“Act” Instead of “Complain” in the Federal Market

Episode A-013

Sponsored by SDB Partners

You often hear complaints from companies trying to sell to Federal government agencies. Usually the problem starts with the request for proposal (RFP) or the request for quotation (RFQ), where the requirements are spelled out. It is not unusual to find that the requirements have been written against a product known to the government department or agency. For an “outsider” wanting to enter into the competition, this can create a barrier to participation. How did it happen? What is going on? How can you turn frustration into positive action?

Companies with experience in marketing to the government have been working, often for years, influencing their potential customer. If they have done a good job, the customer defines his needs based on what he has learned from the company’s sales force. It is hard, sometimes not even possible, to challenge these definitions or to introduce new ideas into the equation. For the new comer, this is a real barrier to entry.

There are quite a few others. As Michael Marks of Intelligent Decision Partners, an advisory marketing guidance company, explains -you have to get in front of the customer well before he reaches the stage of putting out an RFP, RFQ or a Broad Area announcement (BAA).

Intelligent Decision Partners (IDP)is a compact, efficient organization that is aligned with and works with SDB Partners. IDP combines many skills, but perhaps the most important is its ability to ferret out the right customers in the Federal space, engage the customer in extensive dialogue, and then recommend to their clients on whether there is, or is not, an opportunity for them.

There are plenty of barriers to entry. For a foreign company entering the US market, there is the general problem of competing against domestic competitors. In today’s environment where budgets are being cut back, there is political pressure to generate domestic jobs and stimulate the economy. This, of course, creates a psychological and practical predisposition by government departments to buy goods from US producers. As Marks points out in his Technology and Security broadcast (click on the link above), sometimes the best “play” for a foreign company is to team with an American firm. While it may not be as profitable as going it alone, there is a better chance to win the business.

Domestic companies, as well as international ones, probably can benefit from understanding how the customer perceives them, and whether he is willing to go with an outside company he may not know well or trust fully. In large dollar competitions there is often a formal “ranking” system where the government assesses the technology offered, the price for the product, estimates the life cycle costs, and evaluates past performance. While past performance can, of course, include commercial success, the government usually is interested in how the company worked with the government buyer and government customer in order to predict future performance. Even in competitions where the criteria for selection are not so well defined, there is often an unstated but none the less real tendency for the buyer to go with the “known” and “safe” provider. In addition, government customers, just like private sector ones, often tend to favor stable companies that have been around for a while. Despite the fact such attitudes stifle innovative young firms, decision-makers feel more secure going with the proven older company, one they are accustomed to doing business with, so they can avoid taking any risk. That is why, very often, there are protests because the government pays more then the losing competitor’s offer.

Intelligent Decision Partners main service is to figure out if the government buyer (whether singular or plural) already has a fixed attitude or if the buyer is open to listen to a new approach, or to the benefits of working with a new company. Armed with real and timely information like this, any company that wants to do business with the government has significantly improved the chance for success.

It is a non-trivial task to get hold of this kind of close-up information. Trying to engage a government procurement officer, who is bound by many non-disclosure rules and regulations, is extraordinarily difficult and probably won’t work. Actually you have to reach back to the actual users, seek out their opinions, and follow the leads they are willing to give you. There are very few companies capable of doing this type of work; and even fewer that bring back actionable information.

Figuring out how to engage the customer is, of course, only the first step -but a crucial one to win in government competitions or to convince a government agency to adopt your product or technology.

IDP is a superb intelligence gathering organization that may fit the needs of international and domestic companies looking to enter the U.S. Federal market. Michael Marks has thirty years experience as a senior Washington DC-based executive including important positions with the Defense Advanced Research Project Agency (DARPA), the President’s Office of Science and Technology, and as a policy advisor to the Under Secretary of State for Security Assistance, Science and Technology. His partner,Jordan Berliner, was a senior executive with several Fortune 500 and mid-cap companies including Abbot Laboratories, Applied Biosystems, Cygnus Therapeutic Systems and Fisher Scientific. He was a Director with Ernst and Young and helped them build a human intelligence feedback system. Dr. Maria Velez de Berliner is a risk analyst with a specialization in Latin America where she focuses on security and counter-terrorism.

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