In episode 49, hosts Elizabeth Larkin and Gene Marks answer this question:
“I run a small business that cleans linens for hotels and banquet halls. I have a competitor that gets government contracts for the same type of work. Where do I go to research this?”
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Elizabeth: Welcome back to the Small Biz Ahead Podcast. Gene, how are you today?
Gene: I am doing fine, Elizabeth.
Elizabeth: Great. So today, Gene, we have a special guest here. I don’t know if you’ve noticed that we have someone else in the studio with us.
Gene: Yes. I see him standing right here in front of me.
Elizabeth: Okay, his name is Tom Skypek and he started a business called GovBizConnect and this is a business that connects small businesses with government contracts. So right after we hear from our sponsor, we’re going to get right into it about how your small business can get into government contracting.
QUESTION: How Do I Get Into Government Contracting?
Elizabeth: Okay, we’re back. Tom, can you tell us a little bit about your business?
Tom: Sure, absolutely. Thanks for having me today. So GovBizConnect is a really a cloud-based platform that connects small and large government contractors for teaming and joint venturing opportunities. One of the things a lot of folks don’t know is that every year the federal government sets aside about 20% or 100 billion dollars in contracts for small businesses and this creates an imperative for the large prime contractors to need to find the small companies and vice versa.
Elizabeth: What’s a prime contractor?
Tom: Sure. So a prime contractor is a company that is the primary point of contact and the primary executor of a government contractor. So you might think about Lockheed Martin is generally a prime contractor. Now they could be a subcontractor but generally they’re the primary accountable company for executing the government work.
Elizabeth: Okay, so lets get into our question then. This is from Loreen, she does not give us her location.
Elizabeth: So we can’t stalk her online or anything. Okay, Loreen asks:
“I run a small business that cleans linens for hotels and banquet halls. I have a competitor that gets government contracts for the same type of work. Where do I go to research this?”
Gene: Great question. It cuts to the heart of what this conversation is all about.
Elizabeth: Exactly. So we’ve touched on this topic a little bit in some of our previous podcasts and we ended up getting a ton of questions about this. So Tom is actually my colleague who also works at The Hartford and runs GovBizConnect on the side. So that’s why we invited him on today to help us answer this question.
So Gene, why don’t you take it away.
Gene: So lets go with these questions right away. So Tom, I’m a small business owner, I want to do business with the government. Can I just go onto your website, start doing that today and start bidding on projects? Sounds like it’s a little bit more complicated than that.
Tom: Yeah, so the short answer is no. So while the government, they buy everything from paper clips and toilet paper to advanced weaponry to janitorial services. There’s a lot of thinking and deliberation so a lot of people are inherently kind of … don’t want to pursue the government market because it really is … it can be a complex legal exercise. But one of the best places to start is to really think about is there a product market fit or a service market fit. So and the example you’re using from the person who submitted the question, that’s definitely a service that the government provides. So one good place to go is to check your local procurement technical assistance center. So what these are, these are government subsidized organizations all throughout the United States. They will sit down, and it’s all free consultation, a sit down and help sort of give you the initial ins and outs of getting government contracts.
Gene: How do we find a government procurement center. I’m from Philadelphia so do I? –
Tom: Sure. So if you… there’s a –
Elizabeth: They don’t want people in Philadelphia.
Tom: So if people just Google PTAC, P-T-A-C, basically you’ll be able to search by geography and it will… there’s several hundred offices throughout the United States so there’s gonna be one nearby and you just set up a time with the councilor to go in and you would introduce yourself, explain what your business does, communicate that you’re interested in exploring doing government contracts. So that would be one of the best places to start and I would absolutely start there because there are a lot of what I call sort of these hucksters out there in the government contracting community who will pay or charge small businesses fees to do what you can get for free. So go to your PTAC. That’s a great free resource. That’ll help size it up –
Elizabeth: We’ll put that in the show notes.
