-As shared by Stephanie Alexander
When I talk to someone who says they are starting a government contracting firm, I immediately ask them, why?! For those of us who have been in the industry long enough, you may also have this knee-jerk reaction. Why in Pete’s name would you want to enter this industry and deal with all the things that we do??
Intellectually, I know it’s because it’s one of the biggest industries in the world. It has steady, longer contracts and it helps serve a mission.
While all of that is great you should also know the following:
- Lead time. Our procurements take FOREVER. Like literally forever (or so it seems). They get pushed out, they get extended, they get cancelled for no perceivable reason, they get protested, they get overruled, they get out of favor with the latest political appointee, they get unfunded in the budget. In short, it’s one of the most stable industries in the US yet its subject to all of the above! There is NO quick and easy procurement. Know that you are building business for years out and that it takes longer than you think it should to actually see revenue (and therefore cash!) coming in the door.
- Data. We are one of the most heavily documented industries in the US. We have notices for what’s been awarded and to whom, what’s coming out, what’s funded, who the contracting officers are, etc. Yet with all of this data, it’s still a matter of deciphering what the data means before you can navigate the waters, and this takes time. It takes a couple hard losses to realize that something seemed wired for the incumbent. It takes a few bad teaming agreements before you realize your prime was just taking you off the streets. This industry is super transparent however you have to understand what isn’t written down or included within the RFP as much as what’s in the RFP.
- Margins. They aren’t sexy. And if they are, you are going to raise some eyebrows! While we all understand that inherently, we should use the taxpayer’s money to its best advantage, this is often translated to lower margins for contractors. Some government customers think margins are a dirty word. They most likely haven’t had to have enough money to cover payroll before. But regardless, you are capped in what you will earn on your work.
- Talent. Let’s face it, government contracting just isn’t known as the coolest industry in town. Yes, we are mission driven and sometimes that’s appealing. But often for the younger employees, it’s being able to work on bleeding edge tech and learn and do cool stuff. News alert: we aren’t known for being the risk takers and trying really new stuff. Never mind that we’re subjected to the labor rates provided in a proposal submitted years ago, and we can’t just offer what the tech companies do. This makes recruiting and retention particularly hard.
We love govcon. All day, every day. To the point where we are pretty useless outside the industry. But for those entering, come on in, but have clear eyes and clear expectations as you enter.