The Federal Sales Sherpa, Eileen Kent, discusses how to get – and keep – your GSA schedule contract on this week’s Federal Sales Sherpa Show: LINK
“I can’t tell you how many people are calling me every day – saying they’re about to lose their schedule due to minimal sales,” says Kent.
GSA has team members and centers of people who manage the paperwork process of reading, approving and awarding GSA schedule. There are about 19,000 vendors on schedule – selling between $35B and $40B per year. But the reality is this: only HALF of the schedule holders are winning federal contracts utilizing the GSA schedule and if they don’t sell $25K minimum through it – they will lose it in the first two years. Also, if they don’t maintain at least $25k in federal sales through the GSA schedule every year thereafter, they risk losing the GSA Schedule.
“This is the number one reason businesses are getting booted,” says Kent. “If you’re one of those schedule holders, well everything’s fair in love – and federal contracting. GSA has no patience for $0 sales anymore.”
“Here’s the reality,” says Kent. “It costs between $10k and $25k to obtain a GSA schedule. If you plan to fill out the paperwork and apply for a schedule – feel free to try to do it by yourself – but it’s going to take you at least a year to complete. Ask any small business who has gone through the process all alone.”
“Between the application process, proving your prices, negotiating your rates and agreeing on a fair and reasonable price for your products and services, you need to be willing to show GSA how much more sales you’re going to bring to the schedule – than the current schedule holders. They’re also going to look at your finances, your past performance, your references and your ability to fill out paperwork.” GSA says that it costs them $3,000 per year – per vendor – to manage your schedule with mods, approvals and communications.
“Think about it – if you were GSA, a self-funded agency, living off of the GSA schedule holders’ sales – yes – that’s what I said – they LIVE off contractors’ sales. They collect .75% of every dollar on every schedule – except the medical services and supplies where they collect .50%. They call it the Industrial Funding Fee. So for $39B in sales through GSA schedules, they’re collecting $270,000,000. Now, if you were GSA and you were handling the paperwork for 19,000 or so vendors every year – and only HALF are brining in sales, wouldn’t you start cutting the dead weight?”
Kent says, you must weight the cost of getting a schedule and the time it takes to sell products/services through the schedule and the time to maintain and handle all of the reporting required. “So, BEFORE you get a schedule, you should perform a market analysis to see if agencies – in your back yard – are actually buying your products and services on schedule.”
“Look, federal employees use the ‘Do you have a GSA schedule? No? Then I can’t talk to you’ a punt for you to go away for a year – and then you come back after spending $5,000-$25,000 on a consultant to help you complete the paperwork and finally meet the federal customer a year later, and they tell you, ‘Oh, I buy your services from so-and-so through an IDIQ contract. We compete that every five years…..come back when we post it on FedBizOpps.‘
Kent continues, “A federal end user told me to my face that he uses this tactic to make companies go away. He even said that he uses a monotone voice on the phone – on purpose! Little does he know this response is not only costing people a year- he’s costing people big bucks, because vulnerable companies take a federal employee’s word without doing the market research which is right at their fingertips,” says Kent.
Kent continues, “Companies who come to me to perform a market analysis right after they’ve obtained their schedule or right before they lose their schedule and, for some, we discover customers don’t buy their services on schedule anyway!”
So, step one: do your homework – perform a competitive analysis. If you don’t hire an expert to do it for you – then go to usaspending.gov and see how the feds buy what you sell. “This website is very informative but you need to know how to navigate it and interpret the data – so attend a class or get an expert’s assistance.”
Step two: if you decide to get a GSA schedule, you need to have someone manage it and someone in the field marketing and selling through it. It is not a contract vehicle – where business is driven to you – it is a BRIDGE, sitting there, doing nothing – until you drive traffic across it. If you have a schedule – still perform a competitive analysis, so you can see which agencies buy your products and services and build a federal sales action plan to approach those agencies aggressively.
Step three:Execute – sell, sell, sell, sell. Respond to RFQs on eBUY and track everything – so you can show your GSA Co that you’re doing everything to close deals. If your two years are almost up, they may let you have a six-month extension, but again, you need to really sell, sell, sell and prove yourself.
Listen to this show to get more information, but if you want one-on-one assistance, call Eileen Kent, the Federal Sales Sherpa at 312-636-5381 or visit: http://www.federalsalessherpa.com where all the radio shows are posted.