Selling to Federal Government |
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While the federal government as a whole is the largest buyer of goods and services in the world, in a practical sense your customer is not the federal government. Rather, the customer is the departments, agencies, bureaus, and commissions that make up the federal government. Within these components of the government are literally thousands of buyers - your potential customers.
Each federal agency has a budget set by Congress which it must allocate over the course of the fiscal year (October to September) to fulfill its mission to the best of its ability. Agencies have some flexibility to reallocate budgets during the year to reflect changing spending priorities, but they cannot exceed their overall budget authorization. An agency's budgeting process - which determines in general terms what types of products and services the agency will purchase during the fiscal year - begins prior to the beginning of the fiscal year, and might not be finalized until well into the first quarter. Because of the budgeting process and budget constraints, high-value procurements have longer lead times.
TIP: Experienced government contractors know that the end of the government's fiscal year is one of the best times to get contracts. Agencies that have not spent their entire budgets risk losing unspent portions when the fiscal year expires, and might be eager to make quick purchases before the money disappears.
Agencies use many different types of purchasing methods to identify potential suppliers and award contracts or purchase orders. These include noncompetitive micropurchases under $3,000, sealed bids, and negotiated contracts. In addition, many products and services commonly used by more than one agency, such as information technology, office furniture, and telecommunications services, are purchased using consolidated purchasing contracts. These contracts allow contractors to negotiate prices and terms with one agency. Other agencies can then easily purchase the products and services as needed according to the terms of the single contract. Click here for more specific information about the procurement methods used by the federal government.
The type of products or services you offer, their value, and the frequency of purchase will affect what acquisition methods agencies will use to procure your offerings. The likely acquisition method, in turn, influences what marketing methods you should use in your efforts to sell to the federal government.
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