The Echo Chamber - Procurement Readiness vs. Business Readiness

Procurement Ready vs. Business Ready

Article first published for the Spring 2023 APTAC Conference on 4/2/23.

Additional discussion on the 2023 DoD Report on Small Business Strategy is available via a Game Changers Podcast released on 3/20/23.

Article edited and updated since initial publication.

Procurement Readiness - Only Half The Answer

We support a market that is complex and difficult to navigate. As small business experts, our success comes from our experience, the relationships we build, our passion, and a professional journey that requires life-long-learning. I’ve been working side-by-side with APEX Accelerators for 15 years. Over the past decade, I’m come to recognize one important truth. 

Facilitating an end-state of “Procurement Readiness” does not [solely] provide the skill set necessary for entrepreneurs and small businesses to be successful in the government market. It’s only half the business equation. After training and coaching more than 20,000 small and large business professionals, I’ve learned that success in the government market is based on “Business Readiness.” Procurement versus business-readiness is not an issue of semantics. I’m not sure who coined ‘procurement-ready’ but it is now used widely across the federal government and Department of Defense. 

Successfully selling to the government requires that small businesses bridge their understanding of the government market with general business acumen and a common set of tactics and strategies. A company that doesn’t understand business will not win contracts and if they do, their performance evaluations will ensure they don’t win again. 

More than half of small businesses fail to successfully enter the market. Half of all GSA MAS holders fail to win a contract. Half of 8a, WOSB, and SDVOSB…fail to succeed. For some, it’s because they don’t have the necessary cash flow or commercial revenue stream to sustain operations. Others, they fail to recognize, are led to believe, or they believe via omission about how long it takes for the average company to win their first major contract. By only focusing on procurement-readiness, we’re lifting them up while they’re still strapped to the ground. 

The concept of “communities of interest” or “clusters” provides for referrals between different organizations. You need executive leadership training? That’s Score. You’re a Veteran and need a business plan? That’s the VBOC. You want to sell to the government? That’s APEX. One of the challenges with the cluster concept is that clients get lost in the process and there is no single individual helping them bridge the pieces of government and business. 

Our clients are told to research historical contract data; that they need to call small business offices and request capability presentations, or that they need a capability statement. This only prepares a small business for half of the business equation required to successfully enter the market.

We can agree that a large number of small businesses that ask for help are simply not ready, from a business perspective, to engage the government market. They have an awesome desire to succeed but don’t understand how to get there. Only 1% of small businesses, regardless of market, are still in business after five years. It’s not because of the product or service they sell. It’s the result of failing to understand that success comes from a tight integration between market education and business know-how. To be clear, we can’t simply lay the problems of successfully selling to the government on industry or government. Likewise, neither industry nor government can bridge procurement-readiness and business-readiness in a vacuum, and this is how the market works today.

When you talk to senior leadership at the agencies or commands, they often say that success comes from a strong “partnership between government and industry.” Yet, Improper bundling of contracts, post pandemic supply chain, complex regulations, strategic sourcing, and category management have decimated the small business industrial base. 

I should clarify, these challenges exist whether or not a company is procurement or business-ready. Somewhere between 40% and 50% of small businesses that supported DoD the last decade have left the DoD market. Contracting officer billets are staffed at 50% to 60% of required levels. The government market is so vast that I don’t think enough people understand how devastating these issues are or how long it’ll take to resolve. It should also be noted that contract bundling, complex regulations, and category management - issues that have negatively impacted the small business community, are all long-standing issues controlled by acquisition offices, not small business programs. So, when I read the 2023 DoD Report on Small Business Strategy, I asked myself, “Is this an echo-chamber? How will the small business programs make the necessary changes to protect and grow the industrial base if most of the challenges are a result of decisions and regulations controlled by the Acquisition professionals? 

Small businesses succeed or fail based on both internal and external reasons. My point is that the small business community needs to be both procurement ready and business ready. Having a capability statement is useless if you’re unable to communicate the value that your company provides. When asked ‘what do you do?” the answer is not listing your service or product mix. When a small business is told to reach out to an agency’s OSBP or OSDBU, what do they say? What questions should they ask? What research should be done in USASpending.gov or SAM’s Data Bank before the call? What business activities should they perform after the meeting? How do they get that capability briefing with a program manager? How do they ghost and influence an acquisition so they’re more competitive? 

It’s not enough to simply make a company procurement-ready. Focusing on procurement readiness without the necessary business acumen, tactics, and strategies set’s expectations that are often unattainable…for at least half the small business base. 

So where do we go? What can each of us do? As business professionals, the difference between a job and an occupation is life-long-learning. The changes that must take place will not happen overnight. It’s critical that we teach small businesses how to be procurement ready while simultaneously evaluating their business acumen and tailoring our guidance for each company. We may not be able to directly impact contract bundling, category management, or regulatory issues, but we can definitely learn and become stronger business professionals. Whether you’re an APEX counselor, the director of an agency small business office, or a member of industry, it’s critical that we understand the balance between procurement and business readiness. Not only understand the balance, but work on bringing them together.

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Award-winning business coach, professional speaker, and bestselling author with 35 years in the government market, Mr. Frank is a leading authority on bridging government acquisition strategy with corporate business strategy. Author of the bestselling books "An Insider’s Guide to Winning Government Contracts," and "The Government Sales Manual," his tactics and strategies have helped companies win more than $14.6 billion in government contracts. His training sessions, highly educational and thought-provoking, are consistently rated the top sessions at national conferences and events. As a result of these strategies, Mr. Frank was inducted into the Government Sales Hall of Fame with the Lifetime Achievement Award and honored with SBA’s award for Veteran Business of the Year; Industry Small Business Advocate of the Year by the Society of American Military Engineers (SAME); Top Business Advisor of the Year by Small Business Monthly; and most recently Vendor Partner of the Year by the National 8a Association and HUBZone Contractors National Council. Former Military Intelligence Officer. Serves on multiple Boards and is Chairman Emeritus for the Veterans Advocacy Foundation. Two graduate degrees including an MBA. An avid outdoor enthusiast, Girl Scout and Boy Scout leader. 

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