How to Work with Federal
Tune into this webinar for background on working the federal government, how to know if you are ready, and tips on how to get started.
Jillian:
Dcode is a mission-driven organization focused on better connecting the commercial technology industry with the federal government to improve outcomes for both sides. We sit at the nexus of three communities. You can see the three different circles on the Venn diagram here on the slide, of the emergent technology industry, traditional systems integrators, and services firms, as well as our friends in the federal government itself. So we embarked on our mission about seven years ago with our technology-facing offering First, which is our technology accelerator program. We scout and vet technologies that match well to government use cases, and then run them through our Federal Acceleration Program, teaching them everything they need to know about how to do business with the government.
As we began working with these tech companies, we quickly realized the importance of engaging traditional players in the industrial base as an easier button to get these tech companies in the door and into mission more quickly, so we quickly expanded our programming and community to include traditional systems integrators and consulting firms as well.
And then finally, over time, government leaders started coming to us saying, “Hey, we also need help engaging with these tech companies, and need help being more innovative and more forward-leaning.” So thus, our government team was born, and that’s where I sit within the organization. And we work with government leaders every day helping provide education and support with problem refinement, problem definition, tech scouting, matchmaking, and a bunch of different acceleration and advisory services, all to help government leaders get out of their own way and to be more innovative. And a lot of this interaction takes place with these three communities in one central location, which is our Dcode Nexus platform. And that’s one unified community for all of our folks in our ecosystem to come together. So that’s a little bit about Dcode, alternate it over to Victor next to introduce himself and then the Hutch side of the program.
Victor:
Thank you, Jillian. Hi, my name is Victor and I’m having some internet difficulty, so let me know if you can’t hear me and if I need to change networks. I’m the CXO, CTO and service design lead for the small business innovation research, SBIR, and small business technology transfer research STTR programs at NASA. I’m also a Hutch board member. Now Hutch is a really cool intensive 24-month incubator program that helps B2G entrepreneurs scale successfully their digital services firms. It was established by Fearless, which is another digital service firm based in Baltimore. And we nurture, empower, and connect underrepresented entrepreneurs who are working towards the public good, specifically underrepresented in terms of gender and ethnicity. We also operate at the nexus of three different communities, specifically helping civic tech companies who deliver digital services to improve outcomes for the government that helps improve impact for the community. And that community could be government employees or the public. Jillian?
Jillian:
Awesome. Thanks, Victor. So with that, here’s an overview of the agenda for the session this afternoon. Today we’re taking our collective experience and introducing you all to a taste of what we have to offer. We’re going to do government 101 to provide you an introduction into working with the federal government by hitting on these three main topics that you can see here on the slide.
The first is the advantages and some challenges of working in the federal market. Second are the basics of how government is structured, and then third, we’ll talk a little bit about how to identify and articulate your relevant use cases for federal because it’ll be a little bit different than how you communicate those to a commercial audience.
So with that, let’s get right into it. Starting off first with the case for federal. So once you think that federal may be a good space for you, we definitely want you to be able to make the commitment with your eyes wide open, because there are definitely pros and cons to working with the federal government and you should be able to understand and articulate both. In this first section, we’ll help you lay out the case for federal and figure out why it’s worth it for you and your business.
We’ll start off first by covering the benefits and some advantages of working with the federal government and then highlight some complexities and challenges. And finally wrap up by covering a sample timeline and some other considerations to keep in mind for your business specifically as you look to enter and scale in federal market. So now let’s start with the good. There are lots of benefits to working with the government and the market can present tremendous opportunities for you and your company to grow and expand. And I’ll turn it over to Victor quickly to walk us through some of our more specific pros to doing business with the federal government.
Victor:
Thanks, Jillian. Yeah, the US government is the largest IT buyer in the world. You can see it’s roughly about $9 billion a year. So that means that there’s probably opportunity somewhere for you if you know where to look. Specifically, not only do they buy a lot, they buy consistently so that even when we’re going through a recession, you can see that the amounts that the government spends doesn’t vary that much. In fact, I think it’s related a little bit to the fact that the government can create debt, whereas a lot of the state governments by law are required to have a balanced budget, although they have ways to go around it. So even in recessions, we’re still buying goods and services and we’ll buy more of them. Jillian?
