Options for Closing Federal Sales

In the previous installment we discussed making federal sales up to the point of transacting the deals (signing a contract). Transacting or closing the deals can be done in several ways. The first option is for the work to be done under a subcontract with a prime contractor already working for the agency. This would be a quick way to close the deal but presents several problems. The contracting officer is required by law to direct the prime contractor to buy from subcontractors competitively, so your company might not get the work (but in most cases you do). The government has to pay the prime contractor's overhead, and the prime contractor will reduce your profits so it can take a profit on the subcontract.

In addition, the end user is theoretically supposed to work directly with the prime contractor rather than the subcontractor. Note, I said theoretically. But even if you work with the federal end user directly, you are still under the thumb of the prime contractor.

Alternatively, the end user and the contracting officer could decide that their only option is to publish the requirements for the project as a public bid. Your company will have to write an expensive proposal, you will be exposed to significant competition from others interested in the project, and it will take an average of two hundred days or more for an award decision to be made.

The best solution is to use a multi-vendor contract to close the deal. As mentioned previously, GSA Schedule buys can be accomplished in a matter of weeks, as opposed to months, and competition for the project is reduced significantly.

The moral of the story: Make it easy for the buyer to choose you. Contracts like the one outlined above usually take six months to a year or more to sell, and obtaining a GSA Schedule contract requires about the same amount of time. Start on your GSA Schedule application now and don't get caught without a closing mechanism when it is time to sign a contract.


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