How the Government Begins Its Procurement Lifecycle

All government procurement begins with either an idea or need by a government agency. The procurement lifecycle starts with market research and determining whether the size of the contract meets the simplified acquisition threshold for a small business set-aside award. It’s important for businesses to get involved in this process early and the best way to do that is by creating relationships with government buyers.

In this episode of FedBiz’5 we host Senior Contracting Specialist and former Federal Government Contracting Official, Frank Krebs, to discuss how the government begins its contracting lifecycle.

The procurement ‘idea’ can come in the form of an internal government requirement or from the marketplace in the form of a white paper or new product or business model.

Most frequently it comes from a ‘need’, which can stem from a new project or government program having been introduced or the need to add on to an existing service or project.

Beginning Steps in the Procurement Lifecycle?

1. Market Research – The government starts with their market research phase. Government buyers first determine an expected contract value and a category for the contract. The expected contract value plays a large role in the type of contract to be awarded.

For example, if the award value is expected to be less than $10,000, the federal government utilizes a micro purchase and simply procures the product or services without a solicitation by using their government credit card.

If the contract value is more than $10,000, but less than $250,000, of which the majority of federal contracts fall within this range, then the government buyer utilizes the Simplified Acquisition Procedures (“SAP”). Under the Simplified Acquisition Procedures threshold, small businesses must be considered for all federal awards under $250,000 if there are two or more small business offerors expected to compete.

It is important you research all contracting opportunities in your specific industry, not just open solicitations, but expiring contracts and awards not publicly posted.

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In fact, the vast majority of awards do not go through the open solicitation process. This is why you need to know your market. You must have a clearly defined plan going in. Who is spending? How are they spending? And in the federal market that is even more important because you want to be able to focus your energy and resources.

A database such as the Market Intel can provide you information on who is buying what you sell? What offices and who should you be reaching out to. This is about research and then creating relationships.

The Federal Connections Package and the Local Connections Package can help you get in front of these government buyers with your Capability Statement. This marketing gets you to the right contact within the agencies that buy what you sell.

For contracts valued more than $250,000. The government typically issues a request for proposal (“RFP”) or request for quote (“RFQ”) and the complete the full package posting of this release on SAM.gov.

Now, if the market research the government buyer performs is inconclusive, they may issue a sources sought notification or a request for information (“RFI”) to learn more about interested vendors and their capabilities.

The sources sought or RFI notification is also issued through SAM.gov and informs the marketplace of the government’s intent to award a contract for specific products or services. The sources sought or RFI is not an invitation to bid, but simply a fact-finding mission by the government buyer that will eventually lead to an RFP or RFQ.

The government buyer may also simply turn to the GSA Advantage portal to buy products or services that have already been pre-negotiated for pricing and terms for direct buys. Being on a GSA Schedule gives sellers an advantage since their business and products or services have already been vetted and this shortens the purchase cycle.

2. Determine Set-Aside Category – Once the government knows the type of procurement, the buyer can decide to reserve or set-aside the contract, so only a certain type of business is allowed to bid on that contract.

Set-aside contracts are issued for a number of reasons. First, the government is tasked with awarding at least 23% of their total annual contract dollars to small businesses. A set-aside limits bidders to only small businesses, or can even further reduce the bid pool to certain socio-economic categories, including veteran-owned, woman-owned, minority-owned, HUBZone, or 8(a) disadvantaged small businesses.

If the contract is large with multiple processes, it’s doubtful that this would be set-aside and therefore it’s usually awarded in a full-and-open competition where any business of any size or certification designation is allowed to bid. In fact, large multifaceted contracts are usually won by consortiums, or were a large business teams with numerous other businesses. This creates subcontracting opportunities for small businesses.

The Importance of Building Relationships with Government Buyers.

Market research and determining the set-aside category are the important first steps as the government begins its procurement lifecycle. This is why it is important to identify the government buyers in agencies that buy what you sell and to start building relationships.

The government buyers’ market research includes identifying potential vendors, and in many cases, discussing with vendors how to price a particular project, or if a single vendor can do the job, or whether it would require multiple vendors given different tasks as part of the project request.

You can help make the government buyer’s job easier by proactively reaching out and becoming part of their database of trusted vendors. Make sure your capability statement is current and shows your core competencies, differentiators, and past performance.

As a trusted vendor, the government buyer may even reach out to you regarding shaping details and requirements of the RFI or RFP/RFQ. The contracting officer now completes the actual statement of work or the work order, and then formally issue the RFP or RFQ in SAM.gov, or if the award amount falls under the Simplified Acquisition Procedures, the government buyer may reach out directly to targeted vendors for bids.

The government buyer then responds to questions within the request and answers any questions from vendors. The bid process is then closed out and bids are evaluated and awarded. The next step is the execution phase of the contract.

Your Government Registration Level (“GRL”) is your roadmap from registration to award.

FedBiz Access (“FedBiz”) has an experienced fulfillment team that takes the time to understand your business and ask questions to ensure you have a solid government contracting foundation. FedBiz is a leading government contracting business development and marketing firm that offers research and engagement strategy coaching, SAM & DSBS registrations, set-aside certifications, and GSA Schedules.

FedBiz has over 22 years of experience working with thousands of companies worldwide to help them win over $35.7 billion in awards. From registration to award, FedBiz helps businesses succeed in the government marketplace.

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