Jillian:
Awesome. Thanks, Victor. A third pro that we like to say of doing business in the federal market is momentum. Because while it may take a while to enter the market, once you’ve gotten on contract and have established yourself as a vendor, renewals are often much easier and more consistent than the commercial sector, and that’s because it’s pretty difficult for the government to rip and replace your solution.
So once you have an established customer base, there are many opportunities for you to grow and expand your footprint from there. With that being said, there are movements within government to try and work against something that’s called vendor lock, which can work both in and against your favor. So just something helpful to consider because these measures of pre preventing against vendor lock are attempting to unseat some of the traditional prime contractors who have been locked into certain contracts for a very long time.
So think the Booz Allens and the Deloittes and the larger consulting firms of the world. But at the same time, there are certain quality controls and measures that you’ll need to comply with. Things like CPARS and CWASPS, which you’ll learn throughout the session today. There are a lot of acronyms within the government, which we’re happy to define and talk more about if any are unfamiliar to you. But the BLUF is once you’re in and perform well and meet some of these predefined expectations and quality standards, renewals should be much easier and quicker than many of your commercial customers, which is a great thing about doing business with the government.
Then finally, supporting the government can really provide you a strong story to tell about your impact as well. First, on the security side of things, it can definitely be a strong validator of your seriousness and shows that you can work effectively in a highly regulated industry and that your solution, especially when you think about things like cybersecurity, if you can meet the requirements of the government, odds are you can meet the requirements of any other highly regulated industry out there.
Then in terms of social impact too, you can share your other market segments that you’re mission-oriented. Something that’s really important when you talk to a potential government customer is about the mission impact as opposed to something like the ROI or return on investment or financial incentives for the customer. Government’s really mission-oriented and mission focused. So in terms for you of developing a brand that speaks to solving public problems, there’s no better way to do that than working with the federal market.
Now we’ve talked a little bit about the pros and benefits. We’re going to shift gears and talk a little bit about some of the challenges of working with the government because, unfortunately, it’s not all sunshine and roses all the time. First is the uncertain sales cycle. One of the hardest parts about working with the government is how unpredictable it can be due to bureaucratic, political and budget factors that can kill a promising deal or even delay it by months or years. We see that at Dcode all the time with our own government contracts as well as some of the contracts of the tech companies that we work with.
So what does that mean for you? Ultimately, you’ll have to be ready to weather some uncertainty, especially in your first couple of years doing business with the government. And you’ll have to keep in mind that it can sometimes be hard to measure success of your first few hires working in the federal market since they likely won’t close major deals consistently in the early years of working with the government.
Second is complex compliance requirements. I kind of touched upon that in my previous slide, but there are complex requirements when it comes to things like cybersecurity and some other compliance things associated with selling to the government. So passing hurdles such as security authorizations and navigating unique rules around ethics can make the market a little bit more expensive and complex least at the onset. Similarly, when you sell to the government, there’s something called the federal acquisition regulation or the FAR, and that can be a bit complex if you don’t take the time as yourself or your team to understand it.
Third, there is, as I kind of alluded to, sometimes a high startup cost doing business with the government because it simply costs more to invest in getting into the market, and you’ll want to have a solid understanding of what those costs are and how you can make the right appropriate investments from a time and people and resources perspective in order to work with federal effectively so that you maintain the commitment long enough to actually reap the end results in some of the pros that we just discussed previously.
And then finally, a barrier to consider can also be the investment of time and resources and learning things like the different agencies and how government buys in different budgetary factors and things like that. So next, I’m going to turn it back over to Victor and he’ll walk us through a mini case study for you all of an actual digital services company, like many of you all in the audience here today and how they approached the federal market for the first time.
Victor:
Yeah, thanks Jillian. So imagine a company, and this is an actual digital service company that entered the federal market about 13 years ago. So you can see on the slide there that they started out pretty small with the founding team and then they kind of bootstrapped.
