My answer to How competitive are mid-sized government bids for IT projects?
Answer by Ken Larson:
The government is starting to move away from a policy of “Lowest Price, Technically Acceptable (LPTA) awards. That niche gave some mid-sized companies a leg up.
My government contracting clients who have grown from small business to mid size find the competition keen but winnable through:
- A solid past performance history a section of the award criteria is almost always specified for past performance ratings on previous similar government work.
- Competitive pricing. Assuming your competition pays a generally similar labor rate to their employees as you do and that fringe costs about the same for everyone, then overhead and G&A are what wins and loses contracts.
Please read the following articles carefully with regard to long range planning and setting your overhead and G&A rates:
Keep in mind that if you are performing work inside a government facility the government will expect to be charged a lower overhead rate than if you were paying the space and occupancy costs and the light bill. This is normally achieved by establishing a separate cost center for "On site" (Internal to government quarters) work with lower overhead expenses applied to project direct labor dollars in that cost center.
- Teaming – Synergism is paramount in teaming with any size company, whether in a lead or subcontracting role. There should be technical, management and market segment similarities between you and any company with whom you are considering teaming. Your prospective team member ideally will not be a direct competitor; rather a business in a related field with whom you share a mutual need for each other's contributions in pursuing large-scale projects.
I have seen corruption in midsize companies engaged in government contracting, but is usually as part of a much larger scenario on huge programs where the mid sized company becomes heavily influenced by other firms. My successful midsize companies maintain educational and effective ethics programs.
Please consider downloading the free book on small business federal government contracting at the BOX in the right margin of the sites linked above.