The government market is very different from the commercial market. From margins to speed to efficiency to the amount of paperwork needed, the differences pile up quickly. One often-overlooked difference is that government market sales are won more by process than by relationships. Contracting Officers (COs) cannot buy based on relationships alone. Relationships matter (see FAR Parts 3 and 9), but relationships are usually not the most important factor. The relationship is 20% of the decision. The other 80% is the competitive process.
Compare this to the commercial market. Here the ratio is reversed. Our relationship with a company is often 80%, or more, of our decision to buy from them. The other factors such as price and past performance do matter, but not nearly as much as our relationship with the seller. How did you selected your doctor, your homebuilder, your banker, your car dealer, your airline, your computer, your grocery store? Was the decision to buy from a particular company driven by relationships with friends, customers, or because you bought from them before? I bet so. By the way, selling through social media is essentially built on this premise. You buy from companies you know…or at least from those your ‘friends’ know.
Understanding this Relationship-to-Process ratio in the government market is key to winning. The relationship you build with an agency, a program manager, or even a contracting officer will only get you so far (about 20%). You win in the other 80% (the competitive process). Even on existing contracts, regardless of how good the incumbent’s relationship is with the customer, the CO must eventually re-compete it.
Next time you are frustrated with us contracting officers for our cumbersome proposal requirements, remember that we focus on the process to create competition. If your proposal or quote is not compliant; if your technical approach does not meet the spec; if you do not show how you will do 50% of the work as a small business (under 52.219-14); if your past performance is not relevant to the requirement, or if your price is not reasonable relative to other offerors…then you will not win the contract. The process (the 80%) will override the relationship that you built (the 20%).
The good news? Both relationships and process matter. Just be sure to get your ratio correct. You will win more often by aligning your time and resource with this 80% process and 20% relationships.
