We’ve all had them. The random phone numbers calling your phone leaving a convincing voicemail, the emails or letters stating they would change your lives. Some are clearly identifiable as scams. But what about the “government registration companies” that aren’t so easy to decipher as legitamate?
Before you decide to write them a check or send some money over, we have some advice. We are going to provide you some tips on how to evaluate government registration companies and see if they are legit.
Why would you need to know the difference?
Well, although your DUNS, CageCODE, SAM, DSBS and FBO are all free, there may be times you are in need of assistance. Maybe you’re afraid to make a mistake. Maybe you have more money than time or you just want to let someone else be responsible. These all might be legitimate reasons to find outside help. Either way, you should have minimum standards to evaluate the companies approaching you.
Do NOT Use A Company If Any Of The Following Occurs:
Their website mentions CCR or ORCA
Unless, they’re refencing old legal systems, steer clear of doing business with them.
They are charging you to register for a “Top 100” list or some sort of publication that they claim will be in front of government agencies
They state you or your firm was nominated for an award
If anyone calls you on the phone to solicit you
You receive a random email, text, or any other form of unrequested solicitation that doesn’t come from legitimate companies
They promise they can get you a loan and/or pre-qualify you for small business funding but require upfront payment
Reputable companies do not use auto dialers, call unsolicited wanting money, use tiny font disclaimers or send fax spam!
Be cautious and knowledgeable about the differences and do your homework before hiring a government consultant or working with government registration companies. You work hard for your money and your information is valuable. Don’t just give it away.
While there are opportunities in DBE, MBE, and Federal Contracts, one may have questions as to which route is best to take. By diving into and comparing the three, we will see which one is ultimately the best choice for small businesses.
Program Funding
MBE supports local and municipalities. This means the local city would be the one providing the funds. The bad part is, they occasionally have issues with paying people. We’re not talking about a week or two weeks late, but a month or two months plus! The DBE is not as likely to have these issues but if the market crashes (which it has), this affects how they are able to pay the contractors. Federal contracts on the other hand, are backed by funding. You will not get a contract by the federal government unless the funding is already there.
No pay, maybe pay, guaranteed pay? I don’t think there’s another question to ask.
Winner: Federal Contracts
Prime Mindset
As a small business, you will most likely be working as a sub-contractor with a prime. At the local level with MBE, you are not really protected. Why? They do not blacklist or remove primes who treat others poorly, unfairly or fail to pay others. This is both careless and reckless, as they do not govern how they should operate and treat businesses, especially small businesses. At the DBE level, they are more mindful. Working with larger firms, they are more conscious, but they can still avoid paying you. At the federal level, they do not want to lose money. These are their bread and butter contracts. Therefore, they will not jeopardize this by not having people paid. If the prime doesn’t pay their subcontractor, they will be marked negatively.
Winner: Federal Contracts
Company Size
At the state and local level, goals are about 5 million or less. In the federal arena, at 10k employees or $33.5 million, you’re considered a small business. That’s almost a ten-fold potential for your company to grow into before you reach the mid or large size business brackets!
Winner: Federal Contracts
Teams
Teams are integral in business. Most businesses start off small with 1 or 2 people doing the work. Meaning a few companies will have to work together to accomplish a task. At the local level, they do not support teams. When two companies attempt to work together, they call it “co-collusion.” You will actually have to sign to say you while not be working with others to complete the tasks! The DBE doesn’t support teams either. They aren’t so up front about it, but they expect you and your employees to complete the task. Where with the federal government, working together or with your competition is the norm. The most important part for them is getting the task done, regardless of the number of companies needed to join together to make it happen.
Teamwork makes the dreamwork?
Winner: Federal Contracts
Contract Rules
Both MBE and DBE’s rules vary and differ from county-to-county or state-to-state. On the other hand, the federal government entails the entire US, meaning they use the same set of rules, the FAR or DFARS. No matter where you go, you follow the same rules.
Winner: Federal Contracts
Source Selection
The MBE and DBE go with the low bidder, even if they know the contractor cannot perform because that is their policy. The federal government is a little bit smarter and tends to learn from both theirs and other’s mistakes. Instead, they go with the lowest responsive bidder. Taking this route means they can throw out the bids that are deemed “non-responsive” and go with the next lowest bidder. They will continue this process if necessary until they find the someone that can complete the job. If they can’t, they throw away the entire job and start over. Quality matters.