So over the first few years, they grew eventually the seven figures at that time and in annual revenue, and they hired team members across both delivery and back office roles. The key for them though was actually focusing early on just the core capabilities and the target audience. They could worry about growth later, but just focusing in on what they do best. This then gave them the ability to really get to know the customer base and their needs and all of the contractors and partners in the domain. And it took some time, but with discipline, the business scaled and a lot of the scaling happened after participating in a mentor-protege program.
And when the CEO came off a billable contract work to contract to focus on the business, which at Hutch we refer to this as working on the business, not in the business. So when you’re going to consider federal, we have this self-assessment checklist that you want to walk through to make sure you’re thinking about the right things. First and foremost, you must have commercial use cases that match the federal market needs or else it’ll be difficult to get any traction. That also requires having a really deep understanding of your competitors because that’s going to be a really good signal of what the market is like.
Once you have that, you can use that to differentiate yourself and to say what makes you different and hopefully better than your competitors in a specific way or in a specific niche, right? So along with that, you need to have the resources to spend a good 12 to 18 months getting set up in the federal marketplace. Your leadership and sales team needs to understand that and be aligned on the unpredictable nature of those first few years working with the government. Once everyone’s aligned, you need to have the know-how and the time to handle all of the complex requirements for compliance. Then lastly, you just need to understand any nuance of your specific product or service that may make selling in the federal space a little bit more complicated. Jillian?
Jillian:
Awesome. Thanks, Victor. So that first section told us a little bit about the case for federal and why you should consider in the first place. In this next section, we’ll tackle who’s who in the zoo when approaching the federal market because it’s truly no secret that the government is massive and expansive and can basically be its own industry and itself and infinitely more complex. So this module is meant to provide you a high-level overview of the three largest communities that we separate the government into, and that’s the Department of Defense, the intelligence community, and then the civilian agencies.
So Victor and I will provide our takes on each of these pieces of the government from work structure to budget to personalities to who you should consider to who you shouldn’t even bother wasting time with. And that’ll allow you to be most strategic with your approach and resources when approaching the market, especially for the first time.
So I’m going to start off first with the Department of Defense, or the DOD. So each component of the DOD alone will probably have a bigger budget than any single civilian agency. However, just because the DOD has a lot of money, that doesn’t always mean the program office that you want to work with will. So it’ll be important for you to do a little bit of research and a little bit of networking to figure out where the budget lies once you kind of plot out your path of what parts of the DOD are of most interest to you. Similarly, the DOD can be forward-leaning with using flexible acquisition methods, but they also tend to be a little bit risk averse, so it’ll be up to you to really communicate your use cases in a way that alleviates any of their concerns.
Third, defense agencies often like working through large established vendors such as some of those prime contractors we talked about before the Deloittes or the Booz Allens or some of the larger, more established consulting firms. So in tackling DOD, we recommend checking out. We’ve added a few agencies or components here on the slide. Air Force is a great one. They’re one of the best places to get your foot in the door. That’s how Dcode got our foot in the door with the DOD. And the Air Force especially has an open topic through the SIPR program, the small business innovation research program that they lead, which is a great opportunity for you to enter and scale as well. DIU is also a great entry point if you fit into some of their open solicitations. That’s the Defense Innovation Unit. And then DARPA is a great place for R&D.
Again, lots of acronyms here, so happy to spell those out or talk a little bit more about them if you guys have any questions. Then it’s also important to keep in mind for DOD specifically that the DOD can use some of these flexible acquisition methods that go around the FAR or non FAR-based, which can help you get in the door a little bit more quickly. Some of those are commercial solutions openings or CSOs, other transaction authorities or OTAs, and then the SIPR programs as well, which Victor knows about those programs a lot in his role at NASA. So happy to dive into those a little bit more if there’s any questions about those programs specifically.
That’s a little bit about DOD. Next, I’ll tackle IC really quickly. The intelligence community, or IC, also has a large budget like the DOD, but it’s spread across a lot of its component agencies, and money seems to follow the most critical issues that are flaring up around the world.
