Selling to the federal government via the U.S. General Services Administration (GSA) sounds great in theory. The government spends billions every year on all kinds of stuff, ranging from toilet paper to tanks. Many purchases are made through GSA contracts. Orders can be huge, and unlike the commercial books business, you don’t usually have to deal with returns. The government has all kinds of programs that give special consideration to small businesses, and even set up an e-commerce website called GSA Advantage. Sounds like a great opportunity, doesn’t it? Especially considering we just launched a new product line, Cheat Sheets for popular software programs such as Google Docs and Google Drive, which could potentially be very useful to office workers, clerks, teachers, and other staff employed by the government.
I was enthusiastic about the GSA selling opportunity for the cheat sheets, until I started to dig into the details of what’s required. Unfortunately, the reality is selling to the government is a complicated, broken mess that puts small businesses at a distinct disadvantage owing to the onerous bureaucratic requirements. As with many things related to the government, the requirements probably started with good intentions, such as increased transparency, better security, and removing opportunities for fraud and waste. But when managers at multiple agencies, government lawyers, preferred private companies, and Congress became involved, it turned into a bureaucratic disaster.
I started the process earlier this year, by registering for SAM (“The System for Award Management is the Official U.S. Government system that consolidated the capabilities of CCR/FedReg, ORCA, and EPLS.”) I then visited or registered for about a dozen other sites which handle different parts of the bidding and ordering systems — Fedbizopps, GSA Vendor Support Center (VSC), the private company which issues a digital certificate, Duns & Bradstreet, the SBA, and more. I also took online training and a test to verify that I understood the general contracting requirements (ask me about SINs, MFC, NAICS classifiers, MAC price lists and EPA clauses!), went through the voluminous GSA clauses that govern certain processes (example: “552.238-71 SUBMISSION AND DISTRIBUTION OF AUTHORIZED FSS SCHEDULE PRICELISTS”), and finally sent in notarized copies of my passport and drivers license and a $119 check to a private contractor named ACES in return for a digital certificate, which verifies to the government I am who I say I am when I make a bid via their online system.
At that point, I was ready to start making offers against solicitations. I spent about an hour installing the digital certificate on two computers, which enabled me to sign into eOffer. Entering my DUNS number showed which schedules my company was qualified for. Opening the most promising solicitation document (TFTP-MC-000874-B, if you’re curious), I was stopped dead in my tracks. By this point, I thought I had jumped through most of the required bureaucratic hoops, but in fact I had only just begun. Here are some excerpts about the additional requirements:
The Offeror must complete and submit the Readiness Assessment for Prospective Offerors. This free, web-based self-assessment is available through the Vendor Education Center (VEC), which can be accessed directly at https://gsafas.secure.force.com/MASTrainingHome or through the Vendor Support Center. …
The Offeror must order and obtain a Past Performance Evaluation from Open Ratings, Inc. (ORI). Offerors are responsible for payment to ORI for the Past Performance Evaluation. …
The Offeror must provide financial statements for the previous two-year period (audited, if available). At a minimum, each financial statement must consist of a balance sheet and income statement. … offerors are NOT to submit tax returns. …
The Offeror must submit a narrative description of its corporate experience. This narrative cannot exceed two pages and must address the following: (A) The number of years of corporate experience in providing the products/services described under this Schedule, regardless of the specific products/services being proposed – a minimum of two (2) years of corporate experience is required (B) Organization’s number of employees, experience in the field, and resources available to enable it to fulfill requirements (C) Brief history of the Offeror’s activities contributing to the development of expertise and capabilities related to this requirement (D) Information that demonstrates the Offeror’s organizational and accounting controls (E) A description of the resources presently in-house or the ability to acquire the type and kinds of personnel/products proposed (F) A description of how the Offeror intends to market the proposed products/services to Federal clients (G) A discussion regarding the intended use of subcontractors. …
Quality Control: The Offeror is to submit a single narrative for this factor, regardless of the number of products/services offered. This narrative cannot exceed two (2) pages and must address the following: (A) A description of internal review procedures that facilitate high-quality standards (B) Identification of individuals responsible for ensuring quality control (C) Whether or not subcontractors are used and, if so, the quality control measures used to ensure acceptable subcontractor performance (D) How potential problem areas and solutions are handled (E) The procedures for ensuring quality performance when meeting urgent requirements (F) How quality control will be managed when completing multiple projects for multiple agencies simultaneously. …
GSA’s pricing goal is to obtain equal to or better than the Offeror’s Most Favored Customer (MFC) pricing under the same or similar terms and conditions. GSA seeks to obtain the Offeror’s best price based on its evaluation of discounts, terms, conditions, and concessions offered to commercial customers. However, offers that propose Most Favored Customer pricing but are not highly competitive will not be determined fair and reasonable and will not be accepted. … The proposed pricing structure must be consistent with the Offeror’s commercial practices. Pricing must be clearly identified as based either on a “Commercial Price List” or a “Commercial Market Price,” as defined in FAR 2.101 (see “Catalog Price” and “Market Prices” under the definition of “Commercial Item”). (A) If the MFC is a Federal agency, but sales exist to commercial customers, identify which, if any, of the commercial customers receive the Offeror’s best price.
There are many more clauses and rules in the document. Put together, they are not insurmountable. Thousands of companies deal with GSA solicitations every day. However, in this particular solicitation, there was one line in particular that made me throw up my hands:
“Due to the large number of new offers currently in process, it may take up to 12 months or longer before an offer is evaluated.”
Because the government agent responsible for viewing my offer may not even get to it for another year, the accompanying documentation such as financial statements, vendor assessments, quality control processes and other information may be out of date. Outdated and inaccurate information can lead to a rejection. It’s a Catch-22 that increases costs, adds risks, and wastes everyone’s time.
Larger firms getting started with government contractors can eat the costs, deal with delays, and assign multiple staff members to plow through the red tape. They can afford to wait a year or two, reapply, or hire a specialist agency to deal with these issues. It’s not so easy for small businesses, especially companies with just one or two people and limited cash flow.
And let’s consider what’s being sold. i30 Media is a publisher. We don’t sell cruise missiles, or $20,000 software packages. The cheat sheets cost under $5. Why should it be so hard for any company to sell low-cost items to government agencies?
Are we giving up? No. But I am going to find other outlets to sell to the government — contractors which already have gone through the painful setup processes and are looking for some high-quality training materials to add to their catalogs.
It’s worth noting that I already sell to commercial customers through Amazon Advantage. The time required to set up the listings for the Google Drive Reference & Cheat Sheet, and start selling? About 3 hours, from registration to getting the listing posted. The cost: Nothing. I didn’t have to take a two-hour training session, get a copy of my passport notarized, install a digital certificate, prepare a corporate history, or explain my QA processes. Selling to companies or individuals vs. selling to the government is like night and day.
I welcome comments from other businesses that want to sell to the government through the GSA, or already have contracts. What are some tricks of the trade for dealing with contracts of this type?