Defense Contracts For Real Estate Agents? (Podcast Transcript)

                         [00:07] Richard C. Howard: Hey, guys, this is Ricky with DOD contract academy. Thanks for tuning in to the podcast this week. Right now what we're going to do is answer a question that you might not even be asking, which is, does the government actually buy anything from real estate agents? Meaning if you're a real estate agent, is there a defense contract out there for you? Is there a government contract? And the answer is yes. I often say on the podcast, the Department of Defense and other federal agencies, they're buying just about anything that you can think of and real estate is no different. There are a lot of real estate opportunities out there if you have a license.

                         Now this is something near and dear to my heart. My wife is a real estate agent. She's absolutely killing it. She's amazing. We're up here in Wingland, so shout out to Amanda Howard if you're looking for a house in Massachusetts or New Hampshire. But we're talking about the government here. So naturally I went in and investigated what type of opportunities are out there if you're a real estate agent. And this may be an interesting niche for you because I know there's a lot of competition out there, especially among real estate agents. There's millions and millions of real estate agents out there. And how do you find leads? I know that's certainly one big challenge for agents, especially the newer agents, right. Because a lot of time you're building momentum, you're working your own personal network, especially in the residential space and then in the commercial space.

                        There's a lot of learning when it comes to the commercial side of real estate. And this is going to apply to whether you're on the commercial side or the residential side. I think you'll find this interesting. Now there's a lot of commercial opportunity here and I'm going to go through, as I typically do within an industry, how do you find out how much the government's spending? Does it make sense for you to even be looking at federal acquisitions or federal contracts for your business? So let's talk about real estate.

                         Now the first thing is you can go very quickly to something like USAspending.gov to take a look at how much spending has occurred over time. I use some paid for tools as well to augment that. I think it's a little bit faster. But again, this is, you know, very quickly for free. You can go to USAspending.gov and take a look at some of the information that I'm seeing here. And then you can use something called Sam.gov to find opportunities. There are also many paid for apps and tools out there. On the more expensive side there's GovWin IQ. On the less expensive side there are things like GovTribe. There's also some if you type in I think Bid Search is one of them that I used to use that isn't bad. So depending on where you are in your journey into government contracting, you may want to eventually invest in one of those tools, but right now you don't need to. Right now if you're just thinking, hey, is this something that potentially makes sense for me? This is the episode for you.

                        I always start with before you even register your business for federal contracting because you have to register your business. You want to see is the government buying what you sell? Right? So again, I like to focus on this is DOD contract academy, so I certainly focus on defense contracts. But whether it's the Department of Defense or the Department of Energy or Homeland Security, whatever agency we're talking about, they're all regulated by the Federal Acquisitions Regulations. That's what makes it so much different from B to B or B to C sales is, it is regulated by the government. And because this is public sector, all the information is public and this is what a lot of people don't think about. So think about all of those. If you're a real estate agent, everyone you're fighting with, all the millions of real estate agents that you are competing with to try to get all your leads commercially residentially.

                         Now I want you to think about public sector for a second. OK. 23% of all of the spending, all government spending has got to it's mandated that it goes to small businesses. That's a b. Less than 1% of all small businesses ever even registered to sell to the government. Right. So do you have to own a brokerage? Do you have to register to sell to the government? Can you register your own LLC? You can certainly register your own LLC. Now you're going to have to think about I'm not coming off and I'm not trying to come off as a real estate expert here. So those are some questions that there are some great resources for you to investigate. But what I want to do is walk you through hey, is the opportunity here for you? Right, okay. I'm doing a broad search because there's a lot of when you're searching through different industries and different spending within the federal government, you can do things like you can type in just the name of an opportunity or maybe a service that you provide.

                         So let's say you were a residential real estate agent or you were involved with leasing or renting houses, something like that, right? You could type things like in there. A better way to get a broad search though is to use what's called a North American Industry Classification code. That's a NAICS code and there's a naked code attached to just about every major industry out there. So just understanding the government buys just about everything, right? There's one for real estate, right? So 531 is the first three digits of real estate and then it's usually a six digit code that will go from there. So it will get specific. There's certainly like real estate appraisals. There's real estate, I think real estate leasing. There's real Estate X number. I'm not going to get into all that, but I'm taking just a broad search. This search is going to basically encompass any federal contract over the past three years that was under the real estate Naix code. Okay? So what I can see just off the top is and again, there's going to be opportunities that go are beyond this that just aren't included because it was listed under another NAICS code. This is just numbers will change. I'm just giving you a broad picture of what real estate opportunities were put on contract the past couple of years.

                         The numbers that I'm seeing right now is that about $1.4 billion were spent under real estate NAICS codes over the past three years. Okay, so that's significant, if not 100 billion, but one $4 billion is still pretty significant, especially considering how few people are probably engaging on these opportunities, right, so 1.4 billion. Now the next thing is when we're looking at the government, okay, which agencies are actually spending the money? So a couple things that you need to know is first is the government spending money? Right? So that's my first. Are they spending money on what you sell? And then when we determine that they are, now I want to know, okay, who's your customer? Right? Because certainly that's going to be a big question for you, right? That's like getting the lead for a listing on a house or the lead for a potential buyer. Right. So with public sector work, I can go in, I can see exactly who's doing the buy.

