How the Government Begins Its Procurement Lifecycle | Episode 41

All government procurement begins with either an idea or need by a government agency. The procurement lifecycle starts with market research and determining whether the size of the contract meets the simplified acquisition threshold for a small business set-aside award. It’s important for businesses to get involved in this process early and the best way to do that is by creating relationships with government buyers.

In this episode of FedBiz’5 we host Senior Contracting Specialist and former Federal Government Contracting Official, Frank Krebs, to discuss how the government begins its contracting lifecycle.

The procurement ‘idea’ can come in the form of an internal government requirement or from the marketplace in the form of a white paper or new product or business model.

Most frequently it comes from a ‘need’, which can stem from a new project or government program having been introduced or the need to add on to an existing service or project.

Beginning Steps in the Procurement Lifecycle?

Market Research - The government starts with their market research phase. Government buyers first determine an expected contract value and a category for the contract. The expected contract value plays a large role in the type of contract to be awarded.

For example, if the award value is expected to be less than $10,000, the federal government utilizes a micro purchase and simply procures the product or services without a solicitation by using their government credit card.

If the contract value is more than $10,000, but less than $250,000, of which the majority of federal contracts fall within this range, then the government buyer utilizes the Simplified Acquisition Procedures (“SAP”). Under the Simplified Acquisition Procedures threshold, small businesses must be considered for all federal awards under $250,000 if there are two or more small business offerors expected to compete.

It is important you research all contracting opportunities in your specific industry, not just open solicitations, but expiring contracts and awards not publicly posted.

In fact, the vast majority of awards do not go through the open solicitation process. This is why you need to know your market. You must have a clearly defined plan going in. Who is spending? How are they spending? And in the federal market that is even more important because you want to be able to focus your energy and resources.

A database such as the Market Intel can provide you information on who is buying what you sell? What offices and who should you be reaching out to. This is about research and then creating relationships.

The Federal Connections Package and the Local Connections Package can help you get in front of these government buyers with your Capability Statement. This marketing gets you to the right contact within the agencies that buy what you sell.

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Transcript

How the Government’s Begins Its Procurement Lifecycle

Jesse Sherr  00:00

Hi! My name is Jesse and I work with small businesses in the Government Marketplace. 

Jesse Sherr  00:06

You're listening to FedBiz'5, where you get informed, get connected, and get results on everything government contracting. 

Jesse Sherr  00:15

Hello, and welcome to another episode of FedBiz'5. We have Frank Krebs, the senior contracting specialist at FedBiz Access to discuss the government's procurement lifecycle. Welcome back, Frank.

Frank Krebs  00:27

Hey, it's always good to be on with you, Jesse.

Jesse Sherr  00:29

So Frank, where does the government Contract Lifecycle begin? 

Frank Krebs  00:33

Well, a government procurement begins with either an idea or need by a government agency, the idea could come in the form of an internal government source, or it could come from the marketplace in the form of a white paper or new product or new business model. 

Frank Krebs  00:49

Now, it can also and most frequently comes from a need, it can stem from a new project or government program having been introduced or come from the need to add on to an existing service or program or in construction to add on to an existing facility or infrastructure.

Jesse Sherr  01:07

Now, what steps does the government initiate? 

Frank Krebs  01:10

So, at this point, the government begins their market research phase, they will first determine an expected contract value and a category for the contract. The expected contract value plays a large role in the type of contract to be awarded. Because if the value is expected to be less than $10,000, of which there's very few these days, the federal government can utilize a micro purchase and simply procure the product or services by using their government credit card. Their only requirement is that this purchase must be issued to a small business entity. 

Frank Krebs  01:45

Now if the contract value is more than $10,000, but less than $250,000, of which the majority of federal contracts fall within this range, then the government utilizes the simplified acquisition process. 

Frank Krebs  01:59

Now under a simplified acquisition, the government must obtain two or more bids from qualified vendors. These vendors must be small businesses, as determined by the Small Business Administration for the N.A.I.C.S. or "NAICS" code that the government is being awarded the contract under. For contracts valued in excess of $250,000. The government must issue a request for proposal or request for quotes, RFP or RFQ, and complete the full package posting this release on sam.gov.