Tom: Yeah absolutely but back to the original question. So that’s sort of the first point is product market fit, talking with your PTAC, eventually you do need to get on what’s called a contract vehicle. So for lack of a better word, it’s sort of like a fishing license or a hunting license to be able to buy or sell services to the government. And so there’s a whole suite of contracting vehicles out there but that’s something else that your PTAC councilor could assist with, and say for the type of services or products you provide, you may want to look at getting on X or Y vehicles because – yeah.
Gene: Can you give me an example of what you mean by vehicles?
Tom: Yeah so let’s say… so there’s a big vehicle – contracting vehicle which is it’s called Alion in the federal government and it’s sort of a blanket contract to provide IT products and services.
Gene: I see.
Tom: So, if I’m a small business owner, I would want to get on the Alion contract vehicle and that is the equivalent of me getting my fishing or hunting license to then be able to sell and transact business with the government.
Gene: Got it.
Tom: Because unfortunately it’s not a matter of having a product market fit and being able to sell directly and that’s where people can get hung up is figuring out which contract vehicle is most appropriate.
Elizabeth: Does the government purposely make this complicated? Or is this just the best way they know how to do it?
Tom: Yeah, so I think… so there’s some folks there’s a lot of different camps on here, there’s a lot of opportunity to reform the acquisition process. There’s a realization increasingly that, especially these innovated firms just do not want to do business with the government there’s just no appetite. They can make plenty of money just selling in the private sector business to business so going business to government doesn’t make sense. So there are some programs out there that are trying to streamline and accelerate the process. I think one of the things that’s interesting is that the demographic shift that’s happening right now, we have 10,000 baby boomers retiring every day so you have a lot of these seasoned veterans that worked in acquisition, and so we’re actually at a point where there’s new blood coming in, the millennial group who are thinking a little bit differently about acquisition so I think we’re kind of in a rare spot where this could happen but it’s going to require some changes and legislation, but the cultural piece I do think we have an opportunity there.
Gene: So Tom, let me go back – you said that I want to sell to the government and my firm say like I want to provide IT training because that’s actually some of the stuff that we do, so whether it’s janitorial services, you know maybe you want to provide landscaping services to the government, whatever you think okay I think I might be able to sell my services or my products to the government. So you go to your local PTAC office, you face-to-face, you should meet with somebody and go see what your options are. You then want to get on, get a recommendation to join some kind of contracting vehicle, so in my case, like you would given there’s the government is a big blanket acquisition orders for IT services so perhaps I can maybe get some opportunities there. What do I do next? Like do I have to become like a certified government contractor? Do I have to take an exam? Do I have to fill out an application like what – how what do I do next?
Tom: Sure, absolutely so there are a whole suite of certifications so back start at the beginning of our discussion I talked about the hundred billion give or take that’s set aside each year for small government contractors. That’s further segmented into some goals. So women-owned businesses, veteran-owned businesses, economically disadvantaged businesses, that’s another area where your PTAC could potentially help you figure out … You get these certifications through the small business administration, some of them are self-certifications but others are a little more rigorous but that would be something that small businesses would want to take advantage of and again some of the common ones are women-owned businesses –
Gene: Right minority-owned right.
Tom: Yeah, and that’s something again the small business administration if you type in SBA certifications you’ll be able to get a nice overview of all the flavors out there. So that’s definitely something that any small business contemplating entering this market would want to do. So back to the person who entered the question they would want to see which certifications could they claim because that’s gonna help differentiate them in position –
Gene: So there’s no certification for being a bald-owned business, right? Because I would qualify for that all the other ones I would have no chance.
Tom: And I – but yeah you never know these days. One other resources that’s free that I want to mention is FedBizOpps. So it’s F-E-D-B-I-Z-O-P-P-S and it’s not the most user friendly website but every procurement every… it’s a government run –
Elizabeth: It’s a government website
Tom: Yeah, and every solicitation contract that’s issued over, I think it’s about $25,000 has to go on that website. You can do some keyword searches so again this goes back to determining that product market fit. You could go in and you could type in janitorial services and just see whose buying and you would also be able to see what contract vehicle it’s issued on. So it’s a really good free resource. Now again, full disclosure, the interface is kind of looks like it’s from 1984, but it’s functional and it will help make you smarter when you’re making your judgment whether this is right for your business.