                         In some cases, I can get down to not only the office, but the name of the people putting companies on contract. So after I ran this search, one 4 billion spent over the past three years and the top three agencies we'll call them are Department of Health and Human Services, department of the Navy, and the Air Force. Okay, obviously Air Force and Navy are both under DOD, but with the tools that I'm using, it kind of separates them out. So that gives us a quick snapshot because it's all about focus when I'm talking about government contracting. So if you're getting overwhelmed with some of the acronyms like naked codes and whatnot, you don't need to remember, all you need to understand is how to understand the way the government buys real estate services that you may offer, and more specifically, what agency is actually doing the purchasing that you want to focus on. That's a good way to start. I love to start with the Department of Defense because that's where we focus on. And of course there's a ton more detail.

                         You can go to Dodcontract Academy, which is a Dodcontract.com, and learn everything from registering your business all the way to advanced techniques, how we win contracts. We have some coaching programs and what not associated with those two. It's really great for our students. But going through here now, I see okay, I got an idea. So I see that Health and Human Services? Department of the Navy, the Department of the Air Force. What? They're each one spending. Health and Human Services spend 348,000,000, department of the Navy 155,000,000. Air Force spent 141,000,000. Of course the list goes on from there. These numbers will change. Reporting changes and numbers are constantly coming in. But some other things I can do is, I can look at how these were competed, right. Because I want to know, OK, are these going to large businesses, for instance, or small business? So remember I said that the Department of Defense and the other agencies, they're required to put small businesses on contract, 23% at minimum.

                         The DOD does a great job of putting a lot more on small business contracts. Small businesses and I'm a former acquisitions officer with the Department of Defense and my job was essentially finding companies that could solve our problem sets, whether it was a product or a solution, get them on contract and manage that contract through its lifecycle. Now and I can tell you that small businesses also react a lot quicker than large businesses. Large businesses aren't bad in nature. In fact, we need them for a lot of the bigger programs if we're building the F 35, that's not a small business job, that's a job for a big defense contractor. But if I need a real estate agent to lease out a building, well, that is not a job necessarily for a large company. So I am now going to just sort through everything that was that it gave me by, you know, we saw how much money is being spent in real estate. We saw which agencies are kind of the top three.

                         Now I want to go back in and sort by how they were competed because that's going to tell me a little bit about what and how we go after these opportunities. And I'm going to walk you through what I'm saying. So of the money that was spent, 24% of that funding was full and open competition and sorry about that, 49.2%. I was reading the wrong statistics. So about half full and open competition, what does that mean? That means on a website like Sam.gov, which is where you're going to register your company to sell to the government, also through there you're going to have public solicitations. So the Federal Acquisitions Regulations exist, I want to say primarily, but one of the primary purposes it exists is to ensure that there's fairness in competition, right? So a full and open competition means that for a real estate contract, it might be, hey, we need somebody to help us lease out so many square feet for a building. Or hey, we want to make a purchase.

                         The government wants to make several purchases over the next two years and they need real estate help in the state of I'll use Massachusetts because that's where I am. Full and open competition means anyone can bid on that so if you're an agent, you meet their qualifications, you're registered, you can now put a bid in on the solicitation. Now that means that the rest of these are not full and open competition. And what I love about that is now it means that someone went in before the Solicitation and was working with the government to figure out how to do maybe a sole source contract. Or there's several ways that the government can put you on contract. They don't all have to be full and open competition. So I can see here that some are competed under simplified acquisitions, which is a way for the government to put small businesses on contract.

                         Usually those are going to be under a million dollars. We deep dive into that for sure. But just to understand that I'm looking at exclusions of sources, which means that and some set asides, right? Which means that you can register, for instance, as a woman owned small business and get a certification in that. And some contracts are going to be set-aside for a woman owned small business. Roughly 3%, it's either three, it's between three and 5% of woman owned small business, eight, a service-disabled veteran. If you fit in hub zone, if you fit into one of these categories, that means that there's going to be a percentage of contracts that are set aside just for your type of business. That means nobody else can even bid on them. You have to have that certification. So you see why it's important to understand, does the government buy what you sell and then understand, hey, what kind of business do you own, what are you in, what business are you in? And can you actually compete for some of these contracts? Right? And I can see with roughly half not even being full and open, that's actually, I think a good sign that there are going to be some ways for you to sell to the government without even having to compete.

