Contracting with Government Discussion from the trenches Cecelia McCloy, President Integrated Science Solutions, Inc. © ISSi

Who buys all these products or services? Cabinets Cattle Nuclear Engineering services Rocket propellant Processed cheese Containers Bricks Paper Microbiologic Services April 2008Alliance West2 © ISSi

Is the Federal Government a Customer for me? The numbers are impressive $300B in contracting 23% contracting goal to small businesses Goals for SDV; Minority; WOBs; Hubzone Services and Products bought are extensive BUT -It is difficult to do business with the federal government April 2008Alliance West3 © ISSi

It Will Cost You to Play Marketing will take $$$ and time Identifying an opportunity to getting a contract can be anywhere from 6 months to two years Start small – look at subcontracting opportunities Build your past performance Bidding can be expensive – Responding to a Full Request for Proposal as prime bidder $25,000 to $55,000 (SB prime contracts) Many hours of work with a multiple volume set Need the right people to bid and to run the contract Need the right operational systems to perform April 2008Alliance West4 © ISSi

Plan Which agencies buy my services and/or products? What are my services or products? Past Performance All agencies have public web pages, review them Some agencies have procurement forecasts All agencies require large business prime contractors to have small business plans Is a GSA contract an option What should my win strategy be? Some agencies are friendlier to small businesses then others – learn who they are Network, Network, Network Ask – Why would someone want to team with me? April 2008Alliance West5 © ISSi

Plan How to I find opportunities? Monitoring the Web Try a private government bid portal Work with the Small business representatives from the agencies Attend Industry Days or Outreach Events for Agencies Use the Small Business Administration and affiliated organizations April 2008Alliance West6 © ISSi

Plan Identifying – Bidding – Winning Design your strategy to ensure a Win What is the true likelihood of a Win Is there an Incumbent? Is the agency happy with them? What does it take to win? Best Value? Low Price? Does this opportunity match my business? Should I team? Do I have a history with this customer? Do they know me? Can I do all the work? Strategic Partnering? April 2008Alliance West7 © ISSi

Downside to Working for the government Bidding process is long and can be complicated You may need to hire help! There are lots of rules Federal Acquisition Regulations (FARs) There are implications for your business processes (accounting, time charging, benefits) Maybe initial cash flow issues Margins are not large on government contracts – longevity vs. profits <10% April 2008Alliance West8 © ISSi

Benefits of Federal Government Contracting Stabilize your Cash Flow Contracts are often of long duration 2 to 10 years not unusual Government Experience can raise the bar on your company operations Hire key personnel Providing a needed service to your community April 2008Alliance West9© ISSi

ISSi story First federal contract $300,000 as a subcontractor in March 1999 First opportunity bid as major subcontractor July 1999 and won but delayed contract startup until Nov First win as prime contractor in March Bid was in August 2004 First invoice paid after initial 70 days Carried payroll of 22 staff on contract April 2008Alliance West 10 © ISSi

ISSi story ISSi Gross Revenue April 2008Alliance West11 © ISSi

Conclusion Know why you want to work for the Federal Government or government contractor Make sure you have identified a viable bid opportunity Make sure your company can withstand the cash flow issues Make sure you have the financial and operational systems in place when you win Don’t hold back - Win April 2008Alliance West12 © ISSi