So if you’re watching the news, anything that’s in the news and could be of interest to people in the intelligence community likely is where the budget is trending or where the budget is following they have a little bit more flexibility there. So right now, the budget around addressing things like terrorism threats is much lower than the money dedicated to efforts focused on Russia and China, for example. At the end of the day, you’ll want to link your technology or your services that you’re providing to that top national security concern to really touch on the mission and strike a chord with folks within the IC.
The IC also often uses a nonprofit called In-Q-Tel, which is kind of like the venture capital arm of the intelligence community, and that’s oftentimes how they source a lot of emerging technology for acquisition. There’s also a persistent culture within the IC that classified problems are completely unique and entirely different from anything that’s unclassified, but this is not always true. So it’ll be really important for you to keep in mind as you’re framing your solution to frame it in a way that resonates both with the IC’s mission, but also shows your potential customer that they’re not unique and you’ve helped solve similar problems and similar challenges before.
One last thing I want to call out here, the office of the Director of National Intelligence or ODNI, they’re kind of the overarching body that handles a lot of policy for the IC, but they actually don’t have any budget. So don’t waste your time when you’re going after the IC with ODNI. You’ll want to focus your efforts on some of the sub-agencies instead. And be sure to remember it’s the IC, not IC community because if you say IC community, it’s redundant and people will know that you don’t know what you’re talking about, and that’s a terrible way to get your efforts squashed really early on. Next, Victor is going to tackle these billing agencies for us.
Victor:
Yeah, thanks. Jillian talked about the DOD being risk averse. I do want to make sure that you realize contracting in general, procurement in general and specifically the contract officer role is risk averse in general across the government. So there is variation in the risk aversion, but in general I would say it’s pretty risk averse, specifically just by nature of their roles. Unsurprisingly, DOD and all of the national security agencies spend the most, they have the biggest budgets. On the civilian side though it’s going to range from really large ones like the VAs, the number two size agency after DOD to smaller agencies.
Now remember a lot of the civilian agencies, what we call agencies, you might call sub-agencies, et cetera, because they’re nested inside of larger departments. So think of TSA, Customs and Border Patrol, Coast Guard, US Citizen Immigration Services, ICE, they’re all under DHS, and they all have different cultures and different spending trends. Same thing can be set for Department of Commerce or HHS. So make sure you’re actually focusing specifically on this culture and spending trends of the sub-agency within a department or within a larger bureau.
Some of those bureaus or administrations are pretty independent and might report directly to the White House or the government. Some might report up into a department. So it just depends and you want to make sure you understand the culture and how things work there.
Now, not everyone on the civilian side understands all of the flexibility that we have with acquisition methods. In fact, some of us have worked on creating something called the Tech FAR, which shows some of the flexible ways that are still legal according to the FAR to procure digital service and products. And because a lot of people, especially contracting offices and contracting specialists in the government there are actually internal consulting firms on the acquisition side like GSA assisted acquisitions, right? Or, DHS Procurement Innovation Lab.
They’re there to help manage the contracting process or help consult on it. So that’s sometimes why you might see that a particular contract with a specific agency be managed not by that agency but by GSA. It’s because of some of these internal consulting groups that help with the acquisition process.
So make sure you check out groups like Customs and Border Patrol, USCIS. They seem to be pretty forward-leaning a lot of DevOps culture and focus on the software VA, SSA, Social Security Agency, IRS. They should spend more on innovative tech than they do, but VA is actually a really pretty good buyer. There are fewer requirements for compliance compared to DOD. So it should be at least somewhat easier for non-US based companies to get in the door with civilian agencies. Hopefully that was helpful. Jillian, back to you.
Jillian:
Awesome, thanks Victor. I know we’re throwing a lot at you guys. We’ll save plenty of time for questions at the end, so feel free to drop them in the chat or in the Q&A function and we’ll be sure to address them as we get to the latter half of the presentation here, which we are going to wrap up quickly with our third and final section of the day. And that is going to be one of the most important parts of your federal sales strategy and that is your federal use case or use cases.