                         We can keep sorting through here, for instance, with set aside types. So just building off of what I just discussed with moving on small business in a day, so I can see that just under the broad real estate terms, I can see that. I would say the majority of these, there were no set aside used. So about 15% of all sales had a set aside and those went to eight, a service disabled, veteran owned business, woman owned small business, those type of set asides. That's great because I'm just going big picture right now, not going to a particular agency. We can get even more specific and say, hey, if you want to target the Air Force now I can go in and say, hey, does the Air Force prefer one particular set-aside over another? We can go in and I'm not going to bore you here, but you can go and you can look at place of performance, right? And for you that's going to be very important. If you're a residential real estate agent or if your real estate license is only good in one particular state, you might want to check out a particular state and see, OK, what agency is actually selling in that state, right? So if I go through here and I'm looking at here we have Miami, Florida, right? So if I click on Miami, Florida and maybe now I want to know which agency is actually selling in Miami, Florida. It's the department of housing and urban development. So I know that for Miami, if you're in that area, that might be who you have to target, right? So you do the same thing.

                         If I'm looking in Pennsylvania and I want to look at the major agency, it's going to be the same thing. So housing and urban development is obviously going to be who you might want to focus on if you are looking in a specific state. Okay? And there are certainly some other ways we can shift through this. And you can really do a good job of reverse engineering how to sell to the government based on maybe who your biggest competitor is. If they are successfully selling to the government, we can look at exactly what they're doing because it's all public and so will everything that you do. By the way, if you're selling to the government, we can look at who they're selling to, how they're selling, what contract vehicles they're using. All of that is very important. Now something else I like to look at besides, hey, who would I potentially be focusing on is do they use GSA? And GSA is you think about this as this is a contracted vehicle that you can apply to be on, usually referred to as GSA schedule. Some opportunities within the government are going to come out only for GSA contract holders. So this is important to know if your industry uses GSA, because if it doesn't use it that much, you don't need a GSA schedule. If it's used excessively, this is something that you can apply for as a small business. You get on the GSA schedule.

                         Now you're going to be authorized to bid on GSA opportunities. Okay? And so for this particular one, I'm looking at a couple of things. One is I could see roughly 25% of purchases went through the schedules according to, again, this is the system I'm on right now. But then I can also see some IDIQ, which is a different type of contract. Another 10% or so are going through ideas QS, some of which are owned by GSA. So I would say that if you're going to really commit to selling or doing some type of real estate transaction within the federal space, eventually you're probably going to want to be on GSA. Now of course, I also did a little bit of homework before this and I can tell you that despite take these numbers, when you look at numbers like this, you just need to realize that there's a lag in reporting and then whatever tools you're using, they're all pulling information and trying to present a picture to you. I can say that I see a lot of opportunities. When I did an opportunity search for real estate, a lot of those were through the GSA schedules. So it's something that you're going to probably want to look into if you're interested in real estate sales.

                         So again, with some industries GSA is used on 10% of the purchases, right? On others, something like office supplies, you're going to need a GSA schedule because now you're looking at a high percentage of those are going to go through GSA. So just kind of having an idea ahead of time here. Is GSA something that we're going to need to take a look at now? What type of opportunities are in here? Well, you can go in, you can do a search, go to Sam.gov, start looking for real estate opportunities. You can go to USAspending.gov, and you can take a look at what's been put on in the past. I can tell you a scan that I have done today shows just a ton of leasing office leafy, office leasing, office leasing. Leasing office space in particular is something that kept popping up over and over and over again. So if that's something you specialize in or if you're looking for a specialty, this is really interesting niche, the federal government office leasing. And then speaking to my personal focus, which is the Department of Defense, we could see that the Navy and the Air Force are doing a lot of spending within these NAICS codes.

                         Take a look at what's out there and make your own decision. Is this something for you? Is there enough, do you think there is enough spending to support the type of business that you want to have for a lot of people? My recommendation is if you're getting into defense contracting or government contracting, this should be an additional stream of income starting off to your commercial income, right. And then once you get the ball rolling, once you're registered, once you start understanding some of the principles we teach not only on this podcast, but on Dodcontract.com in the DOD Contract Academy, you're going to start understanding what you're going to need to do to sell. Right. And I'm a big fan of saying, hey, if you take anything away from this, if you're just hearing about defense contracting, government contracting for the first time, the solicitations that come out, if that's the first time you're engaging with the government, when that solicitation comes out, then I don't want to say you're too late because you can still win. But there's a lot of work that goes in before that that will make you far more competitive when you put a proposal together and try to win a contract.

                          There are a lot of podcasts that I've already done. Check those out there for you. If you want to go in-depth and just learn how to do it step by step, go to Dodcontract.com. We'd love to have you there. Thanks for listening to this episode. Remember to like the episode. Subscribe to the episode and let me know if there's something that you would like to hear about in the industry. For instance, if you'd like to know what I think, the best path forward would be for you to sell to them, and we'll cover that. All right, well, thanks again for checking us out this week, and we'll see you next time.

If you enjoyed this, you can also check out our episode on We Changed our Name where I went over why we changed our name from Government Sales Momentum to DoD Contract.