Elizabeth: So going back to Loreen’s question, how does Loreen determine ahead of time if this is even worth doing? Like how does she make that determination? Like this – I’m gonna make enough money to make back the time and the hoops I might potentially have to jump through for this? Is there an easy way to do that?
Tom: So it’s probably a combination of the steps that we’ve sort of been discussing up to this point. So we’d be going on FedBizOpps to see okay there’s 30 contracts out there for whatever it is her business does. The average value is –
Elizabeth: Linen cleaning.
Tom: Linen cleaning, average contract value is $250K etc. etc. so she would need to do that cost benefit analysis and kind of understand, size her market effectively within the government, so linen services looks like they contract out 15 million or whatever it is and how much she thinks she could potentially capture.
Gene: But don’t you think she would… I mean… you’ve been doing this for a bit I mean sometimes I get the feeling like this system is like rigged you know like, if Loreen is gonna go in and provide linen cleaning is what she does, and the contracts are out there. Tom, do you think she’s going to run into like established companies that are already have had the contracts or they’ve already been selling to the government for years and you know, have the relationships, have the whatever, I mean it’s such a daunting thing for a business to first get into.
Tom: Absolutely, and so certainly can’t discount the personal relationships in the human dynamic but sort of what we’ve been doing at GovBizConnect is trying to help these companies because the best and quickest way for the linen company that wants to break into the business is to partner with an established company. So you could have very possibly a large prime contractor that provides a whole suite of services from let’s say, linen cleaning to janitorial services and within that contract, that the person submitted the question, could partner with that company and provide that service on that contract. So that’s why teaming and partnering is so important for the small business because it’s helps them build their corporate resume, essentially.
Elizabeth: Okay, so that brings us to your business. Can you just give us the background on how you conceived of this business, how you started it, and how you figured out there was a need for this?
Tom: Yeah, so I used to live in DC and I worked for a defense contractor, a large defense contractor, and part of my job was business development, trying to win new contracts so I quickly came to find that, “Hey even though we’re a big company we need to partner with some of these smaller organizations,” and so I was running a contract with the department of state and turns out we needed a service disabled, veteran-owned business that did weapons of mass destruction planning.
So pretty specific, these don’t grow on trees and so even though me and my colleagues had a network in this space, there was… the contract vehicle was a unique one on which it was issued on which basically meant that the relationships we had didn’t matter because those companies we couldn’t bid so I was.. it was midnight, we were trying to get the proposal out and we still couldn’t find out who we’re teaming with, which was critical, and we ended up Googling and, “I said there has to be a better way, right?” I mean with data and technology. And so it all goes back to that pain point and I started asking around my colleagues in the company, across the industry, how do you find teaming partners? Is there any an easy way? And everybody kind of echoed, no this is a pain point but it’s something that’s it’s a very niche, sort of item, but it is a really acute pain point for a lot of folks.
So I said, “Okay we’re gonna build this great database and we’re gonna overlay it with some social networking features.” And so GovBizConnect was born a couple years ago and we did a prototype, a beta, and we’ve been following the lead startup methodology with this idea of spend as little money as possible to create something valuable. Test it, if your customers like it, then you place a bigger bet so we’ve been very I’d say fanatical about, at each milestone, getting a lot feedback. What do you like? What do you don’t like? What do you want to see? So that’s where we are now, it’s exciting, we just launched our paid version and had some good meetings, actually this week in DC with some partners.
Gene: So that’s how you’re monetizing it, there’s a paid version? Who pays? Like who subscribes to this?
Tom: Sure, so small and large businesses, it’s a licensing model, so micro-business with like let’s say like five folks, they might need a license.
