Trends in Marketing
IT/Telecom Service to the Government
by: Maria Montana
Copyright
2001, Faulkner Information Services. All Rights Reserved.
Docid: 00017718
Publication
Date: 0110
Publication
Type: MARKET
Preview
The government wants your business! Stories on e-business
and e-commerce make the news nightly. Enterprising entities looking to call the government a client have more opportunities
than ever before. That big sleeping giant is changing the way it does business. Uncle Sam is making the inevitable and inexorable
move to bring his game to the Internet playing field. Consequently, the rules are changing. Any IT or telecom company needs
to understand how, why, and when the new rules, be it policies or regulations, take effect. Playing the game according to
the new rules is only half the strategy. The other half of the strategy is making your business a more favorable teammate.
Report Contents:
Executive Summary
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The US government offers $202.3 billion in procurement
opportunities for businesses. Uncle Sam is actively recruiting team
members to supply products and services.
The goal of today’s businesses is to position themselves as first-round draft picks. To be selected will require technology
conditioning and regulation/policy training on the part of the teammate hopefuls. But once the companies are ready for tryouts,
the government has many plays available to go for the goal.
Description
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IT or telecom Vendors seeking to team up with the government
have several options available. Larger companies may seek to fulfill the requirements independently. Smaller businesses may
seek to "team up" or partner with other businesses and bid on an entire contract. Still another option is to subcontract to
a business who was awarded a federal contract. Yet another option is to become certified in one of the SBA classifications
which will entitle disenfranchised companies to be awarded federal contracts over un-certified businesses. Whichever option
a business decides to put into play, the legislation passed in the past decade has paved the way for the new rules. Doing
business with the government is indeed a new game.
The federal government uses primarily three methods to
procure products and services: formal advertising, buying by negotiation, and consolidated purchasing programs. The formal
advertising approach (also called "Sealed Bidding" in the Competition in Contracting Act and Federal Acquisition Regulations)
begins with the procuring agency issuing an "Invitation for Bid". Companies interested in supplying the requested product
or service submit bids. The contract is generally awarded to the lowest bidder as long as that bidder is deemed to be qualified
by the contracting officer acting on behalf of the procuring agency.
Buying by negotiation begins with the procuring agency
issuing a "Request for Proposal" (RFP) or a "Request for Quotation" (RFQ). The contract is awarded to the company submitting
the best bid with the best technical content at the best price.
Consolidated purchasing programs seek to consolidate purchases
on inter-agency products and services. The General Services Administration (GSA), the Defense Logistics Agency (DLA), and
the Department of Veterans Affairs (VA) are the three major agencies procuring consolidated products and services.
The GSA buys, stores, and distributes commonly used items
and services throughout the federal government. GSA may also issue what is called a "Federal Supplier Schedule Contract" which
authorizes the military and civilian agencies to order products and services directly from the supplier.
The DLA, however, orders primarily for the military. They
routinely purchase approximately two million general supply items for the armed forces.
The VA orders mainly medical, surgical, hospital, and
support products and services. Pharmaceutical medication, food, bed linens, and so forth are purchased and distributed to
the appropriate entities.
Businesses seeking to make the government a client or
customer need to make several key decisions. First, decide what strategy will be used to procure government contracts. Will
the business seek to be a sole bidder, a sub-contractor, part of a partnership, or a certified disenfranchised business? Second,
what conditioning does the business need to make that particular business an attractive first-round draft choice? Is certification
required? Is registration in a particular data base required? Third, what training does the business need? Is the business
ready to understand and interpret any and all rules and regulations related to the particular product or service being offered?
Finally, how is the business going to market their particular products or skills?
Small Business Classifications, Certifications, and Representations
The US government is seeking to level the playing field
for all players. Businesses can apply for certifications that enable them to receive preferred status when federal contracts
are handed out. Businesses seeking the specialized classifications must be certified by the SBA and must be registered in
one of the SBA’s data bases, such as Pro-net. Criteria and procedures for obtaining certification and registration are
available on the SBA website as dictated by both the Code of Federal Regulations, 13CFR 121 and the applicable NAICS standards.
