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Selling to Uncle Sam

It May Take Some Extra Elbow Grease, but Selling to The Government Can Pay Off for Distributors

By Bridget McCrea, Contributing Editor -- Industrial Distribution, 4/1/2006

When Hurricane Katrina swept across the Gulf Coast in September 2005, it left behind a swath of damage and destruction in an area that's yet to fully recuperate from the hit. Left to flounder without electricity, water and other essentials in the days following the storm, city, state and federal government agencies put the call out to companies nationwide, asking for a wide variety of products and services.

Safety Products, Inc., of Lakeland, Fla., was one distributor that answered the call, which came from the Florida Department of Transportation. In the days following Katrina, the safety distributor supplied two tractor trailers packed with traffic equipment, cones, barricades and other items to the affected areas.

"We sent them out in the middle of the night to a staging area in Mississippi," recalls Trish Loranger, government sales team leader for the firm, which has two locations and 72 employees. "The items were then distributed to the areas hit hardest by the storm."

Loranger says it's not the first time Safety Products mobilized quickly to help government customers in their time of need. During Florida's very active 2004 hurricane season, for example, the company operated in "emergency" mode for several months, standing at the ready for several city and state government agencies.

Fulfilling the need isn't always easy, but Loranger says the payoff can be significant, both financially and in the knowledge that the distributorship is making a difference during someone's time of need.

"When emergencies come up, they need everything right away," says Loranger, who points out that Safety Products also does a fair share of "non-emergency" business with Uncle Sam, and as such has seen its government business ebb and flow along with the agencies' needs. "The opportunities are event- and grant-driven, so they can be hard to come by when there's no urgent need."

Learning the ropes

Across the nation, industrial distributors like Safety Products are supplying equipment, products and services to the many facets of the U.S. government. A mystery to some, this area of business has presented opportunities in recent years, thanks to increased awareness of national issues like homeland security. At the same time, military base closings and budget fluctuations have presented challenges for companies looking to sell to their local, state and federal government agencies.

Four years ago, JM Industrial Supply of Pekin, Ill., saw an opportunity to sell its tools, measuring equipment and MRO products to the government, and called on Illinois Central College's Procurement Technical Assistance Center for help. According to Scott Squire, JM Industrial Supply's government sales coordinator, the nine-employee company has a blanket purchase agreement with the U.S. General Services Administration, and also provides products and services to other agencies.

Squire, who is dedicated to building the distributorship's government business, says that early on he spent much time learning how to read solicitations and submit bids. He developed relationships with the small business specialists at various agencies, and talked to them about the contracting and bidding process. The company received its Small Business Administration's 8(a) certification (see sidebar) and began answering Requests for Proposals.

PTAC director Susan Gorman worked closely with Squire, providing one-on-one counseling, technical information and marketing assistance to the distributorship, and says opportunities are plentiful for distributorships looking to mimic the company's success in government sales.

"There are opportunities for industrial distributors in all government sectors, including the Department of Defense, the U.S. Department of Homeland Security agencies and the GSA right now," says Gorman. "Services that are being purchased include engineering and IT solutions, and products include military gear, fire safety gear, chemical hazards gear, to name a few."

With base closings highly publicized over the last two years, Gorman says she's yet to see any significant impact on companies like JM Industrial Supply. It's an area that she advises distributors to keep an eye on, however.

"If local and regional bases downsize or shut down," says Gorman, "distributors could wind up losing those valued, established networks and contacts."

Finding new opportunities

Most government agencies actively seek out vendors who fall into the small, minority-owned or otherwise "disadvantaged" category, thus boosting those firms' chances of getting the sale. There are several levels of government qualification and certification, and the paperwork involved is generally not much more than what you'd deal with when selling to a larger, private corporation.

Also working in distributors' favor is government agencies' use of "purchase cards," or credit cards designed to give procurement specialists discretion on items priced at $500 or less. Instead of putting the order out for bid, for example, those buyers can make quicker purchase decisions on items that fall below that threshold.

