Government Contracting Goldilocks Equation
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Goldilocks Government Contracting Equation (GGCE) helps companies find a balanced fit in terms of agencies, partnerships, and contract access to effectively compete for and execute government contracts, without being overwhelmed or overlooked. By looking at these factors during the 4th Quarter instead of chasing everything that pops up, small and new government contractors can set themselves up for success in the next fiscal year that starts in October.
For a quick refresher, the famous children’s story Goldilocks tells a tale of a young girl who ventured into three bears house and sampled their porridge, chairs, and beds until she found the ones that were “just right”; for her. Recall, the bears had options that were too hot, too cold and just right, too hard, too soft, and just right, and too big, too small, and just right.
Government contracting can be a lucrative and rewarding avenue for businesses of all sizes. However, for small businesses and new entrants, navigating the complex world of government procurement can be an especially daunting task. Small businesses and new entrants in the government contracting market are bombarded with a cornucopia of information, jargon, and options.
Compared to the commercial industry government contracting has different rules to learn, more restrictive types of contracting to understand, and exponentially more red tape to navigate. These market factors are amplified during the fiscal 4th quarter when the government traditionally spends more of its budget than in other quarters and releases a higher volume of opportunities.
If you fall into this category and are currently feeling the pressure to pursue every opportunity that comes across the desk, I encourage you to take a step back and consider what I refer to as the Goldilocks Government Contracting Equation.
The Goldilocks Government Contracting Equation (GGCE) helps companies find a balanced fit in terms of agencies, partnerships, and contract access to effectively compete for and execute government contracts, without being overwhelmed or overlooked. By looking at these factors during the 4th Quarter instead of chasing everything that pops up, small and new government contractors can set themselves up for success in the next fiscal year that starts in October.
While most small and new government contractors don’t have the runway to pursue a trial-and-error strategy like Goldilocks did at the bears house, there’s a simple yet effective equation and directly applicable lessons that can be extracted from the story.
Too Cold: Not Enough/The Right Partnerships:
One of the key factors in government contracting success is forming strategic partnerships. Small businesses and new entrants that lack the appropriate teaming partners undoubtedly find themselves at a disadvantage when pursuing government contracts. Contracts have increasingly consolidated requirements, necessitating teaming strategies that allow companies to tackle more capabilities on fewer contract actions. Companies that lack equitable teaming relationships face difficulties in fulfilling project requirements and challenges competing effectively. Without a well-aligned team, it can be challenging to gain a competitive edge.
Too Hot: Too Many Teaming Partners/Too Much Distraction:
On the other end of the spectrum, having an excessive number of teaming partners can also hinder small businesses. Juggling multiple partnerships can lead to distractions, diluted resources, and conflicting priorities. It is crucial to strike the right balance by carefully selecting teaming partners that align with the business’s capabilities, values, and goals. Engaging with too many partners may result in divided attention, increased administrative burden, and reduced efficiency.
Government contractors need to find partners who complement their strengths, compensate for their weaknesses, and create a mutually beneficial alliance that enhances competitiveness. The rule of three
isn’t just applicable to the tale of Goldilocks, it’s well applied to supply chain and teaming resiliency. Having at least three teaming partners for each capability gap ensures that if one firm can’t perform there are two backups. Small businesses can seek to ensure they’re on three different teams for bid opportunities to ensure they have the highest likelihood of success if one or more isn’t awarded.
Ensuring a balance of diversity and resiliency creates a “just right” teaming strategy.
Too Big: Overreaching/Too Much Contract Spread:
In an eagerness to secure contracts, small businesses may sometimes overextend themselves by pursuing too many contract vehicles simultaneously. This is especially tempting during Q4 when there is typically a higher rush of opportunities out of multiple agencies.
This approach can strain resources, hamper efficiency, and dilute focus. Pursuing too many contract vehicles can leave a company overreaching and stretching their capabilities to a breaking point, damaging agency relationships in the process.
Too Small: Growth Limited by Too Few or Too Small Contract Vehicles:
On the other end of the spectrum, limiting business opportunities to only a few or too small contract vehicles can impede growth. Contract vehicles with high contract ceilings, long Periods of Performance typically have higher numbers of awardees.
These tend to be higher in competition and risky for small businesses to depend on entirely. Alternatively, contracts that are issued for a year or less tend not to have the weight to add substantial value to past performance and tend to be for lower dollar values over the lifetime.
It is advisable for small businesses to be strategic in selecting the contract vehicles that align best with their capabilities and target markets. By focusing efforts on a few well-chosen contract vehicles, businesses can maximize their chances of success.
Small businesses should aim to pursue a diverse range of contract vehicles and types, such as sole source/direct award, multiple-award contracts, Government Wide Acquisition Contracts, and Non-traditional sources such as Other Transactions to expand their market reach.
Diversification of contract vehicles ensures a broader pool of potential contracts and a reduced reliance on a single vehicle for revenue generation.
Too Hard: Too Many Agency Relationships, Not Enough Focus:
It’s often tempting for small and new businesses to try to please everyone and this is never a successful approach. Trying to approach every agency that releases an opportunity that seems to fit is a recipe for burnout and burned relationships. Attempting to engage and build relationships with too many agencies simultaneously can lead to a lack of focus and diminishing ability to understand specific agency requirements.
Too Soft: Too Few Agency Relationships, Not Enough Champions:
Conversely, having too few agency relationships can limit a small business’ exposure and access to valuable opportunities. In government contracting, having champions within agencies who advocate for your business is crucial. Small businesses should actively seek out agency relationships, cultivate partnerships with influential individuals, and engage in networking opportunities to expand their reach.
Building strong relationships within agencies can help businesses stay informed, gain insights, and increase their chances of securing contracts.
It’s essential for small businesses to strategically select agencies that align with their own expertise, mission, and growth plans. Focusing efforts on a manageable number of agencies allows for more effective resource allocation, stronger relationships, and increased chances of long-term high value relationships.
By concentrating efforts on no more than three specific agency relationships, companies can develop a deeper understanding of those agency needs and increase their likelihood of success.
By striking the right balance between relationships, opportunity, and capability, businesses can unlock the potential for success in government contracting. It’s crucial to remember that the Goldilocks Equation is not a one-time calculation but an ongoing process. As a company evolves, so too should its evaluation of the government contracts landscape in terms of contract vehicles, agencies, and teaming partners, to ensure continued growth and profitability.
Government contracting presents a wealth of opportunities for businesses willing to navigate the complexities. The Goldilocks Equation for Government Contracting emphasizes the importance of finding contracts that are neither too big nor too small but just right, having a focused but diverse agency footprint, and building a resilient and redundant teaming portfolio. By carefully assessing capabilities, aligning with strategic goals, evaluating capacity and risk, and understanding the competitive landscape, businesses can secure contracts that allow for sustainable growth and success.
Remember, in government contracting, the path to prosperity lies in finding the perfect balance.
Contact Us for assistance in achieving your goals.