Leveraging Contract Vehicles

In this episode, we'll be discussing the ins and outs of using government contract vehicles to win federal contracts. We share insights on various government contract vehicles, such as GSA Schedules, IDIQ contracts, MATOCs, and BPAs. We'll cover everything from the advantages of using government contract vehicles to the pitfalls to avoid, and we'll also discuss the various strategies you can use to increase your chances of success.

So whether you're a small business owner looking to break into the federal market, or an experienced contractor seeking to expand and level up your government business, this podcast will help you navigate the complex topic of contract vehicles.

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Read Transcript Here:

Mike: [00:00:00] One of the top questions that I get asked all the time is about contract vehicles. People will tell me, Mike, I hear that I need to be on this contract vehicle or that contract vehicle. Can you tell me how to get on it? Or they will reach out to us and say, Hey, we are trying to pursue this contract vehicle.

We need your support services, that sort of thing. When I slow down and ask them the simple question, why are you pursuing this contract vehicle? The answer is usually like 90% of the time, because someone told us to. Because we hear this is the contract vehicle you need to be on. I always ask the question, well, who buys what you sell?

A lot of times the answer is: I don't know, the government? It's one of those things where this process is so much easier when you actually go back to the basics and determine if the customer you want to sell to uses the contract vehicle you're trying to pursue.

If I back up for a moment, what is a contract vehicle? A contract vehicle is just a process or a contract that the government puts in place in order to streamline the purchasing of products and [00:01:00] services when they know they're going to be buying a lot of it. So they will identify sometimes one service, one product, a bunch of things that are a bundle of things that they want to buy a lot of. They will say, Hey, we're going to put together this contract and it's going to be for $5 million, 5 billion, whatever the number is. And we're going to put it out there as an RFP to everybody who wants to respond. But here are the qualifications in order to come after this thing. We're going to compete it. We're going to choose so many companies. We're going to award it to those companies. And then we're going to start issuing task orders, which are the actual work. That's how it works, really. You basically have this big pool of contractors that get whittled down, hopefully to a small pool of contractors. And you typically want to be in that small pool.

Some of these contract vehicles are what we consider open, where they're taking on new contractors all the time. And a lot of those have dozens, if not hundreds of contractors on it. And then there's other contract vehicles that are closed. They [00:02:00] compete them every 3, 5, 7 years, however often it is. They compete the contract vehicle. They award it to a bunch of primes. And then once the award is done, it's done. It's cut off. You can't get on this thing unless you are a sub to one of the primes, or unless it rolls back around in 3, 5, 7, however many years it takes. Typically what happens is the government will identify a need. They will create the contract terms, put that out there, award it to companies, and then they start dropping task orders.

So that's kind of the process flow. Now, some of the really, really big ones may take a year or two to come out. I've seen it take months and months and months. When you're talking 50, a hundred billion dollars, yeah, it's going to take a while for them to do that. And a lot of times they'll start with a sources sought. They'll talk to not only the government, the agencies, but they'll talk to contractors and say, Hey, we're thinking about doing this. We're thinking about these modifications to it, if it's an existing. We're thinking about these requirements if it's a new one. We'd like to hear your input. And then all that [00:03:00] input gets rolled into the final RFP.

And then there are some contract vehicles that are really frustrating. I, I've seen a few of these where they go through multiple iterations of the RFP like version 19 or 20 or whatever it is. Then it finally comes out and what usually happens is a protest before it even comes out. But we're not going to get into all that today. But I will say one of the things about these big contract vehicles, we usually call them GWAC's, where they're government-wide acquisition contracts. Those are the ones that take a lot of time to come out. They do involve a lot of protests. They're slow moving at everything they do. And you may be chasing one of these for 12, 24, 36 months before you even see the first task order on that. So that is why I usually focus on some of the tried and true stuff that's already out there, as well as the smaller agency contract vehicles.

Because a lot of times, agencies will do all types of different contract vehicles. You'll even hear BPAs, that's just a contract vehicle to blanket purchase agreement, where they will say, Hey, going to award you [00:04:00] this BPA and we can spend up to $5 million on this. But they've awarded to 10 different companies the same thing. And over the next five years we can spend that 10 million. And then as a need arises, they say, oh, you've got this BPA. We can do it through that, because money's already there. And that'll just be a real simple way to get you this contract.