Tom: Larger firms could need hundreds or even thousands potentially, so yeah we have various pricing tiers but it’s companies right now so, government contractors although at some point we do plan to branch out and sell to the government as well because they also need to be able to find good qualified companies to route those set asides to so.
Gene: So let me bring this back up… Speak selfishly so getting back to… I want to provide IT training services to the government, I think that we can do that. It seems to me that the better route for a small business like mine, we have ten people, would be to partner with somebody, right? Like why don’t I already find an IT firm that’s already providing these services and maybe they can subcontract some of the work out to me, right. I don’t have to worry about all the government certification. So I would come to GovBizConnect to find that partner, wouldn’t I?
Tom: Correct. That’s our primary services facilitator because over a million companies are registered to actually do business with the government. So even if you’re the James Bond of networkers, you just … you’re not gonna have visibility into all those potential partners.
Gene: The James Bond of networkers.
Tom: So you can… and the example I cited when I was at the State Department was really specific criteria, so GovBizConnect helps make those introductions and facilitate and we’ve got some great features in the pipeline and we’re gonna try and get into some cultural pieces, employee engagement because that’s another thing companies might look good on paper but if there’s more to that chemistry piece and so that’s something that we’re actively working on solving.
Gene: And I’m assuming you don’t really vet the companies that are on your database right now it’s just a database, if I did reach out to partner with an IT firm, I don’t even know if they’re a good firm or if –
Tom: Right. Yeah, we again we definitely have plans in the future to add some additional diligence, but yeah each company would want to certainly review, are there any financial, legal outstanding risks that should be considered? Because again, a company can be great from a technical execution capacity like they could be the best IT trainers in the world, but maybe their back office is in shambles or there’s an active litigation against them. Those are all the sort of factors that you want to consider when you’re entering into a partnership as both a prime and a sub because you really are attached at the hip and your brand gets intertwined. And if you do that right it’s incredibly powerful but if it goes sideways, not so much.
Gene: I think its a point to remember that a lot of these companies that are doing business with the government, they’ve gone through all the hoops to get the ability to do business with the government and they all, no company has unlimited resources, they’re always looking for help. So if your small business can provide a service or a product that an already established government contractor can use, I think that’s your doorway in, right?
Tom: Yeah, and to just add to a finer point to the company I worked at did six billion annually in revenue so six billion. But we were at the mercy of trying to find this very specific small business. If we couldn’t bid on this particular proposal, which is about ten million, so the system, the way it’s structured really creates an imperative both ways so you would think that the power is completely skewed to the big guys that’s that’s not necessarily the case. Exactly.
Elizabeth: Now, do the small businesses ever get to be the prime on a contract?
Tom: Sure yeah absolutely. So some of the small business set aside some of that hundred billion are exclusive set asides which means only a small business could be a prime.
Tom: But the other point sort of just pigging back on the theme here is if you’re trying to break into the government contracting market, the best place is to start by teaming, building your corporate resume and that sets you up to become a prime contractor. Because one of the requirements for winning contracts is it’s a chicken and egg situation, you need to show your past performance, which is essentially your corporate resume. And so you can help build that by partnering first.
Gene: So Tom, that was great. So your website it’s GovBizConnect dot.
Gene: That’s great. And again, if you’re a small business like mine and you’re looking to get into the government market, rather than having to go through all the hoops and hurdles to get those certifications, really what Tom’s site will do is it will connect you with established companies that are already there and they need you as small businesses. So you can what partner with them and hopefully generate some revenue on your own by selling to the government so thank you, Tom that was fantastic.
Tom: Thanks for having me, I appreciate it.
Elizabeth: Yeah, thank you, Tom. So remember we will have all the links we discussed in the show notes that’s PTAC, your contracting vehicle, FedBizOpps and an article by Tom called, “Should I Become a Government Contractor” and of course a link to his website. We will be right back with Gene’s Word of Brilliance.
WORD OF BRILLIANCE: American Airlines
Elizabeth: Okay, we’re back with Gene’s Word of Brilliance. Gene, go for it.
