Understanding the Government Procurement Process

In this episode, we delve into the intricate and often misunderstood world of government procurement. Most people think it's just about bidding and winning. There's a lot more happening behind scenes and leading up to a contract award. Once you understand the process, it will make it easier for you to approach the government to influence acquisitions, gain valuable market intelligence, and ultimately WIN government contracts.

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Read Transcript Here:

[00:00:00] I'm going to cover a very basic topic today. It's a very simple topic around the government procurement process so that you can understand what happens as a contract is flowing through this. Most people think that a contract happens because the government gets a need and they put out this RFP and next thing they know, they awarded a contract and people are doing the work. That's about three steps in the process of about a dozen or so. I want to cover what those dozen or so steps are today.

So step one is the government identifying a need. Now, this isn't always the government just identifying a need, like, Oh, you know what? We need a new building cause we've outgrown this one or, Hey, you know what? Our contract for janitorial is expiring and we need a new one. It's not always like that. A lot of times it is a contractor like yourself who is talking to the government and says, Hey, did [00:01:00] you realize that even though you have this software program, this suite of tools, this whatever that there's these three challenges, are you aware of that? And oh, we could solve those challenges by doing “fill in the blank”.? If you're on site, part of your job is helping them identify needs they may not even know they have and addressing problems they didn't know there was a solution for. Maybe they are aware that there's a frustration. There's a concern. There's an issue. But they don't think or don't know that there's actually a solution for it.

That's where you come in as a contractor. On the step one, identifying needs, there is a lot of opportunity for you as a contractor to influence the government on the things that they need. That is in step one.

Step two is where they take those needs and say, Hey, you know what? We have this need now. Let's go get some funding [00:02:00]. Depending on the size of the need determines on how they have to go get that funding. For example, if the need is really small, let's say it's under 10, 000 under that micro purchase threshold level, they may just swipe a credit card. They may say, look, we've got some discretionary funds. We can spend up to X number of dollars on whatever we want without really adding to the budget. If the need is on the larger side, let’s say it's a 25 million need. They likely have to go get that added to their budget. Depending on when you are in the budgeting cycle, they may have already submitted the budget for the next fiscal year. And that could be with Congress. It could be waiting for the President to sign. There's all kinds of things there. So they may say, well, let's add it to next year's budget. So depending on where they are in the budgeting process, it could be 12, 24, 36 months before they get the funding to do something. Because guess what? That's how slow the government is. And again, the bigger the [00:03:00] project, the longer it's often going to take.

Now, are there some exceptions to all of this? Absolutely. Let's say there's a massive need for something right now. You've seen Congress go out there and just say, Hey, let's pluck, 400 bazillion out of the air and just award that to people and give that to whoever, because that's what we want to do, because we feel it's an emergency, right? They can do that. But in general, that's not how it happens. In general, the government's not going to say, Hey, you know what? We want 4 million for this particular project, that's outside the budget for this year. Yeah, don't worry about that. That's okay. Just spend it. It's okay. They're likely not going to do that, especially down at the contracting officer level. They don't have the discretionary spending to be able to do that. The only way that happens is if there is money that's already allocated for something, and it's being redirected towards something else. And that is above their head, right?

The funding side of it can be a [00:04:00] really long term process. In fact, step one and two, those two processes could take months if not years. Step three is the market research phase. Again, I have seen the government in the market research phase for 1 to 2 years easily on something. Now what happens in the market research phase? It's as simple as they conduct research. It's a little bit of everything under the sun. They could be looking in SAM. They could be looking in the small business directory. They could be searching Google and LinkedIn. They can be searching all the resources. And then they could start putting out RFIs and sources sought and things like that. So market research doesn't just mean they put out an RFI. They could be doing a lot of other searching, Googling, you name it. They could be going to conferences and asking questions. Market research is a broad area of this process where, again, it could take a lot of time.

Most of what you see on Sam has already gone through all of this. It's already gone through the identification of the need, the funding, [00:05:00] the market research. It's actually past the stage I'm about to talk about. The next stage here is where they develop a solicitation. When they're going through developing a solicitation, that's creating all the documents, making sure all the far clauses are in there, going through the requirements, going through all those things to prepare an RFP or an RFQ. Also part of that developing the solicitation is where they're determining, Hey, is there a contract vehicle that we could use for this? Or else, how could we do this?

Those stages, stages one through four: the identifying the need, the funding, the market research, developing the solicitation documents. All of that may take one to two years, depends on the size of the need. Just be aware of that. Now, the good thing about that is you can interject your thoughts, your ideas. You can do what we call ghosting where you are trying to highlight what makes you competitive as well as highlight what makes your competition not so good. In this case, you can do all of that through these phases because [00:06:00] guess what? It hasn't gotten to the point where of number five on my list, where they publish the opportunity. Once they publish the opportunity and it gets in that full on acquisition phase, that's where, for the most part, the influencing of the acquisition is done.

