Many times a small business may be working on a government contract and they may not realize they are working on a government contract since they are not contracting directly with the government. This situation is called a second tier government contract, or a case where the company is a subcontractor (or sometimes a supplier) to a Prime contractor. In this situation, the company is not completely relieved of all the government’s rules and regulations. Almost all government contracts have what is called “Flow-Down” requirements. This is a case where the Federal Government gives mandatory flow down clauses in their contract to the prime and then requires that the Prime contractor pass this requirement along to all of their subcontractors (& sometimes to suppliers) and many times these must be passed on down the chain.
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I have had several calls this week from small businesses that are interested in doing business with the Federal Government but they obviously don't know how to or where to start. While many of the same basic marketing and selling techniques that are used successfully in commercial companies apply to government contract opportunities, there may be some nuances that are not obvious.
Is it just me or is anyone else getting tired of hearing the Federal Government threaten to shut down? It seems to happen every 3 or 4 months any more. The problem usually boils down to the Democrats and Republicans not being able to get along and play in the same sandbox so they just threaten to "do nothing" so that the government will shut down. "That ought to get a response", just like it did when you were in kindergarten. One side threatens some catastrophic event in order to draw everyone's attention to the issue (or really draw attention to themselves I think). "When the government shuts down, everyone will realize that I was right and we will get our own way"! Well, it rarely works that way in the real world. I find the parallels to today's politics to the politics of kindergarten to be alarming.
The other day I talked about how there could be a lot of funding released in the next 3 months. I think there is some evidence already of this activity beginning. For instance, in the last week the US Army announced they have issued a 5 year multiple award contract totaling up to $7B. There were 8 companies chosen and now each of these companies can compete for task orders under the multiple award agreement. Granted, this is not yet a release of funds (until one of the 8 wins the first task order) but it shows that things are starting to happen. Here is a sample of other announced major awards from the last several weeks:
There has been no shortage of news and writing about Sequestration and how that is affecting Federal Contracts. As the dust begins to settle it is becoming obvious that some of the loudest complaints about Sequestration could have been just political positioning. For instance, Dr. Stephen Fuller of George Mason University indicated last week that the cuts in the 2012 Federal Budget were more severe than the Sequestration cuts of 2013. Certainly things like threatening to shut down air traffic control are done in a grandstanding manner to draw attention to certain areas and create public sympathy for the agency facing budget cuts. There are beginning to be more and more examples of the amount of political positioning that was going on in the name of Sequestration. There also are other consequences from Sequestration that perhaps are less publicized.