Gene: So I’m gonna give a shout out I guess my word of brilliance I guess it’s two words today it’s American Airlines right. I mean actually promoting another company here I am a frequent American traveler and I know in the past months that a lot of airlines are in the news for not such great stuff, and a lot of that is deserved but American I just have to say as a frequent traveler, they use Twitter, Elizabeth and Tom, very very well. They have a very active Twitter it’s @AmericanAir and if you tweeted them, they will respond to you and they will respond to you pretty quickly. I mean you don’t want to be abusive, you don’t want to troll them that’s not the idea there. But the social media team –
Elizabeth: Well a little bit.
Gene: Well you know, it depends on how late your flight is. They provide good information, they will be responsive, they are well-trained I think in at least being professional and courteous because they know that passengers can pretty disgruntled, but they are an ear and I’ve used them on certain times to get the information about flights or why is this flight late or is there a problem there? And they’ve always been very responsive and they know they’re being watched so they’ll often say, “Take me to … let’s go to direct messaging” if there’s a specific issue but they’re very, very good. It’s a really good example of a customer service organization that is really relying heavily on Twitter, a social media platform, to provide that kind of service.
Elizabeth: They don’t do a lot of self promotion on Twitter, it is 100% customer – I mean they’ll do that occasional like here’s a picture of one of our jetliners landing and you know somewhere –
Gene: But it’s a good point because you think of Twitter as being like just a purely a marketing tool but here’s an example and a lot of companies are doing that and if you’re running a small business and you provide service, if your audience is on Twitter, as a lot of airline customers are, you really want to think about using Twitter as a customer service tool.
Elizabeth: What do you use Twitter for at The Marks Group?
Gene: So we use it I use it primarily myself personally for the writing that I do. So The Marks Group, my audience is small to medium-sized business owners, they are not on Twitter on one o’clock in the afternoon, they are running their businesses for God’s sake. But because I do a lot of writing, I like to promote the stuff that I write, and I like to share a lot of stuff that I mentioned, like GovBizConnect, Tom right, I’ll tweet out something about that and linking back to something I wrote. So it’s more of an informational news feed on small business news and such.
Elizabeth: Tom, what is GovBizConnect use Twitter for?
Tom: So Twitter’s been sort of a pleasant surprise for us over the last two years since we launched this, grabbed all the social media handles, LinkedIn, but Twitter really has been terrific in terms of sharing content, our own content trying to get exposure, but also, what’s been most helpful and I think your conversation alluded to this, is just sharing meaningful content to your audience so it’s not always sort of promoting GovBizConnect but we’ve actually had some nice partnership opportunities, speaking opportunities, and gotten some great exposure and also it’s a great avenue for lead generation too so one of the things too is a lot of these companies really use it to sort of brand themselves as thought leaders so it’s kind of, I think there’s multidimensional benefits I would say and definitely something small businesses should take a look at if it makes sense for them.
Elizabeth: So I’m also a frequent American Airlines flyer and I have noticed that when I tweet at them, they are they get me a response more quickly than if I were to go up to gate agent and ask a question.
Gene: I know. Don’t even get me going on that. And there have been times when a flight’s delayed and I’m looking for information on it and the gate agents… they’re not there, that’s a whole other story, and I’ve tweeted to American and they’ll provide me the oh yeah this plane is still hasn’t arrived yet or it’s held up at this airport.
Elizabeth: And for smaller business like Tom was saying for networking, I mean a lot of times when I’m researching an article that we’re working on and I want to get a source I will just Google them and the first thing that comes up is there Twitter handle and it’s so easy to tweet at someone and people write back immediately because they want the media exposure.
So they Word of Brilliance is actually American Airlines but technically it’s Twitter today. Alright, I want to thank our guest Tom Skypek of GovBizConnect, and as always Gene Marks for being here and we’ll talk to you in a few days when our next episode comes out.
Gene: Thanks, Tom.
Tom: Thanks a lot.