Of all the things we at Dcode teach in our programs, identifying and narrowing your use case for government is one of the most valuable we’ve found, and especially for services-based companies like many of you all on the line today. The market can be competitive. So clearly understanding and being able to effectively articulate your differentiators will be super key as you approach the government and as you approach this market.
We have a process for identifying and articulating your use cases in a way that resonates with federal, and we want to teach you some of that today. Starting off with a piece of advice that we typically recommend that you identify three to five federal use cases, no more, no less to be the backbone of your federal strategy.
Let’s describe quickly why it’s so important to articulate your use cases effectively for the government and some of the benefits that effectively communicating them can provide to you. First, your use case gives you a starting point by determining if there are existing or emerging opportunities for your tech in the government. You’re already well on your way, especially if you’re early in your federal journey. Working through what your use case actually looks like for an end user can be an invaluable activity.
Second, it’ll help focus your time and resources, especially as small, I imagine many of you bootstrap companies, by narrowing and targeting your relevant targets and markets within the government and focusing your efforts. You can prevent any time from being wasted, especially as Victor and I already mentioned, it can be a long process and a long haul to begin with. So being really strategic of where you plant your time and resources can help you approach the market more effectively.
Third, your use cases will help you accelerate your market research, and market research will allow you to identify your competitors and potential differentiators as well as help you uncover any potential partners in the market as well. Oftentimes, we’ve found for new companies entering the market, it can be easier to partner with a bigger player or someone who’s already there to help accelerate your way in the door. And so market research can one, help you understand how you stack up against your competitors, but also give you the ability to identify any potential teaming partners or folks that you can work together to provide even more holistic and like well-rounded services to the federal government.
Fourth, by clearly articulating your use case, it’ll help you sell your vision to government buyers. We touched upon this before, how important the idea of mission and vision is to government end users. Even when you’re pitching internally and in conversations with your C-suite or your investors about why the federal market is worth it, your use case and the impact that it can provide to citizens or to government, missions needs to be clearly defined to communicate the value on either side.
Then finally, your use case allows you to adopt a user-centered mindset. This is especially important in government because a lot of these agencies and a lot of these government employees are part of user centered and user focused organizations, and the Hutch team knows a lot about this, probably knows better than anyone the importance of having a user-centered mindset when it comes to selling to the government because they’re training their tech companies and government leaders on this all the time. We do the same thing here at Dcode of how do you kind of shift that mindset to communicate your use case in a way where it’s not just about driving dollar savings or efficiency, it’s actually about impacting lives and impacting citizens on the other end.
Next, Victor’s going to round us up by talking about how your use cases in federal strategy will apply to agencies a little bit more specifically.
Victor:
Yeah, just number one, focus, focus, focus on the things that drive agency problems. Make it about them. It’s not about you. So first of all, mission. By the way, we in government love vendors, love contractors, love companies who are mission-oriented or mission focused. So that just kind of makes us feel a little bit better. That’s not just about being out to get our money. But we have a mission ourselves. So with all of the modernization and tightening budgets, how will your solution be more efficient, more effective? How is it going to help solve an unsolved mission problem that I have or that we have?
Number two, outcomes. At the end of the day, agencies are trying to improve the life for the end users they serve. That could be the public citizens, refugees, immigrants or government employees. Number three, agencies and program offices, for better or worse, have to focus on the topics that come down from the top with the pointed officials and elected officials. So keep an eye on the news. The focus for any particular day or year or month can actually shape how you communicate or what you actually offer.
So a good example might be what the transition from the Trump administration to the Biden administration, the Biden administration created a new executive order on equity. So now a lot of us are trying to figure out, “Oh my gosh, how do we assess equity, do equity assessments and improve the equity of the services that we offer to the public or even to the government employees internally?” And how do we find contractors, people we work with who have products that aren’t going to exacerbate equity but can actually help us improve equity? So people that come with that perspective, it just makes it easier and better for us because that’s a focus that we’re trying to do across everything that we’re doing and offering for the public.
