1

8(a) Company Best PracticesPresented By: Michael Perch, PMP

2

With SCORE, You Are Not Alone on Your Journey

For over 50 years, SCORE has served as America’s premier source of free business mentoring and education.

As a resource partner of the U.S. Small Business Administration (SBA), SCORE has helped more than 11 million entrepreneurs through mentoring, workshops and educational resources since 1964.

3

SCORE Can Help You Find the Way Ahead

• Free one-on-one business counseling and mentoring

• Business advisory services

• Low cost local workshops

• Free templates and recorded webinars

To meet with a mentor or learn more about SCORE’s resources, visit washingtondc.score.org

4

Instructor: Michael Perch

• 27 Years Experience in Federal Government Contracting, program management, training, and curriculum development

• Owned an 8(a) audio visual systems integration firm for 17 years, sold it in 2006• M.S. Degree in Government Contracts from George Washington University Law

School• Started RMC in 2009

• Work with small disadvantaged businesses to gain admission to and operate within the federal 8(a) Program

• Work with firms to identify and obtain federal contracting vehicles, including GSA schedules

• Train, educate and instruct on government contracting topics

5

Road Map Consulting, LLC.

• Federal Procurement Management Consulting and Training Firm• Grown to over one hundred clients in the past year• ISO 9001:2015 Certified • Provide training and continued learning to organizations large to small

• On GSA Professional Services Schedule, Nation-wide Training state government IDIQ, Navy BPA

• Assist companies with GSA Schedule Proposal Support, VETS First, Business Development, Contract Administration, etc..

• Expertise in providing a strategic “Road Map” for federal government contracting and successful business practices

• Large Business Clients – Navy Supply Corps School, George Mason University, Ernst & Young

6

Facts About 8(a) Certification

• Over 90% of the top 100 contractors of any minority group are or formerly were 8(a) certified

• The SBA returns 90% of all applications as incomplete and more than 70% are denied

• The Washington, DC Metropolitan area has the highest concentration of 8(a) certified companies, accounting for 24% of the total number of 8(a) companies

• It is tougher than ever to get into the 8(a) program - the SBA has shifted its focus to allowing established firm into the program rather than start-ups

• Strategic sourcing and streamlined acquisition processes are threatening the number of 8(a) sole-sourced contracts

7

Facts About 8(a) Certification (cont’d)

• In 2003 there were 10,000 8(a) firms, in 2010 - 8,200, today there are 5,500

• In 2011 the average 8(a) contract amounted to $166,000, almost three times larger than the size of the average federal government contract that year

• Over 70% of all 8(a) contractors NEVER receive even ONE 8(a) contract during their 9 year program term

• 8(a) contracts take about 1/10 the time and effort to be awarded compared to most other contract acquisition methods

• The government does not have 8(a) small business goals, only SDB goals

8

Things to Know About 8(a) Certification

• Understand what being 8(a) Certified means to the world outside of the SBA

• Negative view from some in industry

• Strong from Sole Source standpoint

• Understand that the SBA will be supportive in attaining your goals –but the SBA 8(a) is a self-marketing program

• Remember that getting SBA 8(a) Certified is a strategic step along the way of building your company’s business development efforts, but it is not the only step

9

Benefits of The 8(a) Program

• Participants can receive sole-source contracts, up to a ceiling of $4 million for goods and services and $6.5 million for manufacturing.

• 8(a) firms are able to form joint ventures and teams to bid on contracts, thereby enhancing the firms ability to perform larger prime contracts

• Mentor-Protégé Program• Nine year program tenure• Agencies have a SDB goal, government wide 5% of their acquisition

budget (no such thing as an 8(a) goal)• Prime Contractors are incentivized to subcontract to 8(a)’s to meet

their sub-contracting goals

10

8(a) Company Best Practices

• See the end at the beginning

• Map your destiny – do you want to sell after your tenure in the program or do you want to hand off to your children?

