Development Program. Reserve a date by May 31 and receive $1,500 off the program fee. Email or call margo@govconacademy.com, 202-362-9477.