Number four, oversight. You can have oversight within your organization like with an IG from Congress or even from an independent agency, the GAO. With all of the calls and the needs for modernizing various processes and moves to new systems, there is a lot of oversight. So you want to follow those reports to get an idea of what specifically needs to change and where you fit in that change process.
Lastly, we have this Washington Post test. We don’t want to do anything that will cause us to land on the front page of the Washington Post. So if you have a use case or you’re offering us something that is seen as too risky, it will likely get passed over. I do think there might be a place for moving into higher and higher forms of risk later on, but when you’re trying to get your foot in the door, go for things that are less risk risky and have a higher chance of being taken up.
So where do you start? Just think about what is your biggest commercial win? What are you really good at? Then think about is there a dual use case? Is there a way that this could apply, this commercial priority or perspective or focus could apply to a problem that the government is having? Specifically think about things like banking, industries like aviation, health, any kind of area like transportation that is heavily regulated because it could be quite similar to the heavy regulation that we experience in government. In fact, we’re the ones that are often regulating those industries.
So number two, take a moment, sit back, think, reflect about whether or not the government is ready for what you have to offer. Are there demand signals coming from the news, from the press, from various government stakeholders and conversations? Is there budget allocated for the thing that you offer? Do you see people who are awarding contracts of a similar size and scope for the types of things that you offer?
So do your market research, identify future budgets, appropriations that might relate to what you have to offer, and specifically follow bad press and bad news because they might flag important fixes that are needed that might be related to what you have to offer. And lastly, Dcode, Hutch, we are here, there may be other organizations as well that can actually help you refine those use cases, do market research and so much more. So thanks for your time. I’ll pass it back to Jillian.
Jillian:
Awesome. So that pretty much wraps our content that we had for you all today. Now that you know the main pros and cons of working with the government, how the federal market is structured and what mission focused federal use cases can look like, hopefully you’re well on your way to determining whether federal is a better fit or a right fit for your company.
And again, this just kind of scratches the surface of what working in the federal market can look like and there’s so much more to learn, which is why both Dcode and Hutch work with companies like you guys every day and all the time in much more detail as well to help them navigate the complexities along the way. So in the meantime, know we threw a lot at you today. Happy to pause for any questions. And you saw Stephanie put a camera on here and she’s going to help moderate this Q&A portion of the workshop.
Stephanie:
Excellent. Thank you so much Jillian and Victor, great presentation. I know that a lot of folks are dropping their questions into the Q&A function. So if you haven’t already gotten your question in there, make sure to do that. And we’ll just start off at the top. So Isaac had asked a question earlier around experience with mentor protégé programs because it seems like it hasn’t really been heavily used or used as much as maybe it should or could be. So Jillian Victor, do you have some experiences with MPP programs that you can share with us?
Victor:
Oh yeah, they exist and they are not used as much as they could be. I think there might be an awareness program. I don’t have specific statistics, but yes, people should know more about them. I’ll give you an example. We have one actually built into government. There’s actually an SBA mentor protégé program where you can partner as a newer small business with someone who’s gone through the ropes and began to get experience that way. A lot of people don’t know about it. So yes, we are trying to do what we can do outreach and letting people know about what we offer Dcode, Hutch, but we even have some in government and we need to get the word out.
Stephanie:
Yeah, absolutely. And for anybody who is considering the SBA All Small Mentor Protégé Program or the DOD Mentor Pro Mentor Protégé Program, we always encourage people to be really specific about the mentor that they are choosing because you are limited. You don’t have an endless supply of mentors that you can use for those. So you want to be very specific about it and you really want to be specific about the outcomes and what are the things that you’re looking to actually gain from the program. So great question, Isaac. Patty asked a question as well. So she’s curious, would a company have a better chance of getting awarded government contracts if they are a B-Corp or a benefit corporation, and why or why not?