Winner: Federal Contracts
Growth Potential
Here we will dive into the DBE, MBE, and Federal Contracts growth potential. The MBE and the DBE allows you up to your set goal. For example, if you say 5 million, then you’re capped at 5 million. Whereas with federal government, the sky’s the limit. Therefore, your growth is unlimited.
Winner: Federal Contracts
Business Development
Business development is last on the list. When you want to succeed, you want to learn and you want to grow. Both, MBE and DBE do not provide you these opportunities like the federal government does. They have programs, small classes and workshops, but they are ineffective and are not reaching their targeted goals. Whereas at the federal level, there are formal business development programs to help you improve and grow. There are even agencies designed to help small businesses win contracts, like the 8a program. Overall, the knowledge and assistance you receive is invaluable.
Winner: Federal Contracts
After 8 different topics and analyzing and comparing DBE, MBE, and Federal Contracts, I think you know who the winner is—federal contracts! We can easily say federal contracts blow the others out of the water. They are overall the most effective and trustworthy choice of the three.
This can definitely be a controversial topic. First and foremost, what is the 8 (a) program?
The 8(a) program is where small disadvantaged businesses can receive assistance from the federal government. Each year, the federal government awards a percentage of federal contracting dollars to small disadvantaged businesses. A huge benefit to a small business, but is it a waste of time?
It can be, if, you do not prepare properly. There is a proper time for you to take advantage of the benefits it offers. Before you jump into the 8 (a) program, we encourage you to first build a foundation, create the company, your organization, your structure and get some experience under your belt. You do not want to waste an opportunity like this, if you are selected for the 8a program. Preparation is key!
You need to know your company and be confident in your structure, organization, and delivery. In the program, you are going to be dealing with the small business development specialists who represent dozens of firms. A lot of times, you will be getting new specialists who have limited experience in the program, how it works, and how to best help you. The specialists are not familiar with your business. No one is going to be more familiar with your business than you are.
Remember that the program itself does not create the foundation for companies. You have to! You want to maximize all of your success by doing your proper planning. Then again, it’s only a nine-year program and a once in a lifetime thing. Why squander the opportunity?
OUR FINAL VERDICT?
Yes! The 8(a) program is worth it, if you plan properly.
The 8 (a) program takes you from good to great. This is a great opportunity if you are ready and prepare and you want to be ready so that when you get into the program, you can spread like wildfire! What does this mean? Get to planning and preparing!
To find out more about the 8(a) program and properly preparing for government contracts, watch the video below. To learn more about government contracting, visit our YouTube Channel..
The question of the day is, “Can you and are you ready to dive into government contracts?”
I know you probably want to scream “yes!” But keep reading, because although we will be focusing on those wanting to become the prime contractors, we have a few points to cover first.
The truth is, not every company is ready to go into federal contracting as a prime contractor. A small business who wants to work on government contracts absolutely can and will, if they follow the tips across our blog. However, that doesn’t necessarily mean via the route of a prime contractor. There is also the route of becoming a subcontractor.
In every company, there are key differences between a prime and a sub which are important for you to know. Once you are well-versed on these differences, it will be easier for you to determine which route you are ready for.
While you might not be ready to be a prime, the good news is, there are thousands of companies looking to hire subcontractors who want to buy your products and services.
However, if you are adamant or even thinking about being the prime contractor and having the direct contract with the government, this post is for you. First things first, you must assure you are ready.
DIVING INTO FEDERAL CONTRACTS
There are ways of quantifying and evaluating the potential success of your organization before you dive into federal contracting. Below is a list of key performance indicators, KPI’s, or questions to ask yourself when determining if your company is ready to jump into the federal marketplace.
Do you have any supplier credit?
Do you have any work history?
Does your firm have money, capital or access to money and resources?
Do you have a team that can perform consistently?
Do you have an organization to handle the barrage of paperwork to facilitate a RFP, RFQ, or even take a project from start to finish?
Remember, as a prime contractor, you will not get paid until your product or service is delivered and as subcontractor, you are most likely working on a “pay-when-paid” basis. This is why it is crucial to review these questions to ensure success for your company and everyone else involved.
The following chart helps you see if you are ready to take on and peruse government contracts.