When seeking opportunities, Loranger says distributors should start by forming relationships with county, city and state offices, many of which have an ongoing need for industrial equipment, supplies and services. Realize that winning bids takes more than just a sharpened pencil, adds Loranger, who says distributors should have a clear understanding of what the agencies are buying, what their budgetary requirements are, and their use of purchasing credit cards vs. traditional bids.

And don't forget to factor in the value-added services that your distributorship can provide to the agency, say other experts. Having an item in stock for same-day or next-day delivery can be a big advantage, for example—particularly if it qualifies for a credit card purchase. Distributors can also stand out by offering knowledge and expertise on parts and equipment usage, and should be clear about the value they bring to the table, and what they're ultimately delivering to the end customer.

Expect to see increased opportunities in the government sector, says Gorman, who cautions distributors to be patient and persevering when selling to such customers, and to brace themselves to spend 18 to 24 months getting to that all-important first sale.

"The opportunities are really out there," says Gorman, "but the challenge lies in identifying the best ones and going after them successfully."

With the 2006–07 hurricane season just around the corner, Loranger says her company will stand at the ready for such events, while at the same time continuing to build its non-emergency government sales business.

"It's a matter of knowing what kind of grant money is available and what equipment they'll be buying with it," says Loranger, "and then having the right product to match those upcoming opportunities."

 

Getting Started

If you're ready to start doing business, or increase the business that you're already doing, with the government, here are few good starting points:

Check out the Small Business Administration's 8(a) business development program.

Named for a section of the Small Business Act, 8(a) is a business development program created to help small disadvantaged businesses compete in the American economy and access the federal procurement market. Small businesses may also be certified as Small Disadvantaged Businesses by the SBA. Such businesses are eligible to receive certain preferences in federal procurement actions. Learn more at www.sba.gov/8abd.

Next, visit some of the "procurement forecasts," which are available online at the respective government agencies' Web sites. The Department of Labor, for example, posts its contracts and grants online at www.apps.dol.gov/contract_grant/report_inter.asp.

Also, check out the Federal Procurement Data Center www.fpdc.gov/fpdc/fpdc_home.htm, a repository of information and all contracts that every federal agency has issued. Using North American Industry Classification System codes, you can research which federal agencies have purchased your products or services in the past.

Registration is another key to success with government contracts. The Central Contractor Registration (www.ccr.gov), for example, serves as a federal clearinghouse for vendors, including small businesses. Woman- and minority-owned businesses may also want to get certified through the National Assn. of Women Business Owners or the National Minority Supplier Council. As the primary vendor database for the U.S. Federal Government, the CCR collects, validates, stores and disseminates data in support of agency acquisition missions. Both current and potential government vendors are required to register in CCR in order to be awarded contracts by the government. Pro-Net is an Internet-based database of information on more than 195,000 small, disadvantaged, 8(a), HUBZone and women-owned businesses. Government agencies as well as prime and other contractors use this database to locate small business contractors, subcontractors and/or partnership opportunities.

You'll also want to contact the various Offices of Small and Disadvantaged Business Utilization within the government agencies. Set up meetings with them and get their advice and guidance on how to proceed, and then ask them to arrange meetings between your firm and those departments or bureaus that may have a need for your products.

Tips for Government Contracting Success

Susan Gorman of Illinois Central College's Procurement Technical Assistance Center shared these tips for distributors looking to do more business with Uncle Sam:

Identify your best possible markets and focus on one or two government agencies—for example, the U.S. Army, U.S. Navy, Department of Homeland Security or regional research laboratories.

Develop a government contact list and dedicate a portion of your company's Web site to government sales. On the site, include GSA contract numbers, certification credentials and a list of your distributorship's current government and prime contractor customers.

Build relationships and frequent communication with small business specialists at their respective government agencies, prime contractor Small Business Liaison Officers and your own customers (for partnering purposes).

Be proactive about highlighting your company's unique niche in the market, its credentials and its goals surrounding the sale of products and services to government agencies and prime contractors.

Federal opportunities abound, but don't overlook state and local government contracts.

Learn the government's procurement processes—from the acronyms to the regulations to the procedures.

Pay strict attention to details, and do your homework.

By becoming an expert yourself, you can leverage your own expertise with other small business services providers to make sales to government agencies and prime contractors.

Be persistent...government contracting takes time.

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