The U.S. Department of Defense (DoD) budget swelled from $670 billion to $712 billion in 2020. Roughly half of that amount will be shelled out by Pentagon to private contractors. Keep in mind, however, that just 40% of that half are awarded under terms of “full and open competition.” What this means is that many companies enjoy exclusive “no-bid” relationships with the DoD.
However, the money available to companies looking to land a military contract still represents an enormous amount of money. That means opportunities to get a piece of the defense pie is pretty good. Note that the DoD’s Office for Small Business Programs said pursuing a DoD contract requires, “patience, persistence and an in-depth understanding of federal acquisitions rules.”
To take just one example, the Department of Defense requires IUID labels for most equipment and machinery used by military personnel. IUID stands for Item Unique Identification. It’s a method of giving all equipment a permanent ID. It is required for all equipment with a price tag of more than $5,000. Thus, those seeking defense contracts must be aware they will be required to IUID on everything they sell to the Pentagon if it exceeds the $5,000 standard.
The DoD Office for Small Business Programs also cautions that it takes an average of 18 months before a company lands its first defense contract. That means a consistent, persistent and steady approach is required to achieve success.
Experts suggest a first good step in seeking a DoD contract is to know the lay of the land. The best way to do this is to get background information on existing defense contractors with something called SAM. That stands for System for Award Management. It’s found at SAM.gov. It’s basically a primary supplier database for the federal government. Many of the companies listed in SAM subcontract out to others for procurement and other services. It’s a good way to find a potential client to sell a product to.
The next stop after SAM should be FBO.gov. At this location, those looking for defense contracts will find solicitations that have been advertised by the DoD. The FBO.gov site will provide a wealth of information on numerous contracts and subcontracts. It’s a good idea to sign up for a free account on FBO.gov. That will grant the seeker access to deeper levels of information. For example, you can find the names and addresses of losing bidders. Knowing how much they bid and how they failed will inform your effort to put together a better offer.
If FBO.gov is not revealing enough information on potential contracts, another excellent resource is USAspending.gov. On this site, you can conduct a simple keyword search to look for the kind of contracts your company fulfills. If this site is not as complete and detailed as FBO.gov., it provides excellent details on the exact nature of what is required for a bid. It will also show the agency and any sub-agency that will award the contract.
Finally, a tantalizing bit of information that’s good to follow is what the DoD is rewarding every day. You can sign up directly with the DoD to receive an email that tells about awards that are valued of $7 million or more daily. This will include some details on just what the contract involves, the ID number of the contract and the name of the person who is overseeing the project.