• Don’t waste time – 9 years goes by quickly

• Make progress every day

• Model yourself after a success story

• Build a strong team

11

8(a) Company Best Practices (cont’d)

• Grow your personal qualifications

• Grow your corporate qualifications

• Develop a niche that no one else does and get good at it

• Understand organizational behavior - as you grow, the dynamics around you will change and challenge your managerial talents

12

The Changing Federal Procurement Landscape

• Federal budget deficits are forcing agencies to do more with less

• Sequestration – smaller budgets

• An increasing percentage of federal government procurement experts are retiring

• Increasing number of firms entering into the federal procurement market

• SBA and its portfolio of 8(a) companies are heavily scrutinized

• Other small business socio-economic set-asides (ED/WOSB, SD/VOSB) increasing in numbers

13

Results of The Changing Landscape

• Fierce price competition for contract awards• Lowest Price Technically Acceptable (LPTA) basis of award increasing vs.

Best Value • Agencies are moving heavily towards strategic sourcing

• Increased usage of Government-Wide Acquisition Contracts (GWACs) (e.g. NASA SEWP, GSA 8(a) STARS, GSA OASIS)

• And utilizing their own inter-agency Indefinite Delivery Indefinite Quantity (IDIQ) contract vehicles, (e.g. EAGLE II)

• High number of contracts that were 8(a) contracts are being pulled from the program and placed into agency specific contract vehicles and GWAC’s or small business competition

• 8(a) sole source awards are dwindling

14

Types of Contracts

• 8(a) Sole Source

• 8(a) Set-Aside Open Competition

• Indefinite Delivery and Indefinite Quantity (IDIQ)

• Firm fixed price

• Cost reimbursement plus fixed fee

• Time and materials

15

Types of Contracts

Contractor Risk Assessment

16

Contract Vehicles

• IDIQs and GWACs are quickly becoming how most agencies approach procurement • Federal Supply Schedules – GSA and VA Multiple Award Schedules • A contract vehicle narrows the field of competition because only the companies that

are on the contract vehicle can bid on the task orders • Agencies use them because they can expedite the procurement process, but you can

use it to your advantage- Because there is less competition it is easier to win contracts

• Major Contract Vehicles: • EAGLE II - IT services• ALLIANT- IT services • CIO-SP3 – IT services• NASA SEWP – IT Services

17

I am 8(a) – What are my First Steps?

• Explore GSA Schedules and determine if it makes sense for your firm, if so:• Get on a GSA Schedule for the products and services that you offer

• Expand service offerings to “turn-key” to create competitive advantage where possible

• Get any and all other relevant certifications• Development core marketing material• Ensure SAM profile and Small Business Dynamic Search profile is up to date• Conduct market research!• Create FBO profile• Create FPDS account

18

I am 8(a) – What are my First Steps?

• Register with all of the major prime contractors (or all relevant Primes) as a subcontractor (ex. Washington Technology Magazine Top 100)

• Register on targeted federal government agency’s website as an 8(a) company

• Develop and target business matchmaking events and industry days occurring over the next year

• Identify potential teaming partners• Identify competition• Marketing, marketing, marketing…

19

Strategic Planning

• Identifying the strategic plan – Federal Government Market

• Understanding the mission of the government customer

• Getting first hand information on agency funding levels

• Understanding the roles of Government Officials

• Establishing relationships with various Government agencies

• Understanding contracting vehicles

20

Strategic Marketing Steps

• Identifying a Strategic Plan in the Federal Marketplace

1. Conduct market research to identify targeted Agencies

2. Understand the mission of the government customer

3. Get first hand information on agency funding levels

4. Understanding the roles of government officials

5. Establishing relationships with the various government agencies

6. Understanding the agency’s procurement methods

21

Market Research

• Understand targeted Agency missions • Determine targeted Agencies spend relative to your NAICS, PSC, contract

vehicles and designations• Identify Agency small business points of contact • Visit Agency Small Business Office with Agenda

• How can your firm help the Agency• Identify who the current players are on a targeted contract/contract vehicle

• Identify Contracting Officer, COTR/COR and Program Officer• Determine current contract holders• Determine incumbent contract holder and their status on the contract

22

Key Strategic Steps to Growth and Team Building

• Establish relationship with COTR

• Position company to be the “go to” company

• Build strong team of staff members and team members to support you

• Supplement your 8(a) designation with “complementary” contract vehicles

• GSA Schedule

• IDIQ

• BOA

23

Importance of Designations and Certifications

• Supplement your 8(a) designation with other designations and contract vehicles

• GSA Schedule• HUBZone• BPAs/IDIQs

• The government and large prime contractors prefer qualified companies

• Does your competition have more certifications than you?• Where can you improve, both from and organizational and personal

standpoint?• ISO 9000,CMMI, facility clearances, security clearances, etc..

