Entrepreneur Sharon Virts-Mozer says federal contracts can be your biggest source of business, or they can be a good add-on to your commercial work.
The U.S. government is the biggest purchaser of goods and services in the world, spending more than $600 billion annually. How can you get a piece of that pie-- $100 billion of which is set aside for small business owners?
“It’s all about problem solving,” Sharon Virts-Mozer, founder and chief executive of FCI Federal, said.
Virts-Mozer was joined by John C. Lauderdale III, a small business contracting consultant and author of The Complete Idiot’s Guide to Getting Government Contracts, for a break out session on capturing government work for you business Saturday afternoon at the Inc. 500/5000 conference in Washington, D.C.
As it turns out, you need to be just as original and innovative as you would be in a successful commercial enterprise, because the government is looking for new ways to solve its problems and conduct business at dozens of agencies, the two panelist said.
Virts-Mozer has spent more than 25 years working in federal contracting. She shifted over to government work when her commercial enterprise started to flatline in the 1990s. She founded FCI, her current business, in 2004 with 35 employees and $1.8 million in annual revenue. Today, her company, which provides back office verification support to agencies such as the Department of Homeland Security and U.S. Citizenship and Immigration Services, has 1400 employees and $72 million in annual revenue.
Government contract work, Virts-Mozer said, “is like an annuity that can last a long time to sustain the business, and it’s a nice complement to a commercial business.”
But you have to be willing to play the game, which means getting involved in the complex Request For Proposal process, which is usually time-consuming and expensive. And if you’re just starting out, it can be nearly two years before you see cash materialize for your efforts, Virts-Mozer said.
Tips You Need to Know
Virts-Mozer and Lauderdale assembled a few pointers for winning contracts. First and foremost, learn as much as you can about services that the federal government uses contractors to supply. There’s a lot of public information about contracts and competitors available by filing Freedom of Information Act, as well as through the various federal agencies, and Websites devoted to the federal contracting process.
Once you’ve gathered information about competitors and their contracts, approach contract agents by phone or email and tell them how you can do the work better, or have an innovative approach to their problem. For her part Virts-Mozer decided she would apply her engineering background to a back-office verification process that was often sloppy and inconsistent.
She also researched the two biggest prime contractors providing verification support, and went after their work.
By studying her competitors’ pricing and business model through a FOIA request, Virts-Mozer learned she could differentiate herself by asking the federal government not only for a fixed price, but a fixed unit price, which meant she could charge a fee for things like accounts payable processing and mail.
“We were betting on volume,” Virts-Mozer said, adding she decided to play an all or nothing game during her one-on-one with contracting agents telling them how she would solve their problems with her new system. Part of the reason for the no-holds-barred approach: It’s better to be told no early, than spend the time and resources on a doomed gambit.
“You have to build a solution that is bold and innovative and even crazy,” Virts-Mozer said.
For his part, Lauderdale says it’s important to outline your plan for a contract, rather than write it up, at least at the outset, because your plan will be judged very quickly. It’s also important to communicate in clear English, use some good visuals in your proposal, and offer a smart solution to a problem rather than just a response to an agency problem.
“Transparency is a very important characteristic of a government business that’s not easily obtained in commercial business,” Lauderdale said.