Installment 9: Closing a Federal Sale

Outsider Perception: Federal sales are almost always announced through public bids which are open to all; federal buyers then evaluate vendors' responses and pick the eventual winner.

Reality: Federal sales are closed (transacted) in a number of ways and the least preferable way is through a public bid.

Lesson: Learn the ways sales are closed and use the most appropriate way to your advantage.

Background:

Closing a sale in the context of this newsletter means getting the order, winning the contract or collecting the money (e.g., in the case of a credit card purchase). Closing a federal sale is where the rubber hits the road; it is the fundamental difference between the federal and commercial markets. Experienced federal contractors know how to close their sales. They also know the "closing rules" and the rules are not that mysterious once you boil the rules down to their bare essence. Outsiders mistakenly believe that federal agencies have to open an opportunity to all who want to bid. As previously discussed in this series, this is a fallacy.

As public policy dictates, federal contracting officers must strictly follow the procurement rules. When the government has a need for a product or service, the federal end user generally meets with one or more vendors to obtain information about the features and benefits of a particular product (or service) and the past performance (or experience) of the company offering it to the government. The end user then meets with the contracting officer to discuss the issues concerning the procurement.

The contracting officer will then close the deal using the quickest method allowed under the rules. This is where the process becomes complex. The contracting officer may or may not seek additional competitors depending on the amount of money involved and whether or not the companies involved have pre-approved price lists.

The following summarizes the methods in which a federal purchase can be closed or transacted:

  • By a government credit card buy (the quickest and simplest method)
  • By the issuance of a purchase order for amounts under $100,000; the federal purchaser must first obtain at least two quotes (relatively simple)
  • By the issuance of a public bid (a long, lengthy and expensive process which is usually avoided if possible)
  • Through a contract which allows the government to purchase from a select list of companies which have pre-approved price lists (e.g., a GSA Schedule contract)
  • Through a subcontract with a prime contractor that already has a federal contract
  • Through a subcontract with a "preferred" small business with which the government can contract quickly and with limited or no competition (e.g., a small disadvantaged business, Alaskan Native Corporation, etc.)

The manner in which a purchase is completed depends on the size of the transaction. More information about the differing sizes of transactions and purchasing procedures will be presented in upcoming newsletters.

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.

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