Jesse Sherr  02:32

Good information, Frank, we appreciate it. Now, what's next?

Frank Krebs  02:35

Okay, now the government knows the type of procurement so it goes into the next phase of market research where they determine if there will be any set-aside. The federal  government can reserve or set-aside contracts, so only a certain type of business is allowed to bid on that contract. If the contract is very large, with multiple processes, it's doubtful that this would be set-aside and therefore it's usually awarded in a full and open competition where any business of any size or certification designation is allowed to bid. In fact, large multifaceted contracts are usually won by consortiums, or were a large business teams with numerous other businesses. 

Frank Krebs  03:20

Now set-aside contracts or contracts that limit the companies that are allowed to bid to only a single class of contractor. Now this is done for a number of reasons. First, the government is tasked with awarding at least 23% of their total annual contract dollars to small businesses. A set-aside limits bitters to only small businesses, or can even further reduce the bid pool to say Women-Owned, Veteran-Owned, 8(a), or HUBZone certified small businesses. 

Frank Krebs  03:53

Now the market research performed by the government buyers will indicate whether there are qualified businesses of a particular class that would be able to bid on the contract and if so, the government buyers typically will issue their contract as a set-aside. Now, if the market research that they perform is inconclusive, many buyers will issue a sources sought notification or a request for Information (RFI). 

Frank Krebs  04:23

Now this announcement is made through SAM.gov and informs the marketplace of the government's intent to award a contract for specific products or services and seeks answers from the marketplace regarding whether they can perform the required services or provide the products if they are a small business and or part of any social-economic class. 

Frank Krebs  04:46

The RFI or sources sought is not an invitation to bid, but simply a fact finding mission by the government buyer that will eventually lead to a contract.

Jesse Sherr  04:56

So, and correct me if I'm wrong, but all this work is completed by the contracting officer and happens prior to the marketplace ever seeing an RFP or RFQ, Right?

Frank Krebs  05:06

That's correct, Jesse. Market research is a requirement for the contracting officer, and is a very important part of the procurement process. Now, this is why at FedBiz Access, we talk to our clients about the importance of identifying contracting officers in agencies that they're trying to have their firm work in and start to build a relationship with these folks. 

Frank Krebs  05:31

Market research includes identifying potential vendors, and in many cases, talking with vendors about such items as to how to price a particular project, or if a single vendor can do the job or whether it would require multiple vendors given different tests that's being requested. Now, these are very typical and if your firm is one that the government feels comfortable in reaching out to for discussion about this work, this will put you and your firm in a much better position once the bid process begins. 

Frank Krebs  06:05

So, this is what is meant by becoming involved in the early stages of procurement planning and it's something that all prospective government contractors should strive to be a part of.

Jesse Sherr  06:17

yes, a company that is involved in these early stages can help to shape the contract and puts them in a better position to bid. That's awesome! Now, before we go, is there anything else you'd like to share?

Frank Krebs  06:27

Yes, the contracting officer will now complete the actual statement of work or the work order, they will issue the RFP or RFQ, or under the Simplified Acquisition Approach, will reach out to their targeted vendors for bid. The government will answer any questions from vendors, they will close out the bid process, evaluate the bids received and award the contract, thus beginning the execution phase of the contract.

Jesse Sherr  06:57

Excellent information Frank, once again! I think that's going to wrap it up for us, is there any final thoughts that you might have?

Frank Krebs  07:04

Jesse, the only thing is try to get involved early in the process. If you're looking for work with the government, the earlier you can get involved, the better your chances are going to be

Jesse Sherr  07:14

Solid advice. I once again thank you for coming on, Frank and Take care.

Frank Krebs  07:17

All right, thanks, Jess.

Jesse Sherr  07:22

This concludes this week's episode of FedBiz'5, where you get informed, get connected, and get results. Today's podcast is sponsored by FedBiz Access. Government contracting made simple. Visit them at FedBizAccess.com or contact them at 888-299-4498.