11/22/02

L. A. SECTION ENTERPRISE CHAPTER

MARKETING STRATEGIES SMALL BUSINESSES CAN USE TO WIN GOVERNMENT CONTRACTS

The November 5, 2002 meeting of the Los Angeles Section Enterprise Chapter gave the attendees a glimpse at the strategies small businesses utilize in winning government contracts.

Ron Oglevie of the Irvine Innovation Institute shared lessons learned in his experience in winning and performing on small government contracts, particularly those associated with the Small Business Innovation Research (SBIR) program. This program, which has been in existence slightly over a decade, has been considered a winner, having spawned small businesses and introduced innovative concepts that might otherwise have remained unknown to the government. As a result, federal agencies are now required to devote about 2.5% of their budget to SBIR. The program seeks to develop technology that provides commercial as well as government benefits. The government funds Phase I and Phase II contracts, typically to a limit of $100,000 and $750,000 respectively, to help launch a particular service or product. Phase III, intended to result in commercialization, is funded primarily by the private sector. In competing for Phases I and II, the bidder must show how the technology will be commercially viable.

Oglevie sees SBIR and related STTR (Small Business Technology Transfer) contracts as opportunities for small businesses to get started. It is easier to win an SBIR government contract than it is to obtain venture capital, primarily because rapid payback is less vital to the government than to the venture capitalist. On the other hand, when the government advertises a certain area of interest, more competitors emerge to address it. Key to doing business with the government is the recognition of the stricter ground rules imposed to assure that all competitors are treated without favoritism. These are manifested in the Federal Acquisition Regulations (FAR's), published solicitations and proposal evaluation criteria, and strict rules as to when and how buyer and seller may communicate.

Emphasizing winning proposal strategies, Oglevie stressed the need to start early, with sufficient resources to get to know both your customer and his needs and your competition and their technology. You must also present arguments that help a champion within the customer organization and help him promote your approach while convincing him that your contract performance will exceed that of the competitors. Key to a winning proposal is a short summary at the very beginning that provides the customer with a clear understanding of the technical approach, the excellence of both the technical team and the management, and a sound commercialization plan. Ron stressed the importance of a proposal evaluation briefing-win or lose. You can learn much about how to better serve the customer during contract performance and/or in future procurements.

In the marketing preceding the proposals themselves, Ron stressed the aspects suitable for doing business with federal agencies, owing to limitations imposed by the FAR's. Gathering intelligence to learn customer needs and soft-sells of ideas that meet them are more productive than a hard sell of some favorite notion. After thorough advanced preparation, pose thoughtful and respectful questions when raising issues. Seek a "champion" for your technology and help him sell it within his organization. Be alert to generic solicitations from the customer that may well indicate a desire and openness to good new ideas. Early response provides opportunities to create a favorable impression.

You can view the briefing charts for this session by clicking on the Archives of Speaker Presentations etc. button on our web site www.aiaaeenterprise.org. previous presentations include Dr. James Wertz on starting and building a small aerospace business, Selma Goldstein on the legal choices in establishing a business enterprise, and Pete Nelson on creating web sites to market your services.

By clicking on the word "links" in the lower left-hand corner of our web site you can also access a multitude of links to business organizations, venture capital firms, government agencies professional societies, publications, etc.

Consultants and businesses wishing to make potential customers aware of their services are invited to register by clicking on the Input Directory button. It's easy to do and it's free!

The next meeting of the L. A. Section Enterprise Chapter is scheduled for January 14. The speaker will be Dr. Andrew Wortman, Technical Director, ISTAR INC. His talk will include an area of special interest: that of forensic engineering expertise for application in legal proceedings. Apparently, it offers some lucrative opportunities.