I personally believe where you should start in government contracting when it comes to contract vehicle, is a smaller agency vehicle, something where the cap is not 50 billion or something along those lines. And I'll tell you the primary reason, number one is because the odds of it actually coming to fruition in a, what I would quote reasonable timeframe, are pretty high. If they're putting out a sources sought and they say, Hey, we're going to put this out this summer, then the odds are they're actually going to follow through with that.

Whereas if it's one of these bigger government-wide contracts, they may say, we're thinking about it this summer and this summer rolls around and you haven't heard anything. And then it's next summer and then it's the next fall, and you're two years into those on those really, really big ones. So start [00:05:00] small on agency wide ones and ones that are already out there.

Like, a GSA schedule is actually a contract vehicle. That's something you can apply for all the time. We're going to get into open and closed and all that here in a little bit. But before you even start trying to look at which vehicles are the right ones for you, I think it's important to go back to the basics of who buys what you sell, and we start there.

Who's buying what you sell, and then HOW? The “how” is really important because if you look at the how, that's usually going to tell you, Hey, we're using this particular contract vehicle. We're using these particular socioeconomic statuses. And sometimes these contract vehicles are just for certain statuses, like 8(a)STARS III , just for a specific status. Vets, you have to be a veteran, or at least to be the prime. There's things like that where once you see how things work, you can determine, ah, the agency we want to sell to is really buying a lot of stuff on VETS. They're buying our products, our services on VETS. Or hey, the agencies we want to sell to, they're buying a lot of stuff through NASA Soup. Because we don't want to just sell to DOD, we want to sell [00:06:00] to FBI, and we want to sell to CDC or whoever it may be, and they're all using this particular vehicle. So if we got this vehicle, that would cover 80% of the agencies we want to sell to. And so that's the kind of things you want to look for when you're initially doing your research.

Now let me talk really quick about if it's open or not. A lot of times on one of these contract vehicles, they will compete it and then it's closed. That's it. There's no more contractors that are allowed to be on there. They're going to recompete in three or five years or whatever it may be. And those are the contractors for the entire term of that. Now there's other contract vehicles that are continually on-ramping is what we typically call it. They're on-ramping new contractors all the time. Those are great contract vehicles to be on as well.

So you want to have kind of a mix of those: stuff where you've competed and maybe it's, five or 10 companies and stuff where you can compete at any time and it's hundreds of companies that are on there. You kind of want a mix of that. But we start in the smaller [00:07:00] area where you're competing against a handful of companies and that's it, those agency type of ones. Because look, if it is open, anybody can go and apply to be on that thing. Just like GSA schedule. Anybody can go and apply to be on it. If it's closed and you really need to get on that to sell to your customer, you're going to have to go and beg a prime to make you a sub. And if they've already got a sub that does exactly what you do, guess what? They're probably not going to want to work with you. And it's nothing personal. They have, you know, put together a contract, a subcontracting plan, and they've put all that together and awarded somebody months, maybe years before they ever met you. And so there's some loyalty that they owe to that person.

Now, here's where you can break in on some of those. If you have something unique, maybe it's a skill, maybe it's a product, maybe it's a service, whatever it may be. If you have something fairly unique, something that is in demand, then they may want another contractor. Especially if they are on a contract like NASA Soup, where the volume is really, really high. And [00:08:00] they're like, Hey, yeah, we love ABC company over here, but if we had another company, we could double our volume or quadruple our volume because they're kind of maxed out right now on that product or service. So that may be a situation where if you're looking at a really big contract vehicle, the volume may be in your favor. And that's why they would want to put a subcontractor agreement in place with you.

Open and closed: two very different things.

I've talked a little bit about the agency versus the government wide types of vehicles, but I, I just want to close the loop on that real quick. When it's an agency specific contract vehicle, only that agency can use it. When it is a GWAC or government wide acquisition contract, when it's a GWAC, then it is open to usually all of the government. Everybody can buy off that stuff. NASA Soup is one of those. You'll hear me talk a lot about it because a lot of agencies can use NASA Soup, not just NASA, and so it's very, very popular. One of the reasons it's popular is because of how well the program is run. It's been around a long time. But it has [00:09:00] this Amazon style white glove type of service to it where the contract terms are a little bit different, the shipping, all those kind of things. And people love the service that is required to be on it. So if you are a contractor on NASA Soup, you're held to a very high standard.