The North American Industry Classification Manual contains descriptions of the NAICS as well as references to NAICS’S
predecessor, the SIC standards. Also note that NAICS matching tables are published yearly by SBA in the Federal Register.
The federal government recognizes a variety of small business classifications.
8(a) Firm. An 8(a) firm is a business owned an operated by socially and economically disadvantaged individuals. These
companies are eligible to receive federal contracts under the Small Business Administration 8(a) Business Development Program.
HUBZone Small Business. HUBZone Small Business are companies certified by the SBA as being eligible to receive
contracts because they operate in selected urban and rural communities.
Small Disadvantaged Business. The Small Disadvantaged Business program is aimed at businesses owned at least 51
percent by one or more individuals who are both socially and economically disadvantaged.
Women-Owned Small Business. The Women-Owned Small Business program is aimed at businesses owned at least 51 percent
by women.
Veteran-Owned Small Business. The Veteran-Owned Small Business program is aimed at businesses owned at least 51 percent
by veterans.
Service-Disabled Veteran-Owned Small Business. The Service-Disabled-Veteran-Owned Small Business program is aimed
at businesses owned at least 51 percent by one or more service-disabled veterans.
Legislation
The powers-that-be governing the US have been passing
legislation to bring the rules of doing business in line with the supporting technology. Proactive legislation like the Electronic
Signatures in Global and National Commerce Act encourages the government/private sector teams to reduce paperwork and make
electronic correspondence as legally binding as is its hard-copy ancestor. Reactive legislation like the Information Technology
Management Reform Act and the Government Performance and Results Act are making the chieftains of Uncle Sam’s departments
and agencies accountable for their actions (or lack thereof). Still, additional legislation is being passed, taking aim at
conquering the digital divide by offering tax incentives and tax breaks for those businesses recruiting team members formerly
on the welfare/public assistance rosters. A listing and brief explanation of supporting legislation follows.
Electronic Signatures in Global and National Commerce
Act, S76.
o Signed
into law June 30, 2000.
o Mandates
contracts signed electronically are legally binding.
o Necessitates
the collection and storage of electronic records and data.
o Conduct
business through the online sale and purchase of products and services.
Personal Responsibility and Work Opportunity Reconciliation
Act of 1996.
o Signed
into law August 22, 1996.
o Public
Law 104-193.
o Businesses
receive tax credits for hiring former Welfare and/or Public Assistance recipients who have successfully completed testing,
screening, and training offered appropriate service providers.
o Information
on participating in this program can be obtained by contacting the local State Employment Security Agency.
Information Technology Management Reform Act of 1996
(ITMRA).
o Signed
into law February 10, 1996.
o Imposing
authority, accountability, and responsibility to CIOs (Chief Information Officers) of Federal Agencies on the procurement
and management of IT resources.
Paperwork Reduction Act of 1995.
o Signed
into law May 22, 1995.
o Minimize
paperwork requirements, for suppliers servicing the Federal Government.
o Maximize
the benefits of data and information available to or by the Federal Government.
Federal Acquisition Streamlining Act of 1994.
o Signed
into law October 13, 1994.
o Authorized
federal employees to make business-related purchases of up to $2500 on a credit card.
o Simplifies
procedures for procuring purchases over $100,000.
Government Performance and Results Act (GPRA) of 1993.
o Signed
into law August 3, 1993.
o Requires
the federal government to effectively and efficiently procure and manage goals against results.
State of the Marketplace
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According to the Department of Commerce, the IT industry
has constituted approximately 30 percent of the US economic growth since 1995. E-business or e-commerce have and continue
to have a long-lasting impact on the world economy.
The summer of 2001 saw the first partnership between a
"dot.com" and a government agency. Monster.com, whose parent company is TMP Worldwide, Inc. joined forces with the Department
of Labor. The joint venture also seeks to standardize job listings and categories (read NAICS) between the federal government
and private sector. Talk about mixed marriages! A marriage of services, matching job openings with qualified candidates, will
make this union one of the largest job recruiter/employer entities.
The National Telecommunications and Information Administration
(NTIA) held a meeting with the private sector (read potential business partners) on the state of Third Generation (3G) wireless
systems. To keep the flow of information running, the NTIA has created an open electronic mail discussion forum on the issues
pertaining to 3G wireless.
