So, you are thinking about getting on a government contract. After all, the government is a stable buyer who will pay its bills. Plus, a government contract could be a very lucrative engagement depending on the products and services. If you are new to the public sector, it is important that you understand the unique qualities of the government marketplace.
It takes time – a lot of time. Government entities don’t make a profit that they can then spend as they see fit, when they see fit. Money must be appropriated. At the state level, this means that an agency will prepare a budget request, the Governor will approve or deny the budget request, and if approved, then the Legislature and Governor have to agree about the expenditure. This is a tedious process with a lot of stakeholders and competing priorities for spending.
There are Rules of Engagement. When the government purchases a product or service, it is spending taxpayer dollars. Our money. To ensure that our hard-earned tax dollars are spent wisely, the government has a complex set of rules and procedures that it must follow if it wants to make a purchase. This is called the procurement process. If you aren’t familiar with the process, you could miss critical deadlines, or worse yet, get disqualified from competing for a project.
The Government’s Primary Motivation is not $. While the government wants to receive a competitive price, its primary motivation is risk reduction. Because the government provides very important services, such as food stamps, prisons and environmental permits, risk is a huge motivator. The government doesn’t want the newest and cheapest invention; it wants to know that your product or service is reliable, safe and proven.
Value is Critical. Government is not selling a product or service to make a profit. The government strives to provide value – value for its citizens. When you meet with a government official, avoid saying that your product or service is the cheapest. Instead, speak to how your product or service can help the agency accomplish its mission and serve the needs of its constituents.
Information is at your Fingertips. The government must abide by public records laws, and this applies to procurement-related documents. Use this to your advantage and research your competitors’ contracts, proposals and pricing structure.
While the government market can seem like a maze of rules, regulations and officials, stay focused. Remember, be patient, follow the rules, and relate to your audience by speaking in terms of risk-reduction and public value. If you do this, you will have the edge over your competitors.