The government knows that. They know what they're going to get when they purchase through you. They know if they buy a hundred of a certain product item and there's a problem with it, they know they're going to get it replaced very, very quickly without a lot of hassle or anything like that. So they really love the standards that are in place on NASA Soup.

Let's go back here and talk about, you know, once you are on a contract vehicle. Whether it is a small agency one or one of these bigger ones, I highly recommend you study the competition. Because you need to know who is in your product or service category that you're competing against. Because guess what, for the next 3, 5, 7 years, however long this IDIQ is, this contract vehicle is however long this is, you are going to be competing against the same set of companies all the time. So you [00:10:00] need to know their strengths, their weaknesses, their past performance, how they position in the market. And you can look at what's on their website. You can look at all these different things to figure out. How are we going to build a case that we are the better company to choose over them every single time? That's what you're working towards ultimately. Now, are you going to win every single time? Probably not. But if you're focused on researching them, you will help yourself build a better case so that you can compete on an even playing field against them.

So let's talk task order management for a moment here. When you're looking at a contract vehicle, a lot of times there are different task areas. There could be five task areas, there could be 95 task areas. It really just depends on how big the contract vehicle is, how big the ceiling is, all that kind of stuff. You need to know where your focus is going to be. Some of these vehicles put out a ton of task orders. It could be 10, 20 a day, it could be more than that. I heard, uh, the other day on a NASA Soup webinar that they update, update, [00:11:00] change, add, subtract as many as 10,000 SKU's a day, so product SKU's. Think about that.

That's a day, not a week, not a month, not a year. 10,000 a day. A lot of stuff is going on that vehicle. And if you're on a vehicle that big or on a smaller vehicle, you need to know what lane you're in. You need to know where you need to focus. You need to have a bid/no bid process. Something that is very locked down of, Hey, these are the types of opportunities we're going to bid on, these are the opportunities we're going to pass on, or pass on to either one of our subs or the prime. We are not going to touch this stuff, and this is our lane. This is where we're going to focus on. You need to understand that.

Here's another important factor. Most people think that once they get a contract vehicle, once it's been awarded to them, that the work is done. What really happens is, that's where the work starts. That's really the beginning of all this stuff. So, in addition to chasing these task orders, that's not all you should be doing. You shouldn't just be reading your email for task orders. You should be [00:12:00] talking to the customer, the contracting officers, the core, the PMs, other contractors that are on this vehicle. You need to continually work and market your business almost like you didn't even have this vehicle. But as you're having conversations and making progress, say, oh, by the way, we have this vehicle and we could do it through that. Always bring that up to them. But you've still got to do all of the marketing that you would've done without having the vehicle.

Another big thing about task orders: as you win task orders, especially on the services side, and you are putting people on site, you need to train those people how to gather intelligence and report back to the company. When you have people on site, they're seeing things, they're hearing things. And all of that is valuable information that you need to get back to your team so that they can make decisions.

For example, let's say one of your PMs or one of your senior engineers is onsite with the government. And they are hearing every day in meetings how much they can't stand one of [00:13:00] the primes, or how much they can't stand one of the people that are on your team, or how much trouble they're having with this one particular process or program or whatever it is. That information needs to trickle back to the company so that you can be aware of that, hey this teaming partner is having a lot of problems with the government. So maybe next time this thing rolls around, maybe you don't want a team with them. Or maybe there's a task order that drops and you don't want a team with them, whatever it may be.

Or Hey, there's a problem and your team could solve it, and somebody on site heard about this. Well look, this may not even be an issue that gets run through this contract vehicle. But that information, if it trickles back to your sales team, to your management team, they can make decisions to go in and talk to that customer and say, Hey, I'm aware of this challenge you're having and we could solve this. And look, it doesn't even have to be on this contract vehicle. You know, because of how small the problem is, we could do an 8a sole source on this thing. Come in here for a half a million dollars. This problem is done and over with. And now you can go on and about [00:14:00] your business. And now you've solved that and put a half a million dollars in your pocket.