24

Key Players and Their Roles

• Small Business Administration (SBA):

• Serves as the approving authority to your contract

• Monitors how you are performing in the program

• Advocates and Mediates

• Office of Small Disadvantaged Business Utilization (OSDBU):

• The clearing house for small businesses and government staff

25

Key Players and Their Roles (cont’d)

• Contracting Officer’s Technical Representative (COTR) • Manages Overall Contract activities.• BUYS SERVICES• Manages day to day task on contract.

• Contracting Officer (CO) • Manages all contract related issues• Processes invoices• Monitors contract cost

• Procurement Center Representative (PCR): • Works in SBA and federal buying centers to increase the small business share of

federal procurement awards• Initiate small business set asides• Provides counseling for small companies

26

Identifying Potential Contracts

• Determine which agency purchases your services or products www.fpds.gov - Reports section.

• Obtain a listing of agency forecasts

• Obtain a listing of active 8(a) contracts

• Conduct intelligence research to identify potential contracting opportunities and determine a strategic plan

• Often times, if the RFP has been announced in www.fedbiz.opps it may be too late. However, a Sources Sought Announcement is your chance to market.

27

Steps for Intelligence Research

• Determine who are the players on the contract:

• Identify COTR and Contracting Officer

• Identify incumbent and their status on competing on contract

• If incumbent is eligible, potential teaming partner

• If incumbent is ineligible, identify key personnel on contract

• Obtain copy of winning proposal and Statement of Work (SOW) from the Freedom of Information Act (FOIA).

28

Intelligence Research Tools

• Free Services:• Federal Procurement Data System (FPDS)• USA Spending• Federal Business Opportunities• Competitors’ Websites

• Pay for Services:• GovWin• Bidspeed• BGOV• Epipeline

29

Winning Contracts

• Research, Research, Research!

• Established companies have positions based solely on research.

• The research never ends

• Contract Vehicles

• Agencies are increasing usage of contract vehicles

• At some agencies you must be on a vehicle if you want to fully penetrate the agency

• You have to compete to get your company name out

30

Winning Contracts (cont’d)

• Remember that after you have put all the recommended steps in place, it boils down to a personal relationship with COTRs and COs.

• White papers – a BD’s best friend• Put a marketing calendar together, divide into three sections –

• October thru December – Market Research Planning • January thru June – Developing relationships and obtaining Intel• July thru September – Proposal writing

• Mandatory NO Vacation Rule for all BD personnel from July through September.

• Develop a brand that your CO and COTRs will recognize and be visible

31

Teaming Lessons

• When establishing teaming relationships:

• Ensure that everyone has the same vision

• The partnership compliments the strengths and weakness of both companies

• Establish ground rules and make sure they are clear through your Teaming Agreement

• Obtain a corporate attorney whose interest is for the benefit of the company

• Progression – NDA – Teaming Agreement - Subcontract

32

Teaming Lessons (cont’d)

• Make sure your teaming partner has a good reputation. Do your homework. It is a marriage.

• If you are a new 8(a) company, make sure you understand the game; the large 8(a) contractor may try to take advantage of your vulnerability.

• If you are a subcontractor, make sure you establish how and when you will get paid.

33

Teaming Lessons (cont’d)

• If contract is heavy with labor and other direct costs, negotiate with the government for bi-monthly invoices.

• If your subcontractor is a larger company, negotiate to have them to offset some of the proposal cost.

