The Defense Department procurement process can be confusing and complicated. There are a variety of contract types – each with its own pluses and minuses. The regulations can be daunting since they seem to be the size of the tax code. The competition for contracts can be fierce. There is a lot of paperwork. But Defense contracting can be profitable and rewarding.
Defense Department purchases typically begin at one of three points:
- sole source procurement
- procurement under an existing multiple award contract
- normal procurement
Sole source procurements are made when there is only one company that can fulfill the contract. This procurement is rare and must be documented very well by the government. You are more likely to get a sole source procurement once you have some government contracts and have an open contract vehicle available.
Multiple Award Contracts
Procurements under an existing multiple award contract are becoming much more common. Multiple award contracts (MAC) such as GSA schedules, Navy Seaport-e and Air Force NETCENTS II involve companies obtaining a contract and then compete for task orders. Only those companies with a multiple award contract can compete for the task orders and task orders are the work. MAC’s are valuable since the number of companies that can compete for the resulting task orders is much smaller. The process for obtaining a MAC is similar to acquisitions over $25,000 discussed below.
One type of multiple award contracts are Broad Agency Announcements or BAA's. BAA's are solicitations issued by an agency when it seeks basic research work. Topics of interest are presented and companies and universities submit proposals with possible solutions needing funding.
Normal procurement is split between simplified acquisitions (those below $25,000) and all the rest.
Simplified acquisitions are purchases under $25,000 and require the government purchasing agent to obtain quotes either orally or through a short written quote. Then a purchase order is issued to the lowest responsible bidder. The Navy says that 98% of their transactions are below $25,000 meaning there is billions of dollars available to small companies. Simplified acquisitions are not advertised so to get these contracts you have to get in front of the purchasing people so they will call and get a quote from you.
Purchases Over $25,000
Purchases over $25,000 are publicized on Federal Business Opportunities website. On this website you will find Requests for Proposals (RFP’s) for practically everything the government purchases. Review the RFP summaries carefully and when you find one of interest download the RFP documents. Read the documents very carefully and write a proposal in response and in complete compliance with the RFP documents. Make sure you know when the proposal is due and get your proposal submitted before the due date and time. Late proposals are rejected.
Proposals are evaluated by the government according to the procedures listed in the RFP. Sometimes there may be questions asked but not always. Most of the time the decision is made based solely on your proposal so be sure everything is in it or you may lose the opportunity.
Once you are awarded the contract a contracting officer will send you a letter and contact you to negotiate a contract. If negotiations go well a contract will be finalized. Some purchases will not require negotiations so the government will issue you a purchase order. Be sure you read all documents carefully and fully understand what they mean. Contracting with the Defense Department can be complicated – better to know what you are agreeing to than finding out after signing a legally binding contract.
It is now time to complete the contract and obtain more work.