Click to Print

Tapping Into the Largest Market in the World

Selling to the government doesn't have to be a hassle for small firms anymore.
September 21, 2004
URL: http://www.entrepreneur.com/article/72730

The words "government" and "red tape" don't necessarily go together anymore for small businesses. The feds have streamlined their purchasing process, making it much easier to buy services and products from entrepreneurs and companies of all sizes. The bottom line, these days, is that you don't have to be a Fortune 500 company to sell to the U.S. government.

One small company, NetServices LLC, an IT professional services company, recently discovered just how easy the federal government's new sales cycle can be under the GSA Schedule Contract program. When the company first started, it worked primarily as a subcontractor to larger companies that held existing contracts with the government. This was a good way for a startup to enter the federal marketplace, but it was costly in the long run: The larger company billed the government and subcontracted the work to NetServices. And because the larger company held the government contract, it was in the position to absorb up to 10 percent of the hourly rate. The founders of NetServices soon realized they could generate more revenue while charging the government a lower rate if they could only sell directly to the government.

To do that, they needed access to the $66 billion that the federal government spends annually through its GSA Schedule Contracts. So just what is a GSA Schedule Contract? Simply put, it's a pre-negotiated, government-wide acquisition contract that allows federal agencies and departments to purchase products and services quickly and easily. Under this program, the government's central purchasing agency, the General Services Administration (GSA) Federal Supply Service, awards contracts to commercial businesses willing to provide services and products at stated prices and terms and conditions. Government orders are then placed directly with the awarded contractor, and deliveries are made directly to the specific government customer.

The major benefit? Entrepreneurs avoid the red tape usually associated with selling to the federal government. Because without a GSA Schedule Contract, each government buyer (from the Pentagon to the Department of Education to The White House) would have to research and identify similar products and services, publicize the potential purchase, compete and compare companies and prices, and eventually choose a vendor on a very narrow basis.

That process would be inefficient and time consuming, especially in this internet, nanosecond, get-it-done now age. By providing the government buyer with a GSA Schedule pricelist, the federal government can help them avoid long purchasing cycles and close business faster.


David I. Sonde is president of The Winvale Group, a government contracts specialist, in Washington D.C. For more information on how to secure a GSA Schedule Contract, visit www.winvale.com or call (202) 349-4033.