The last installment discussed various ways to close federal sales. Among all closing mechanisms, multi-vendor contracts are becoming the favored way to close federal sales if you are lucky enough to have one.
Companies holding multi-vendor contracts minimize the amount of competition they face since a public bid isn't necessary. Vendors who don't hold a multi-vendor contract may have to start out as a subcontractor to an existing federal contractor, commonly called a "prime contractor," in order to close a sale. For example, your company could sell a product or service to an end user at a particular agency and the agency may decide that the best way to close your sale is through a subcontract with a trusted prime contractor (as opposed to going through a lengthy and expensive public bid process). The prime contractor may already have a contract with the agency or hold a multi-vendor contact that can be used to close the sale.
Subcontracting is a valid way to close a sale but it has drawbacks. The primary drawback is that a subcontract with a prime contractor doesn't give you your first step toward achieving insider status. When acting as a subcontractor, you do not have a contract with the federal government. Instead your business has a commercial contract with the prime contractor. The prime contractor controls your company's prices, your sales growth, and your destiny with the federal customer. A savvy prime contractor also insulates the federal customer from its subcontractors so the subcontractors never really achieve insider status.
This article is an excerpt form the new book "Rolling the Dice in DC". The book is written for managers and sales people and describes the day-to-day dogfight of competing and winning in the federal market. Read this book if you want to know the good, bad, and the ugly of the federal market, what it takes to enter the market, and the potential returns.
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