- - Wednesday, July 15, 2015

So, you have decided that you want to do some federal business. What do you need to know in order to get an order from the federal government? There are many, many answers to this question, but here are some basics.

The first thing to recognize about the U. S. federal government is that it is very, very big. Its multi-trillion​ dollar annual budget dwarfs anything spent by any single company on the planet, and it is larger than the GNP of most countries. And, in addition to its annual budget expenditures, there are hundreds of billions of dollars (nobody really knows how many) spent “off-budget” every year.

Since it is so big, and since it has the power, the federal government writes its own rules for doing business. These rules differ significantly — sometimes radically — from commercial practices. People who come from commercial environments are frequently so frustrated by federal “bureaucracy” that they back off from even seeking federal business. In addition, the government always wants to buy everything at the steepest discount, so profit margins on individual sales can be slim. Another element of government procurements, which is of considerable annoyance to businesses unfamiliar with government procedures, is the necessity for all bids to be presented in prose (as opposed to slide decks). Thus the addition of separate staff (the first of several).

Why, then, do companies do federal business?

There are solid business reasons for doing federal business.

The government is credit-worthy. It will never go broke; it always has the money it owes you (getting it is something of an art, but it is there); and you never have to worry about getting dragged into bankruptcy court or debtors’ committees in order to get paid. In an era of the failure of some well-known companies, this is not a trivial virtue.

The government never goes into recession. In fact, in recession, it frequently spends more money. Business with the government tends therefore to be recession-proof; it is not subject to business cycles.The government buys a tremendous variety of goods and services — all sizes, subjects, and types. There is literally something for everybody.

As in any marketplace, federal sales are the result of knowledge of the customer, diligence in prospecting, ability to satisfy the needs of the customer, and a series of actions which lead to trust on the part of that customer. These factors sometimes lead to a certain “customer loyalty” which frequently occurs in this marketplace as in others, based on performance, trustworthiness, and mutual need.

Federal business is therefore relatively predictable, a factor which is enhanced by the public character of its policies and even its practices. There are fewer shocks in federal business; you can usually see changes coming for some time before they occur. All you have to do is follow the news.

There are large philosophical issues regarding government spending. A lot of people are against it. But in today’s world, honest federal contractors who produce a dollar’s worth of work for a federal dollar spent are doing their bit to make the government more productive. Service with integrity is valuable both for the government and for the people it serves.

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