How Did This Management Consulting Company Make Over $7 Million In Government Contracts? (Podcast Transcript)

                         [00:09] Richard C. Howard: Hey guys, Ricky here with the Government Sales Momentum Podcast and DOD Contract Academy, where we help sales professionals and small business owners, is understand the government contracting process so you can win more contracts with the Department of Defense and other federal agencies and today what we're going to do is take a look at more of a case study, I guess you could say. I'm going to do this over the next couple of episodes where we pick out different NAICS codes and see how companies are actually selling products and services within those NAICS codes. And this gets a little bit to what we teach in the academy as far as how do you identify your customer, how do you align your business with the way the government actually buys what you sell. Because before you ever start really, you need to understand how much is being spent each year and who's doing the buying and where you fit into the mix, where your best shot is going to be at actually going on contract with the government is even worth your time trying to sell the government. So today we're going to be looking at basically management consulting services.

                         So I'm looking under NAICS Code 54161 One. And this is specifically Administrative Management general Management Consulting Services. So you're probably thinking to yourself, that sounds pretty vague. And it is. I mean, there's a ton of stuff that could fit under here and just some even within the naked code itself, it gives examples. This could include financial Management Consulting, general Management Consulting, medical Office Management, site Selection Consulting, strategic planning, I mean, the list goes on. So you're going to fit potentially somewhere in here? Not at all. But I think it would be interesting for you to hear how a company may approach selling under this Makes code and what are some of the things you might be able to pull with the information that's actually available to everyone. Right? Because what's great about public sector is that all of the information is public. And then we'll get detailed in here, I'll show you how one company managed to bring about 7 million, a little over that in sales over the past three years. So all right, getting into it. So under this Makes Code, first and foremost, I can see exactly how much we spend over the past three years.

                        So as of today, and this is August 15, 2022, and these numbers change constantly because the government reports there's a lag in reporting for funding for contracts, there's lags in the systems that are being used. I'm using a paid application right now. But you can go to USASpending.gov for free. You can go to Sam.gov, which is where all the information is pulled from. That's up to date, 45.2 billion spent just under this NAICS code. Administrative Management Consulting Services, that's a lot of money and that's where the attraction is, especially if you haven't thought about selling to the government before because they are the single biggest purchaser of goods and services. And of course we focus on the DOD in the US military because there are some particulars in selling to them. But look, anything that we're talking about in this podcast, anything at DOD contract Academy that you see, it's going to apply to all the federal agencies. Each one has a little bit of a different languages and there's nuances, but big picture, strategy wise, it's all covered by the Federal Acquisitions Regulations, which means that the approach is pretty similar. So a lot of our clients are selling in a lot of different agencies, as am I for some of the clients that I'm doing work for. So $45.2 billion spent over the past three years. This year so far, 5.9 billion, last year, 13.7 billion was spent. So we'll see what this year's tally ends up being. Even when we go into next year, we're still going to see the 2022 numbers coming in.

                         There's a lot of reasons for that that I'm not going to get into right now. So one of the first things we want to ask ourselves is, okay, well, who, if I'm in this niche, who's doing the buying? Right? Which agencies may I want to look at? So for this particular one, we've got Department of Health and Human Services. It's actually at the top. So I can see they spent $8 billion over the past three years, which is about 16 6% of all of the spending. Following that is the US Agency for International Development. Now, for a company doing this and for our clients and what we do in the academy, you're going to want to get way more specific than just this makes code, right? So it could be if you're in financial management consulting, your target customer may be a lot different from administrative management. It's just going to depend. And there are ways to, I guess, get a little bit closer to your target there and to get more refined in your research. But for now, we're just looking at big picture. Okay, so now I've got an idea of who is really spending the money, how much they're spending. I can see the army spent about $3 billion. AFR spent 2 billion. So we have some military agencies in there as well, but I also want to have an idea of how they're doing the spending.

