Podcast Transcript: World's biggest customer is open for business

Host: Michael Mancini

Is the world's biggest customer for you?

Want to sell your products and services to the world's biggest customer? The U.S. federal government spends billions every year on things like pens, office chairs, military equipment and everything in between.

Opportunities for Canadian firms of all sizes can be big and lucrative. But the world's biggest customer is also one tough customer. Today's guest tells us how Canadian companies can win long-term profitable U.S government contracts.

But she says that doing business with Uncle Sam is not for everyone.

I'm Michael Mancini, Editor-in-Chief of CanadExport, the magazine of the Canadian Trade Commissioner Service for entrepreneurs who want to trade, invest and prosper in the global marketplace. Look for our magazine at canadexport.gc.ca.

I'd like to welcome Judy Bradt to the show. Judy is Principal and CEO of Summit Insight and has guided over 5,000 clients to over $200 million in U.S. government contracts. She is an author, speaker and consultant and was a trade commissioner at the Canadian Embassy in Washington for 15 years.

Thanks for taking the time to speak with me today Judy.

Judy Bradt: It's great to be here Michael. I'm looking forward to your questions.

Michael Mancini: OK, so getting contracts with the U.S government, or any government for that matter, is not easy. Now you say that partnering makes it easier. Why?

Judy Bradt: The numbers themselves say a lot Michael. The US Federal government is going to spend about $450 billion this year. Of that money 95% of the transactions are worth less than $2,500 a piece. That means on the flip side that well over 80% of those $450 billion is first going to be touched by a very small number of very large companies doing big contracts.

So if you want your efforts to pay off, odds are good that when you're getting started you're probably going to be teaming with somebody who is already in the marketplace. For practical purposes that can also shorten your time to market if you know the right ways to prepare for teaming.

Michael Mancini: Judy, what is a typical investment in both time and money that Canadian firms should expect to make?

Judy Bradt: Whether you're teaming or going it alone, the kinds of things you need to do for researching opportunities, preparing your marketing material, your marketing resources such as obtaining in advance, it's going to be a very similar level of expense no matter what. For one to two years it's not unusual to expect to spend between $100,000 and $250,000 just to be present in the marketplace and get ready to play. I interviewed one company recently who spent $175,000 and took eight people's efforts just to write the proposal. And the end of that she said, she had a contract and a house with no furniture in it. That was how she financed it.

Michael Mancini: Well that sounds rather bleak. How feasible would doing business with the U.S. government be for Canadian SMEs then?

Judy Bradt: Selling to the US government is probably not something that a company that's just starting out, or just starting out exporting for the first time is probably going to want to do right from the get go. A company that is going to successfully pursue government contracts in the United States should first be a healthy, growing, well financed company, period.

Second, it helps if the company is already doing business with a government in Canada, whether that's federal or provincial, has some sense of selling to government means that you're going to be jumping through some extra hoops.

Third, if you're selling to government in the United States it helps if you've already got in most cases some US commercial clients that can give your government buyers some confidence that you know what you're doing in the United States, and in some cases they want to see US commercial invoices as part of your proposal package.

So all of those three things are solid prerequisites that give a company a sense of whether or not they're ready. So it's experience rather than necessarily level of revenue or number of employees that provide some more solid guide to whether or not somebody is ready to tackle this market.

I find time again that the thing that companies really still need to pay more attention to is researching partners in advance, understanding how opportunities are developed in the marketplace and coming prepared with opportunities in hand in the sense of how they fit the clientele before they meet with a partner.

Typically still after all of these years that's the thing that companies need to pay the most attention to. A typical Canadian exporter that I've talked to seems to be more focussed on their own capabilities then they are on having a strong understanding of the opportunities they want to move into and the world that the prime contractor is operating in.

Michael Mancini: So how do you prepare for partnering…what are your partnering secrets?

Judy Bradt: Find out what does the prime contractor do, how are they organized, what problems do they solve, what clients do they serve, which of their divisions do you fit into?

Figure out which of their current or potential clients need or want what you have to offer, your product, your service, your technology. If you're getting started and you're not sure how the US government is organized or what departments and agencies do, then you want to log on to The U.S. Government's Official Web Portal (USA.gov) and take a look at the listings of departments and agencies, drill down, find out what they do. That will give you some idea of how what you offer helps that agency deliver their programs and missions.

Michael Mancini: Judy, let me just quickly say that all the websites you mention today are available on our website at www.canadexport.gc.ca. Click on the article about doing business with the US federal government. Look for the picture of Uncle Sam. Please continue Judy.

Judy Bradt: Next, large team and partners want you to identify upcoming, new business or business that will be re-competed where you can provide and advantage to them as well as new benefits to the government end customer.

Finally prepare your qualification sheet. You want to pull together your information about your relevant track record, the experience that you have in solving the kinds of problems that you want to work on with that prime and put it together in a compact way to highlight your best results, your key agency or government or commercial clients that you're working with right now. All those five things really are underpinning successful teaming.

Michael Mancini: Now what exactly do you mean by "qualification sheet"?

Judy Bradt: Well a qualification sheet would be one page, two sides that has contact information about the experience, what your company does, the experience that you have in performing projects like the kind of work that you're seeking with that particular prime contractor, what the project is worth, the benefits that somebody experienced because they did business with you. That's what I mean by a qualification sheet. It's like a performance resume that's specifically tailored to the kind of work that you're pursuing.

Michael Mancini: So where are the opportunities then? Clearly the U.S government is a massive organization. How can you find out which gov't agencies have money to spend...and money to spend on what you have to offer?

