- Subcontractors will have ample opportunity in government contracting for the rest of 2018 and into 2019.
- Make yourself visible, and tell the story of how you are increasing certainty on the projects you undertake.
- Other strategies include teaming up with other contractors and bidding on RFPs for work related to your main offerings.
Subcontractors have prime opportunities to develop their government business over the next year. Increasing competition for government dollars within a shrinking pie, though, means it’s high time they modernize their efforts, according to Onvia’s latest research.
When Onvia surveyed all types of contractors for its Government Contractor Confidence Index it found a healthy government market but with lower certainty. The company’s new prediction for overall government sales this year is for 3.1 percent growth, almost two points lower than in 2017.
Companies specializing in infrastructure solutions are expecting the smallest growth over the rest of the year while also having the greatest downward adjustment in growth expectations. High labor costs, a more competitive government market, and an expectation of more constrained agency budgets are the main headwinds.
The early bird may not get to keep the worm
Still, there is a unique opening for new entrants in the government market this year. The gap between firms that are growing their government business and those losing it is narrowing. According to Onvia, this represents an increasingly competitive market where “brand name or past wins may not be sufficient to support further growth.” Companies must increasingly identify their own competitive advantages and exploit them—or lose to smarter, nimbler firms seeking to add more government contracts or snag their first one.
The average surveyed firm earns 19 percent of its revenue from selling to the government.
Small to medium-sized subcontractors have good chances of getting or increasing government business, and the net earnings can be significant. The average surveyed firm earns 19 percent of its revenue from selling to the government. For many small contractors, state and local government business actually buoys their revenue. Of all firms selling to the government, 84 percent serves at least one level of the state, local and educational (SLED) government markets. The local sector of SLED includes city, county, and special districts.
Onvia also reported that smart contractors who sell to governments are still planning on growth. However, in order to meet their goals they are getting smarter about how they compete for government dollars. Here are five tactics subcontractors can use to increase their government business through 2019.
Perhaps you have started using a new scheduling or project management tool. Maybe you have pioneered a new safety initiative for particular project types. Or maybe you are reducing rework and claims by using a highly effective quality control process.
Get the word out and stay visible to people in this market by inviting your government contacts to a Lunch and Learn at a project to show off your initiatives. Finished a project? Show off the good work you’ve done. Work with your design and engineering teams, and invite your government contacts to tour a recently completed facility to learn about energy efficient installations or other features that reduce the lifetime costs of a building.Stay visible to people in this market by inviting your government contacts to a Lunch and Learn at a project to show off your initiatives. Click To Tweet
Show your government contacts how your company is approaching the building process to make it more predictable and less risky.
Enlist government experts
Frontline salespeople are a key aspect of doing business with governments. Some firms grow their government businesses by increasing their sales and marketing resources with a focus on people who have government experience. Others are setting up divisions focused on capturing new government business. Having people on staff or hiring consultants who know and understand the public sector can speed up your efforts.
Team with contractors
Companies are also aggressively seeking partners to team up with to grow their government businesses. They start by expanding their relationships with potential partners so they are positioned for subcontract opportunities. For subcontractors, the obvious partner is a GC, but don’t overlook teaming with others in complimentary trades.
Find an opening
It’s easy to get tunnel vision as a tradesperson because you tend to focus is on just one aspect of construction. Remember: Even your one corner of the industry has many dimensions. Expand your view and find new areas to pursue. For instance, to get your foot in the door you might bid on a property maintenance RFP which could eventually lead to other contracts for new construction or renovations.
Be the solution
Increasingly, government purchasers are looking for contractors who can offer solutions that make their jobs easier. They’re short on staff and time, so pay close attention to how you structure your proposals. Make them easy to read by putting them through a readability analysis. Include images, diagrams and other visuals that tell the story quickly and clearly. Most important, answer the questions posed on the RFP by saying specifically how you will meet the requirements.
Use all your tools
Tap into the resources on government contracting. The Small Business Administration offers extensive help. There are over 300 Procurement Technical Assistance Centers that can help you tackle the government marketplace. Through the Association of Procurement Technical Assistance Centers you also have access to a network of experienced counselors as well as wise perspectives on government agency requirements and initiatives.