                         So one of the first questions we always want to answer is, do you need a GSA contract? It's the question I get more than any other. So just like I can see how much is being spent, I can see how much of this goes through GSA. So when I go through my GSA tab here, I can see that about 19 billion was spent through GSA. All right? So if you remember, 45 billion in total, 19 billion through GSA. So that's a little less than half, which is pretty significant, right? So if you are selling some type of administrative management or consulting services, do you need a GSA contract to sell to the government? The answer is no. OK, so remember, the government has a lot of ways to buy from you. GSA is one of them. So we can see big picture, a little less than half go through GSA. So if you are in this field and say, hey, this is something you want to put on your radar, you don't need it right away, but you may want it depending on who your specific customer is and how they're making purchases. So we can see that it is being used at least almost 50% of the time.

                         Now going back to how they're making purchases, some of the other things that I can see here, I want to know how are these opportunities competed, right? And we can sort through those pretty quickly. So I can see that in this naked code about 70% is full and open competition. Okay? So what that tells me is that if 70% are full and open, that means one of my strategies is going to be identifying opportunities early and then influencing those opportunities because I know they're going to be competed via solicitation at some point. In full and open means they're not set aside for small business, they're not set-aside for anything, right? It's just an open competition. So I need to have a target customer and let's say it's Health and Human Services and I need to find opportunities. I want to know what offices actually put companies on contract within Health and Human Services and I'll find those opportunities early and there's ways to do that. You can go to the academy and check it out. But we want to influence those because when the solicitation comes out, we want to be the company that their contracting officers and program managers are thinking about before the solicitation goes out. And we want an opportunity to affect that too.

                         You know, some of the best companies at selling to the government actually help the government write the solicitation. Because think about it, the program manager, the contracting officer, they are not experts at management consulting, right? You're the expert. So often an RFI or Source of salt will go out and there's plenty of podcasts that you can look up that I've put out there and others where you can see hey, how do you respond to those, what can you include? But they're basically looking to see, hey, who can actually do the work and what should be included in the solicitation, help them write it. You're doing them a favor and you're doing yourself a favor because they're going to know who you are. And I would bet those requirements you're suggesting are going to benefit your company, not your competitors. Now, if 70% of the purchases in this category are full and open, that means that 30% are not, right? So I'm looking at opportunities that aren't competed in that 30%. Some are competed under our staff, which is simplified acquisition procedures. Some aren't listed, some aren't available for competition, some are full and open competition after exclusion of sources.

                         So all this means is that all of those other opportunities were either sole source contracts to specific companies, they were set aside for maybe small business or certain types of small businesses, or there was some type of exclusion process before the full and open competition. And just depending on the app or tool you're using, that might mean that they decided to award via an IDIQ. Maybe it was an IDIQ competition amongst however many companies run there that's Indefinite Delivery, indefinite Quality Contract, which we cover in other trainings and podcasts. But okay, so this is interesting. So now I have an idea, but I also want to know if you are say you're working for a company and there's small business in there, a woman owns small business or something, or service disabled, veteran owned small business, you want to know, hey, how often are those set asides favored? So I can split that up and see within here that okay, roughly, let's see, 83% of the awards, there was no set aside used. And then the top set aside used was to Eight A sole source to Eight A companies, 3 billion. And you know, Eight A is one of the most powerful set aside. You can get an Eight A if you're not familiar with it. It basically you go through a process, you go to SBA.gov to check it out. But if you are a disadvantaged business, it's a bunch of parameters you have to meet. And you go through this certification process, you can qualify for eight A is a lot of companies build their business off of this.

                         The reason it's so powerful is because the government can award sole source contracts to companies that are eight certified with a lot of the normal requirements that you would have to go through. A lot of the hoops that a government contracting officer and program manager has to jump through are removed. So they make it easier to give social contracts to these types of companies. That makes it a lot easier on the government side to award a contract. And that's going to tie into one of the companies we're going to look at here. And I won't tell you their name, but how do they win $7 million worth of work over the past three years? And I'm going to give you a hint, it has a lot to do with their set aside. So just looking through some of the other set asides here, so I can see that woman owned small business, about 253,000,000 went to women and small businesses, service disabled, 105.