There is often a Q&A period on that first week or two, when they publish an opportunity, and that's really your final chance to actually get some sort of input into the solicitation. You can only influence it so much at that point, but there's still an opportunity at that point to be able to influence the opportunity by saying, Hey, Here are some things you hadn't thought about. Hey, we've been tracking this for a long time and it looks like you guys have included this and you probably shouldn't or whatever it may be, right? You have the opportunity to make those changes in that first week or two. After that it's done because they publicized it. They're technically not supposed to be talking to you or anything like that.

?It's game time for them, once they publicize an opportunity. You're usually going to see [00:07:00] two to four weeks for the public to respond. After the public responds, that is where, you know, the bids are going in and things like that. After that stage, there's the evaluation of the bids. Now they all go into a dark room and select the winner, right? Not exactly how it happens for the most part. There is a selection committee. They review different things about the document. You have people that review the pricing separately and things like that. So they can't see, Oh, it's company ABC and here's the pricing on it. Those things get reviewed separately.

And then basically what happens after they evaluate the bids and proposals is they select a vendor. Once they select a vendor, there's a contract award that happens where everybody is notified winners, losers, all that kind of stuff that happens. And then now it's moved on to contract administration.

During contract administration is where you are actually working with the customer. So if you're the winner, you're working with them, whether it's delivering power strips or delivering [00:08:00] complicated IT solutions or janitorial or cybersecurity, whatever it is, you're working with the customer to get that done.

Now you may not be working with the end user, depending on how large or small it is. Again, if it's power strips and a contracting officer went and bought, you know, 50, 000 with power strips, there's a good chance they're not going to say, well, you know, you need to talk to the project manager and get to know them. And yeah, it's probably not going to happen. But in other situations where you're doing services, you're absolutely going to get to meet a lot of those people. The more complicated, the more people you're going to meet because they need you to work with those folks. The contract administration phase is again where you have a large opportunity to influence future actions with that agency. You can be talking to them about those problems that you've identified going back to step number one. And instead of asking them for a new contract, you could say, look, we can do a contract modification here, often called a contract mod. We can do a contract mod and you could add some work to this existing contract. That's often how contracts go from, say, 1, [00:09:00] 000, 000 to 1, 500, 000, 2, 000, 000, whatever it may be, or to 12, 000, 000 or whatever, because the government says, Oh, there's already a contract in place. We already have terms. We can add money to this. There's processes and procedures for them to do it, but that can happen. So that's one way you can grow a contract and influence it.

The other way here is again, spotting different needs while you're working in that contract administration phase. I highly recommend as you're going through that, you don't just put your head down and execute, you look for opportunities to bring up other things.

We did a podcast on this a while back. There are reports that you can ask your employees to fill out every month, depending on what they're doing every weekly on how to feedback intelligence to you. I won't get into all that today, but just understand that is an opportunity for you to grow with that client during the contract administration phase.

Once you are starting to wrap up the contract, you get into what would be considered the final delivery and acceptance. Again, whether it's [00:10:00] product or service where the government is checking off on what you've been doing. And in fact, they sort of do this every single month if you're on a services contract, where every month they're saying, Hey, you said you were going to do 120 hours worth of work. You've done 120 hours worth of work… check. And now we can pay your invoice. That's happening on a regular basis. If they don't check off on doing that work, you're not getting paid. Which is sort of the final step for most contractors is, Hey, I want to keep getting paid every single month. If we go back to step 10, which was the contract administration.

?As they're going through and you're doing a good job, guess what happens? Your option years get renewed. That kind of falls in that delivery and acceptance as well. Your option years get renewed. You keep extending the contract working with the government.

Finally, we have contract close out. There's actually a formal process where they go through the contract close out and it's deemed over and done. You have delivered on everything they've paid you. There's no obligation on either side at [00:11:00] this point.

I wanted to walk through this process with you so you would get an understanding of what the life cycle is of a contract to understand how things can be walked through this and what's going on in the government. Because I think a lot of times people get frustrated because they think it is really, Hey, the government wants to buy this. They put in an RFP. We deliver and they pay us. That's it. Now I just outlined 13 plus steps here that have to happen on their side. Because this is a formal thing, regardless of the size, it's a formal thing that the government's going through. So now that you're armed with that, I hope that helps you understand how the government works. If you have any questions, reach out anytime.

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.

Thank you again for joining us today and we'll see you next [00:12:00] time.