Installment 6: Are Federal Bids Wired?

Outsider Perception: Most federal bids are wired for insiders like Halliburton..

Reality: The term "wired" is too strong a word. Companies which pre-sell federal opportunities are in a favored position.

Lesson: Identify federal opportunities early, sell your solution, and place yourself in a favored position.

Background:

Many members of the American public believe that federal bids are "wired," implying that the bid is set up or rigged to favor a particular company. Although public bids are not wired in the truest sense of the word, the truth is that decision makers may favor the incumbent contractor or one or more companies that have done the following:

  • Convinced the end user, through pre-selling, that they offer a superior product or service
  • Taken the time to get to know the agency and the specific requirements of the procurement through pre-selling or through having done prior work for the agency
  • Demonstrated in previous contracts with an agency that they are proven performers
  • Proven to the agency, through references from other customers, that they are a reputable vendor

Purchases made through public bids represent a relatively small percentage of buys made in the federal market. More often, purchases are made through pre-approved price list contracts or modifications to existing federal contracts. An opportunity may be put out for public bid if:

  • The agency knows a number of companies have been aggressively pre-selling the opportunity and the only option, from a political standpoint, is to conduct a public bid.
  • The project is large and highly visible.
  • The vendor the agency wants to work with doesn't have an approved price list and there isn't a prime contractor available to use as a conduit.
  • The contract that was originally bid publicly comes up for re-bid.
  • The agency needs to pad its public bid numbers.
  • The agency truly doesn't have a vendor pre-selected (yes, this happens on occasions).

Don't bid on a public procurement if you haven't done significant advance research. A bidder must have all of the background information in order to understand the nuances of the deal. There is always a back story and the vendor which eventually wins the contract will have uncovered all of the intelligence well in advance of the posting of the bid.

Installment Series:

Installment 1: The Best Offense is a Good Defense
Installment 2: Make the World's Biggest Customer Your Own
Installment 3: Market Research in the Federal Sector
Installment 4: Become an Insider in the Federal Market
Installment 5: Competition and Price Sensitivity in the Federal Market
Installment 6: Are Federal Bids Wired?
Installment 7: Fundamentals of Federal Contracting
Installment 8: Making a Federal Sale
Installment 9: Closing a Federal Sale
Installment 10: Start with the Credit Card and Quick Buy Markets for Smaller Transactions
Installment 11: Consider Starting as a Subcontractor to a Prime
Installment 12: Selling Directly to Prime Contractors
Installment 13: Pre-approved Government Price Lists
Installment 14: Getting a Pre-approved Federal Price List for Your Company
Installment 15: Small Business Preference Programs
Installment 16: Distinguishing Messages Win in the Federal Market
Installment 17: Selling to Federal Agencies Located in Your Backyard
Installment 18: Getting Started in Federal Sales
Installment 19: Don't Get Caught Up in Red Tape
Installment 20: Steps to Take After Winning Your First Federal Contract 
Installment 21: Learn How to Write Federal Proposals
Installment 22: Prosper in the Federal Market

Fedmarket has been helping companies win government business since 1995. We have been featured in the Wall Street Journal, the Washington Post, and other trade publications. Our customer testimonials speak to our competence and expertise in helping customers win federal business. We have been singled out by public and private organizations -- including the Small Business Administration and federally-funded Procurement Technical Assistance Centers -- as the most comprehensive government contracting resource in the industry. Our web site's free content includes informative newsletters on GSA Schedules, Proposal Writing and Federal Business Development.

Visit Fedmarket
For inquiries, call 888 661 4094. Press 2.


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