The FBI (Federal Bureau of Investigation) hosted a conference
on International Computer Crime in New York. Of the over 300 attendees, more than 100 representatives from 30 foreign countries
made the trek to New York for the conference.
Market Leaders
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Small Business Administration
The Small Business Administration has an extensive Web
site aimed at bringing private sector businesses onto the team with federal agencies. The SBA certifies businesses into the
appropriate classification, such as 8(a) Firm Small Businesses and HUBZone Small Businesses.
Companies seeking to register with the federal government
can do so on any number of SBA data bases. The Pro-net data base is the Procurement Marketing and Access Network used by many
federal agencies when selecting a vendor or supplier. The Sub-Net data base is used to connect up businesses needing or wanting
to sub-contract. The Tech-Net data base is used for the technology businesses.
Pacific Northwest National Laboratory
The Pacific Northwest National Laboratory offers a free
e-mail subscription service to registrants providing notification on Federal Research and Development grants for small business.
Commerce Business Daily
Commerce Business Daily (CBD), issued by the United States
Government Printing Office, lists notices of proposed government procurement actions, contract awards, sales of government
property, and other procurement information. Several Internet firms, such as Community of Science, offer electronic versions
of the CBD.
National Association of Women Business Owners
This organization offers mentoring programs, training,
and information on succeeding as a woman-owned business. Several state chapters can also assist in becoming a certified woman-owned
business.
Market Trends
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The market is hot for businesses looking to make the federal
government a business partner. The key is to make the private sector business an attractive team mate to the federal government.
More partnerships between private sector businesses and
the federal government are being formed than every before. IT and telecom companies need to strike while the iron is hot.
The resources to acquire federal contracts are located on the Internet, easily accessible. With some preparation and a little
perseverance, a company could find itself with Uncle Sam as a business partner.
About the Author
Maria D. Montana is a regular contributor to Faulkner
Information Services and a member of the Advisory Panel. She is an independent consultant specializing in Computer Validation
and Quality Assurance. She has more than 24 years of Information Technology experience with a concentration in the Pharmaceutical
Industry. Her areas of expertise include the application of IT solutions in the US Federal Government.
Lexicon
Central Contractor Registration (CCR): Companies doing business with the DoD are required to be CCR registered
to receive payment.
Information Technology (IT): Information Technology is a collective definition for any managing, processing, or
sharing data or information. When using the acronym, the letters "IT" are pronounced separately.
North American Industry Classification System (NAICS): Replaces SIC. Developed jointly by the US, Canada, and Mexico, NAICS as the first-ever North American industry
classification system, aimed at providing the foundation to directly compare industrial production statistics collected and
published by these three North American Free Trade Agreement countries. NAICS will also be more compatible with the International
Standard Industrial Classification System (ISIC, Revision 3) developed and maintained by the United Nations. NAICS
replaces SIC.
Telecommunications (Telecom): Telecommunications is a collective definition for transmitting any type of data.
Third Generation Wireless (3G wireless): 3G wireless uses one or more radio levels to provide access for
a wide range of telecommunication services for both fixed telecommunications networks and mobile users.
US Standard Industrial Classification (SIC) System:
SIC is the old system that was used to define
industry classification. It has been replaced by NAICS.
Web Links
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Central Contractor Registration: http://www.ccr2000.com
Community of Science: http://cbd.cos.com/
Department of Defense Business Opportunities: http://www.dodbusopps.com/
Government E Commerce: http://www.ecommerce.gov/
Internal Revenue Service: http://www.irs.gov/
National Association of Women Business Owners: http://www.nawbo.org/
National Technical Information Service: http://www.ntis.gov/yellowbk/1nty205.htm
New Jersey Small Business Development Center: http://www.yourbizpartner.com/
NJIT Defense Procurement Technical Assistance Center: http://www.njit.edu/DPTAC/
Pacific Northwest National Laboratory: http://www.pnl.gov/edo/
SBA Pro-Net registration: http://www.pro-net.sba.gov/
US Army Corps of Engineers, Philadelphia District: http://www.nap.usace.army.mil/
US General Services Administration: http://www.gsa.gov/
US Small Business Administration: http://www.sba.gov/
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