If you score a below a three, you are not viable and success is not likely yet. At this point in time, you are not ready to pursue federal contracts.
However, if you scored a three or above, you are a strong container for success.
If you scored below a three, do not get discouraged. Be patient, wait and build up your organization a little bit more before jumping into getting an 8(a)certification or into federal contracts.
In the meantime, working as a subcontractor IS viable. Every company in America can and should be doing federal contracts whether it’s as a prime or a subcontractor. It is a fantastic way to add additional revenue streams to your business. You can learn more about how to win these contracts here.
Overall, whichever route you decide to take, whether it is becoming a prime or a sub, we wish you all the success!
County and state contracts are not the best way to go. Plain and simple. They may be the “safe route” and hate may be a strong word, but by the end of this you’ll understand why this route is not the most beneficial.
But can’t you make money working these contracts? Yes, you absolutely can make money working county and state contracts. However, there will be a lot more effort and time spent, with a result that is nowhere near the federal level.
County and state contract results are incomparable to the results federal contracts give you. It might be easier or quicker to bid county and state contracts, but after all of the unsuccessful proposals you will need to design, you’re going to burn out. Once you are burned out bidding jobs unsuccessfully, then you’ll start to understand why we don’t suggest going this route.
16 REASONS TO HATE COUNTY AND STATE CONTRACTS
Rare to Begin And Make Millions Of Dollars
Working on smaller projects allows you to become comfortable and stay stagnant for years to come. There will be little progress as the years pass and once you get comfortable, the millions and larger projects will probably never be touched.
No Ability To Scale
You can’t hire an outside man and they can’t hire an outside man. If you go this route, you better be ready to do all of the work. With federal contracts, you can bring in whoever you need to as long as the job gets done and the people you hire can also bring in whoever they need to.
Requires That You Have All The Tools
You won’t be able to leverage other people and other team member’s resources. If you don’t have the money or the tools to do it yourself, you are out of luck. It’s a big never-ending cycle. In the federal arena, you can work as a subcontractor on a half or million-dollar project and the prime will cover the bonding. Meanwhile, you get the experience to increase your bonding level.
Pay Is Slow More Often Times Than Pay Is Fast
The number one complaint from small-business owners? The local and state governments pay is slow. Being paid slow versus being paid fast is the norm. If you are a subcontractor, you are waiting double the time. Whereas, the federal government pays on time.
Allows For Underbidding
Bidding and winning a job that the county and state know you will not be able to afford, is a risk you shouldn’t want to take. Starting out, you don’t have any money to lose, so why would you put yourself at a disadvantage right out the gate? It’s a waste of time for everyone.
They Award Projects Without Securing Funding
This is scary. If you are doing a project, don’t you want to assure you will get paid and that money has been allocated to receive payment? The federal government allocates money so when the job is done, you get paid. State and local governments? They need something done but have no idea how they will pay for it. After you do all of the work, all of a sudden, “they are sorry and trying to get the funding.” I don’t know about you, but we much rather be assured that after all of the work that goes into completing these projects, there is money for everyone to get paid.
No Blackball List; Not Widely Used
Ethics is what is comes down to. You don’t want to work with someone who is unethical. However, the local governments do not blackball contractors who take advantage of disabled and elderly people, walk out on jobs, fail to complete jobs or pay their sub-contractors. This also means that the prime contact can abuse you and never be removed from an approved vendor’s list. Sounds comforting? Didn’t think so.
Designed For Handymen
These contracts are made for people who are going to self-perform the work or bid so cheap as though they are going to self-perform the work. There are also no opportunities for you to scale or grow a team this way. They want you to do all of the work but pay you as if you’re doing them a favor or are hiring and paying others under the table. Not based on your expertise, experience and what it actually requires to complete the job and pay an experienced team.
Do Not Offer Maximum Leverage
Local levels do not support joint ventures. This is such a shame. Because they do not support joint ventures, there is no way or opportunity to actually leverage your abilities and talents to grow a business out.
There Are Prejudices Based On Race, Location and Relationships
Don’t get upset over what you just read. Take a second to understand. There are still minority, section 3, public housing and similar type of programs out there. However, these contracts won’t actually scale your business and lead you to success. On the other hand, they can actually get you in trouble. You cannot get success by demand. Find the best company to work with and for you. You want to be the best company and work with the best companies regardless of what they look like, who they are and where they’re at.
