“Mature business operations should help you manage government contracts…not bankrupt you.”
Government Contract Management
Winning government contracts gives you the opportunity to be wealthy. Effectively government contract management adds value to your customer and profit to your bottom-line!
I won a government contract! Now what?
First…Don’t Panic After Winning a Government Contract
Everything that you need to know about the services and/or products that you’ll be providing your government customer is in your government contract. However, knowing “who’s who” in the government hierarchy and understanding of the “culture” in most government organizations can take you far!
Government VIPs that You Must Know on a Government Contract
The customer-vendor relationship supporting a government contract is different than most markets. It’s not like a diner where the customer orders a cup of coffee and you serve it to them. On a government contract, the “customer” is the one making the coffee and you’re helping them operate the coffee pot. In this example, the patron who is drinking the coffee is the “end-user.” The “contracting officer” would be the town’s Occupational Safety and Health Administration (OSHA) inspector, making sure that the coffee and workplace environment are both aligned with local ordnance.
The Contracting Officer
The contracting officer is the person who may legally commit the Federal Government to a contract. They approve acquisition activities and provide contractual oversite. That simply means they compare your services and deliverables to the contract requirements. They also decide if you get paid. Although they yield immense power, they’re really your biggest ally! Think of the contracting officer as the US Supreme Court, protecting and interpreting the US Constitution. In this example, your contract is the US Constitution and they make sure that you’re only being asked to do what’s in the contract. Frequent communication with your contracting officer will almost certainly keep both you and your customer out of trouble!Someone locked some documents in a file cabinet
The customer is responsible for a specific mission that requires contractor support to accomplish. This is the person, or group, that has the budget, mission and requirements that you’re addressing. Simply stated, this is the person or group that you “work for.” Although the contracting officer ultimately decides if you get paid, you must make your customer very happy! Why? Not only are they the one’s with the money, they will almost certainly be the ones evaluating RFPs and making award decisions for your contract’s re-compete! Even more importantly, you will be asking them for a “reference” in the form of a Past Performance Evaluation for your contract’s re-compete and other similar RFPs that you are pursuing. A strong Past Performance Evaluation is priceless as you grow.
Your customer’s mission nearly always entails supporting a third entity, the end-user. The end-user is typically the benefactor of your service. As such, you will likely interface with this group the most. Unfortunately, this group can get you into hot water unless you’re careful! The end-users are the one executing the mission. Their focused on their tasks and care very little about your contract. In fact, few, if any, end-users will read your contract and may ask for support on activities that are outside of your contract. Following the requests of an end-user will frequently lead to being non-compliant with your contract and in trouble with the contracting officer! Before providing support on these activities, clear it with your contracting officer!
Understanding the differences between various government entities is vitally important to successfully managing your government contracts!
Don’t Confuse Poor Contract Management with Being Agile or Organizationally Matrixed!
As you win government contracts and hire employees, you and your team will be running 100 miles per hour! If you’re like many new government contract awardees, you and your team may likely be running in different directions! It’s normal, but you will definitely need to create some organizational controls to effective government contract management!
To gain control, you must
- Create repeatable business processes
- Create structure and organization
- Create “swim lanes” (roles & responsibilities) for your team.
In order to do this, you must first document every important process on your government contract.
Documenting Your Processes
Documenting your business and contract management processes creates efficiency by avoiding the need to “invent the wheel” over and over again. This also allows your new employees to quickly ramp up so
Defining Government Contract Employee Roles and Responsibilities
The second requirement to create effective swim lanes is fully defining roles and responsibilities for each government contract position. Defining position roles and responsibilities and assigning responsibility for each of your newly documented processes is vitally important. Though each process has one process owner, many positions contribute to the process.
Organizational Swim Lanes
Mature companies manage their large, complex government contracts by creating organizational swim lanes for their contract teams to obtain efficiency and control. These swim lanes allow employees to focus on their specific responsibilities. Although “swim lanes” have been given a bad name, they actually allow employees to focus on their specific responsibilities. Swim lanes only become detrimental when middle management create their personal fiefdoms. At this point, a swim lane becomes a “silo” and loses its efficiencies.
Government Contracting Academy will provide you with a set of processes for nearly every business function to help you manage your government contracts. These processes may be easily edited to support business operations as your company grows!
Don’t Be ‘Too Responsible’ Managing Your Government Contracts
You will never read that statement in an MBA program or in a Fortune 500 company!
In fact, many small business owners appear incredibly knowledgeable, competent and mature by aggressively performing the following “responsible” activities.
- Identifying current and future risks and immediately creating infrastructure to eliminate them
- Hiring corporate overhead employees to manage important government contract activities
- Creating the necessary infrastructure to prepare for the “unexpected”
- Maintaining a lawyer on retainer and buying various forms of business insurance
Although the above describes a perfect leader, and it may be for a Fortune 500 company, this type of leadership will almost certainly destroy your government contract! This way of thinking will drive you into bankruptcy!
Running Out of Money!
Managing a government, as described above, does not actually lead you to your primary objectives of making profit and creating value for your customers. Simply stated, if you hide behind your checkbook and focus on avoiding risks by spending them away rather than standing up to the challenge of managing them, then you will fail.
What’s the Takeaway?
Don’t be “too responsible!”
Yes, you read that correctly. In other words, stand up to the challenge of accepting and managing risks. There is a saying, “the easiest problems in the world are the ones that money can solve.” However, it only applies if you have the money and a solid strategy to obtain a return on the investment for that money!
Investing in government contract management in a prudent manner can be the difference between spiraling into bankruptcy and becoming wealthy.
Government Contracting Academy will help you effectively manage operational risks without always having to use your checkbook!
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“The easiest problems in the world are the ones that money can solve…until you run out of money!”
About Randy Wimmer
Randy’s first Federal Government contracting company was launched from his home after his kids went to bed. He later sold it for 8-figures. With nearly thirty years either in or supporting the Federal Government, Randy is the ultimate “industry insider,” having owned multiple successful contracting companies.