Making sure your team that's on site is gathering information is critical to your success. It's critical to knowing the ins and out of the future task orders that are coming down. Because sometimes, you know, you don't see things in an agency forecast or a contract vehicle forecast. It may not be on there because it's a challenge that they're having. They didn't know they were going to have it. They haven't forecasted it yet. They haven't budgeted for it yet. But it is something that is brewing under the surface. And if you know about it, you can be one of the first ones to address it.

Here's some of the final thoughts that I have. Understand a contract vehicle before you chase it. I've harped on NASA Soup here for a while because I think it's a really good contract vehicle. Not everybody should chase it. But for the folks that should, you need to understand the high volume and high standards that are associated with this contract. And you need to understand that for any contract vehicle, you need to understand the terms. You need to understand if it's for you, why it's for you. Maybe there's only one [00:15:00] product on that contract vehicle and you have 25,000 products or a million products, Maybe you're a hardware store or something like that, and you have all this stuff and you're thinking, Hey, this is the contract vehicle for me. But when you look at it, you're like, ah, really? Pricing terms, eh, maybe not the right thing for me. So really understand those contract vehicles before you pursue them.

Have a solid proposal process in place. Because I tell you, once these come out, they're going to come out and they're just going to be flying out the door. Sometimes they're going to have really short turnarounds. I've seen as short as two or three days, and you don't have weeks to prepare for this stuff. So make sure you have a solid proposal process. That's not all the time but there are times where somebody will drop something and there's a requirement due. They've got three days. Just the way it is. So you've got to be prepared to respond to those very, very, very quickly.

The other thing, kind of harped on this a little bit, but I wanted to reiterate it here at the end, be prepared to perform. If there're only five contractors on a contract vehicle, you're one of those five and you don't perform well, the next time that [00:16:00] RFP rolls around, that agency's going to know you didn't do well and they're not going to pick you. You should always be prepared to perform well, but when it's one of these types of things, you need to go above and beyond whatever it takes to do really well on these contract vehicles. Even if you did score high, let's say out of one to a hundred, your score is like a 90 percentile of success with that agency, and I'm, and I'm just making that up. What if somebody else is at 95 or 98%? They're going to choose them next time.

You know, when you're looking at how you perform, you need to make sure you check all the boxes on the service, the product, the delivery, everything so that you are hopefully chosen again and again and again on that contract vehicle. Because that's one of the reasons you went after it, is you wanted a repeatable way to get government business.

Here's one of my final tips. Don't just collect contract vehicles. You don't get paid for that. I can't tell you how many companies that I talked to that when I go and look at their website, I'm like, wow, this company has nine contract vehicles. And then I jump in USASpending or [00:17:00] SAM and I'm like, Hmm, this company has zero contracts. They've got all these contract vehicles, but they've not won a single task order in three, five years because they've just been collecting contract vehicles. Don't be one of those companies. Get your one or two contract vehicles. Focus on winning the task orders on that and having a repeatable process, and then focus on your next contract vehicle. But again, you don't get paid to win the contract vehicle. You get paid for the task orders that follow up.

One final tip that I have for you is, if you identify a contract vehicle and you realize that it's closed and it's not coming open for two or three years, don't get discouraged by that. No, don't get discouraged by that. Reach out to those primes that are already on it. If they don't want anything to do with you, don't get discouraged by that. Simply wait it out. There's a lot of other things out there for you than whatever vehicle that you put on a pedestal. So don't get too, discouraged if something is closed. There's going to be another one. I know it [00:18:00] sounds like a long time, but two to five years actually moves really, really quickly in the government. Next thing you know, that contract vehicle will be open again. You can go chase it again. You can do a lot of research with the agency between now and then.

And here's the thing. Hopefully you can win some smaller contracts and build your past performance. So when that contract vehicle does roll around and does come up for recompete, you can be better positioned to win it.

If you have any questions about this or need help figuring out which contract vehicles are the right ones for you, don't hesitate to reach out to our team. We'd love to sit down with you and walk through this. It's what we do all the time.

And I will see you next episode.

Narrator: I really hope you enjoyed the podcast today. If you did, I would really appreciate it if you would like and subscribe to the podcast and screenshot it and tag me on LinkedIn or whatever social media you use. So thank you again for joining us today, and we'll see you next time.[00:19:00]?