• You do not have to accept your teaming partner’s CTA

34

Building a Strong Team

• Build strong team of staff members and team members to support you

• Hire strong, energetic, proven BD personnel

• Hire people that you trust à you are married to your decisions

• Mixing business and personal is a dangerous slope

• Have go-to teaming partners that can fulfill all areas of a contract

• Ensure that you have the resources to complete a project

• Build a core of companies and personnel that makes your company more rounded and better positioned in the marketplace

35

Mentor-Protégé Program

• Allows 8(a) firms the ability to form a strategic alliance to foster growth• Relationship purpose

• Enhance capabilities of Protégé through financial, technical and contracting support

• Protégé must –• Be the 8(a) firm• Be in the developmental stage• Never have received SS 8(a) award

• Mentor must -• Demonstrate commitment to the 8(a) firm• Be in good standing with the government • Have the means and experience to act as a mentor

• Ability to form 8(a) Joint Venture

36

Finding a Mentor

• Finding a Mentor is not always easy• The best Mentors are -

• Companies that you have done businesses with in the past• Companies that compliment your capabilities• Companies that strengthen your firms weak spots• Former 8(a) companies

• How to identify a new Mentor?• Market your company, let firms know you are interested in

teaming• Conduct market research• Ask your BOS, CO, COR, etc..

37

Sales and Marketing Lessons

• Business Development• Cold calls• Establish and build relationships

• Marketing: • Supports BD, brand, websites, brochures

• Stick close to your sales person to ensure performance, develop a monitoring tool for tracking performance

• Establish files for marketing materials, always a working document• Marketing materials should not pigeon hole your company. You will

limit opportunities.

38

Strategic Business Plan

1. Establish goals and conduct SWOT analysis

2. Enhance capability package 3. Conduct market research on federal agencies

4. Register and connect Client with top Contractors

for subcontracting opportunities

6. Form long-term relationships with prime

contractors

7. Create a GSA E-buy database based on E-buy

opportunities

5. Establish targeted agencies and contract vehicles

39

Capture Management8. RMC identifies

potential opportunities

9. Establish strategy to pursue selected

opportunities

10. Execute strategy to

position and bid

11. Prepare proposal/ negotiate

subcontracts

12. Win business!

40

Business Financing Lessons

• Understand you will need upfront money when you win a contract for payroll, hiring, etc.

• Banks will usually require 3 years worth of tax returns when applying for a loan, a profit and loss statement, business plan and sales forecast.

• Loans are personally guaranteed and collateralized by owners, based on owners credit.

• Establish a good working relationship with a bank.• RFP’s may request financing information, banks can provide a contingency

letter.• Alternative modes of financing do exist (e.x. Factoring, Invoice Based

Financing, etc..)

41

RMC Case Studies and Advice

• Established relationship as a sub, pays off when 8(a) certification is achieved not only with the government but with the big primes

• After getting your 8(a) form a mentor-protégé with someone who knows you well

• Get your dynamic business search criteria in order – a lot of CO’s and COTR frequently use it

• Get to know your congressmen and senators. The relationship can pay dividends.

42

Transitioning Out of The 8(a) Program

• Map out a ten year Capture Management Plan for targeted agencies and GWAC’s

• Target Mentor-Protégé Program for Strategic Business Development efforts

• Cut overhead and General and Administrative costs to make your indirect rates competitive

• Acquire key BD and Technical personnel that can augment your Capture Management Plan

• Identify a Protégé

43

Mandatory Company Documents

• Capability Statement• Capability Brief• Capability PowerPoint Presentation• Project Summaries• Teaming Agreement• Non-Disclosure Agreement• Non-Compete or Employee Agreement• Mentor Protégé Agreement• Proposal Template• Pricing Template • Joint Venture Agreement

44

Resource Listing

• SCORE – www.score.org

• Road Map Consulting – www.roadmapcontracting.com

• SBA – www.sba.gov

• Federal Procurement Data System – www.fpds.gov

• USA Spending – www.usaspending.gov

• Federal Acquisition Regulations (FAR) - www.acquisition.gov/far

• Federal Business Opportunities – www.fbo.gov

• System for Award Management (SAM) – www.sam.gov

• GSA eBuy – www.ebuy.gsa.gov

45

Q&A

Michael Perch, Managing Director

Road Map Consulting, LLC

1800 Diagonal Road, Suite 600

Alexandria, Virginia 22314

(703) 286-5426

mperch@roadmapc.com

www.roadmapcontracting.com

46