No Training Contract Officers
With the lack of stability in maintaining positions and the constant revolving of moving people to different positions, people who lack the experience are the ones judging the contracts. Whereas in the federal arena, a contracting officer is a contracting officer no matter where they go.
Funding Is Tied To Federal Or State Grants And Subsidy Programs Like CDBG
Did you ever stop to think where the county gets their money from? Yes, some of it comes from tax payers. But the rest of the money comes from the state, which comes from the federal government. If their dollars are coming from the federal agency, why don’t you just work for the federal agency? If it’s good enough for the state and the municipal government to rely upon, don’t you think it’s good enough for you to rely upon?
Constantly Changing People
Relationships are key to maximizing opportunities. If the people in the positions are constantly being changed, how can you have or build these relationships? You should be looking to maximize opportunities and leverage skillsets to grow your business.
Inconsistent Bid Process
With so many different departments within the counties, the bid process is inconsistent. This means you are creating new proposals for each bid. However, with the federal government, you follow one rule book—the FAR or Federal Acquisitions Regulations. They use the Standard Form 1449. Therefore, one bid process is almost identical to the other. Meaning, the first proposal you invested time into, you now only have to change names, prices and details.
Can Cancel A Contract With No Apparent Reason
If you want to be spending time going after opportunities for someone that turns you away and doesn’t give you a chance over something like a protest, then the county is the way to go. But who wants to waste all of that time for nothing? No one.
Big Enough To Screw You, Small Enough To Overextend And Not Pay You
There was a man who had a contract to build the Pinecrest Library. Once built, the real estate market crashed and he was told he would never get paid. Not because they didn’t owe him the money, but because there was no money to pay him. End note, they are big enough to screw you, small enough to overextend and not pay you. Don’t be that guy.
As a beginner, federal contracts might be intimidating but being new and ignorant is your blessing here. It’s actually a strength that you are at a disadvantage, because you don’t know any better.
When you don’t know any better, if you pursue a multi-million-dollar federal contract with limited experience and limited knowledge and you land that job, then everything works out. Whereas, if you start small, these numbers will seem unattainable and you’ll never give yourself the opportunity to reach these limits.
At this point, you probably changed your mind and despise county and state contracts too. We say, go for it. Start with the “scary.” Go for the federal contracts. You’ll be happy you did in the long run.
Check out our video below for more information on this topic. To learn more, visit our YouTube Channel.
As a beginner in federal contracting, one of the first steps you will have to take is creating a capability statement.
What is a capability statement? Essentially, it is a cross between a brochure and a resume.
As with most things, you can either do this on your own or hire someone to do it for you. If you are highly skilled in graphic design and have the time, go ahead and do it yourself. But if you are not or do not have the time, there are other ways to get a fantastic capability statement without spending more than you need to. One way, is with guru.com.
Guru.com is a freelance website. Here, you post your project and they then send it to their network of freelancers. In return, guru.com sends you prices and proposals to accomplish that said task. This process saves you time and allows you to have a rockstar capability statement at a low price.
HOW TO BUILD A PROFESSIONAL CAPABILTY STATEMENT WITH GURU.COM
Sign up, create an account and confirm your e-mail.
On your dashboard select “Post a Job.”
Enter your title: “Capabilities Statement.”
In the details section explain what you would like done.
Google “Capabilities Statements” and download the ones you like.
Attach them to your job posting this way everyone is on the same page of what you are looking for. Then, you can select personalization options like fonts, colors, graphics, etc. to fit your company.
Under “Keywords” type “Graphic Design.”
Select “Worldwide” under “Location” for this specific task.
Under Pricing select “Fixed Price” and go with your higher option.
$200-$350 is a good range to have a wider range of people.
Select “Maximum” under “Exposure.”
Select Your Deadline – 30 days from now is good.
In addition, you do NOT need to select, nor pay to feature your post for this task. After you are done with these 10 steps, you are on your way to having a professional and personalized capability statement.
Time to get to posting!
To see these steps in action and learn more, visit our YouTube Channel and watch the video below.
We’ve all had them. The random phone numbers calling your phone leaving a convincing voicemail, the emails or letters stating they would change your lives. Some are clearly identifiable as scams. But what about the “government registration companies” that aren’t so easy to decipher as legitamate?