Judy Bradt: In the United States, the federal government requires buyers to post every single request for proposal that's worth, expected to be worth more than $25,000 on a website called fedbizopps. That's f-e-d-b-i-z-o-p-p-s.gov, Federal Business Opportunities (FedBizOpps). There's much more information available there about not only requests for proposal and contract awards, but also information that in fact is far more useful when you're starting out, because the last thing you want to visit fedbizopps for is to find a competition that's open right now, closing within a couple of weeks that you could put together a proposal and think you're going to get it. Because that's not probably the most effective use of your time. There are three other things that are really good to use fedbizopps for when you're getting a sense of what the opportunities are.

First is you can set up a profile and get notices sent to you defined by product or service or agency, you set up a very specific profile what kind of notices you want to get sent that will give you a sense of what requests for proposal are being published right now, who is buying the kind of thing that you sell. And you can set up that speed, that kind of notices not because you're going to bid on this stuff, because you want that, because you want to get a sense of who these buyers are, how often they're buying, because if they're buying some they're probably going to buy some more later.

The second thing you want to use fedbizopps for when you're looking for opportunities is notices for things like sources sought, or pre RFP conferences or issues of or notices to issue a draft request for proposal. Or a request for information, an RFI. Sources sought, draft RFP's, RFI's are great opportunities for you as a vendor to influence the specification, to respond and tell the government what your capabilities are, to give them ideas that are going to affect how they define the requirements. That's a really valuable way to use fedbizopps.

And finally another great thing to use that system for there is for notices of industry days, open houses and briefings that are held at dozens of government agencies right across the United States all year long. So all those, right, based on that one website, fedbizopps can give you a sense of unfolding opportunities.

Michael Mancini: What are some of the barriers to federal market entry that I should be prepared for?

Judy Bradt: You know I was thinking about that Michael and you know one of the top barriers has got to be assuming that it's not possible. The US government is looking for the best value and the best solutions from its vendors. And if a Canadian company is prepared to do what it takes to go and win that business, the US government is interested. So the top barrier is actually right between your ears a lot of the time.

Secondly, failure to allocate adequate resources, make a good go, no go decision based on a realistic assessment of the time and money that it takes to win business. Failure to plan and instead short changing your company with the resources that it needs to win the business. That's actually the second common mistake that companies make, thinking it's going to be easy, that a big fat government contract would be good for your company without accounting for the amount of investment of time and money it's going to take to pursue the business, to win the business and to stay in business until you perform.

Companies do need to know about how structural or regulatory provisions apply to their companies. So buy American act, actually doesn't usually mean you can't sell, it just usually means that there are certain conditions where you have to get exceptions and there are certain conditions where you just face a six or a twelve percent price barrier.

So the buy American act in and of itself doesn't cause nearly as many problems as small business set aside, or export controls for example. All three of these kinds of common things and more are covered in, on the sell to US gov website that is produced by the Department of Foreign Affairs on Sell2USGov. You'll find information about business essentials, market barriers, the Buy American Act, finding opportunities.

It is a great resource, it's free, your tax dollars paid for it. Start there to get a sense of how those typical barriers are things that you can cope with in your strategy. Or you may decide that they are simply something you don't want to deal with and maybe a reason why you walk away from the opportunity. But at least you're walking away for a specific reason cause you researched it rather than simply assuming that it's not possible.

Michael Mancini: On a final note Judy, how will the U.S. economic slowdown affect how the U.S. federal government purchases and how might Canadian companies have to adapt their strategies in such changing economic times?

Judy Bradt: Historically even in tough economic times government keeps spending. Government has to keep serving people and delivering public services. That means government is going to keep needing a wide range of goods and services for those missions. Whether you offer product or services, the only thing that's really likely to stop you is deciding that you don't really want to make the effort.

The best thing about the economic slowdown is it's probably going to cause a shake-out of people who are less serious about the market, leaving more room and better possible returns in the market for people who are serious about investing the time and money it takes to win that business. So actually that's hidden good news.

Michael Mancini: Well this has been really helpful Judy. Thanks for speaking with me today.

Judy Bradt: Thank you Michael. It's been a pleasure, I look forward to hearing more from CanadExport readers and writers.

Michael Mancini: I have been speaking with Judy Bradt, Principal and CEO of Summit Insight.

Well, that's all for this podcast edition of CanadExport.

You can get more information about doing business with the U.S. government by subscribing to CanadExport. Be sure to look out for the edition in which Judy Bradt will start a four-part series of article on how to get U.S. government business. The CanadExport website also has all the great websites Judy mentioned today.

Now if you found this show interesting and you're currently preparing to do business abroad, or if you are already, be sure to give the Canadian Trade Commissioner Service a call.

It is Canada's most comprehensive network of international trade professionals. We can offer expert advice, problem-solving skills and a global network of contacts, and that includes getting connected to U.S. government business.

So check us out online at tradecommissioner.gc.ca to learn more about the benefits of the Canadian Trade Commissioner Service. While you're there, don't forget to subscribe to CanadExport, our free twice-monthly magazine.

You can also download our other podcasts at iTunes with the searchword CanadExport. We'd really like to hear what you think of our podcasts, so write a review on iTunes or drop us a line at canad.export@international.gc.ca. Your feedback is appreciated.

I'm Michael Mancini, signing off for now.

To download our other episodes, just go to www.canadexport.gc.ca or go to iTunes and use the searchword “CanadExport.”