                         Now depending on what you are, you can further segment it out. You can look by major agency and see which agencies use those in different degrees, right? So I'm going to click on Department of Veterans Affairs because I'm guessing they have a higher percentage of SDV OSB awards. So let's see, the VA awarded $2.3 billion in these services over the past couple of years. And as far as set asides are concerned, 22% of those awards went to service disabled, veteran owned small businesses. So if you do own an SD VOSP, this would probably indicate that targeting the VA might be a good idea. We can see they're spending money. We can see that all the set asides, a lot of them do go to an Sdvsb. So that's just a little bit about looking at a certain NAICS code, looking at there's a lot of different parameters we can look at here, but what might our strategies be for going after some of that work? I also want to look at things like, hey, are there any GWACs being used? So we already know that GSA is probably a player. We also know that there's a lot of, I guess, competition, right. Full and open competition so you're going to be influencing requirements, developing relationships. But we did want to look at a specific company, too, as we're going through this process, and I mentioned them at the beginning, this particular business did a little bit over $7 million over the past three and a half years or so three and three quarter years.

                         Now, how did they do that? Okay, so as I'm looking and this is what's great about all of the information that's available publicly and just knowing how to sort through it and figure out how you can use that information. Right. Since all of the contracting information is public. If you find a company that is in the federal marketplace, whether they're in the DOD or selling it to any federal agency. If they're successful, we can go in and find a lot of information about who they're selling to. How they're selling, what types of contracts and we can basically reverse engineer what they've done and see if that applies to you. Can you copy what they're doing? Right, so in this case, I can see exactly who they're selling to. Right. So I'm seeing some Department of army sales. I'm seeing some to the Department of Commerce. That's interesting. What about set-aside?

                         So now I'm going to take a look at Set-aside types. Okay. A ton of eight a So almost half of these are eight A sole source contracts. Right. So when I go up here, I can see, okay, this company is an eight A program participant. Right. The rest of them were total small business and let's see, 12%. So just under a million dollars of their revenue over the past four years came in with no set aside use. So they were relying pretty heavily on that eight a sole source contract. So the takeaway here is go check out eight A at SBA.gov, see if you qualify for it. That can really help you as you're going through the system. And again, that's just taking a look at the set aside types, right? So I know that most of their work is coming in from a sole source contract. I can also look at competed, almost nothing's competed as I'm looking through what they've done, right, not available for competition. That indicates a sole source contract. Most likely simplified Acquisitions, which there's a lot to it. But basically, if the contracts are under certain dollar amounts, then that makes it easier for the contracting officers to put that money on a small business. Not competed under. SAP competed undersap. So we can see here that they have a particular strategy. They're not just going after full and open competitions like we saw in the initial research. They're using their eight A set aside and they are trying to go they're playing the small business card and going in. And it's very smart, right? There's nothing wrong with this. Small businesses do need a little bit of extra help. So you got to know where your strengths are.

                        So if you happen to be eight A and you happen to be in this category of services here, then you could absolutely go in and start targeting some of those opportunities that were for eight. You can also go in and you can recommend that the government set an opportunity aside for eight. So if you happen to be an Eight A company, you want the government to set whatever you're bidding on aside for eight because it's going to eliminate competition. It could be a sole source contract for you, or you're just competing against other eight companies, which is going to limit the battlefield significantly when you're going after that work. So hopefully you found this useful that's a little bit about this particular management consulting, NAICS Code, and one of the companies that are succeeding there. And we'll do this for a few episodes to see if it can bring you value.

                         Don't forget to check out DOD contract academy. If you're looking for our training and coaching, we help our students through the entire process. They're very successful. If you're looking for a little help in your career jumping into the public sector, we have a certification program. If you're just looking for a little bit of help, maybe you're working for a business and they're starting to target the military or another eight federal agency and you're looking for a little guidance, we could certainly help you. I would love to see you in DOD Contracts Academy. Or just keep listening to the podcast, please. Like the podcast, please leave a comment. We really appreciate it and take care.

If you enjoyed this episode, you can also check out Evaluate Your Sales Chain which is a critical piece to your federal and department of defense sales process. In this episode, I walked through the major links in the chain so you can evaluate how your federal sales process looks.