Jillian:
Sure, I’m happy to take a first pass at this, Victor. I’m sure you’ll have some great thoughts there as well. There are certain set aside that the government has that can make awarded in contracts a little bit easier. I’m not sure that a B corp in specific, the type of corporation is one of those set asides, but it could be that because you’re a B-Corp, maybe you also qualify for some of the other ones. Some of the ones I’m familiar with are if you’re a women owned small business, veteran-owned small business, if you operate in a hub zone or a more economically disadvantaged area, those are all types of small businesses that the government has a certain pot of money that they have to set aside to those companies every year. So maybe you’re a B-Corp and one or more of those things. That would definitely make it easier for you to get in the door, but I don’t believe just the B-Corp in itself is an easy button. Victor, correct me if I’m wrong.
Victor:
Yeah, I would say the same thing. I mean, the government tries to be fair, and I know in saying that, people are like, “Well, wait a minute, the government has a history of not being fair across a lot of things.” So I understand that. But in some things like with how we hire, how do contracts, I think we’re a little bit ahead of some of the other sectors in terms of trying to do things in an equitable manner.
So what I would say is that the only thing that we are allowed to use in judging whether or not you win a competitive contract, or even a single source contract, is what is written in that solicitation. We can’t just come in and say, “Oh, you’re a B-Corp, I’m going to give you extra points and then choose you.” It has to be written in there. And I haven’t seen any that say specifically, “Oh, extra points for being a B-Corp.” So I would say read the solicitation or what’s put out and use that in determining if it’s a good fit or not.
Stephanie:
Excellent. Thank you, victor and Julian. Adam has a question as well around he’s curious to know if there is a typical contract structure within the federal government for software acquisition. So for example, dollars per month, user annual contract, purchasing it outright. Have you seen what a typical contract structure would look like?
Jillian:
Okay, perfect. I like to call myself the resident finance nerd at Dcode, and I love all things pricing. So this is probably my favorite question ever. In short, like many things in government, there’s no typical structure and it can depend. There are some ways, like pricing strategy, we could probably do a whole deep dive on that topic, but there are some ways to help get you in the door a little bit more quickly based upon different thresholds that are out there. For example, there’s a government purchase card threshold, which is $25,000, which if you’re pricing your product under that, someone can just swipe their card for it.
There’s a simplified acquisition threshold, which can help you get in the door without as much open competition as a traditional request for proposal or RFP. So to answer your question, no, there’s no typical contract structure. They can be a bit more ad hoc, they can be annually renewed. It’s oftentimes up to you and your customer to negotiate that, but there are some levers you can pull in leeway to help get you there a little bit more quickly. Anything you’d add, Victor?
Victor:
Yeah, same thing. I don’t know the stats, so it’s hard for me to tell you that. It looks like your question is related to digital products versus services. So I can tell you that I use software at NASA that is an annual contract. I have software at NASA that is per month per user. I’ve done it all and I’ve even done some creative ones where I was trying to purchase a learning management system and I was in a situation where people might sign up for something but then actually not take the course. So I was trying to get, not money per user per month, but money per completion of a course per month or things like that. And most of the people I talk with, they’re flexible in times terms of trying to negotiate how the payment works. So I’ve seen all of them purchase outright. I’ve seen all of them.
Jillian:
One last thing I would add too for that question is if you want a better sense of what current software companies or products are doing, there are some publicly available websites like GSA Advantage and NASA SEWP, which is spelled S-E-W-P You can do, that’s like an online catalog where you can browse how other people are pricing their products in a public forum. So that can help too if you especially have a sense of who your competitors are to see how they’re pricing things as well.
Stephanie:
Great point. So we talked a lot about focusing on your customer, really understanding and leaning in and understanding what their pain points are, their challenges, what are the trends, all of that. So do you have any advice for how to go about selecting and identifying your federal targets? So Adam specifically is looking for targets around medical training software, but I would venture to say even just more broadly than that for the folks on this session. How can they go about taking some actionable items in identifying what the federal market might look like for their product or solution?
Victor:
Yeah, so I mean immediately, this might be obvious to you, Adam, so I may not be saying anything. I just thought immediately the VA, cause the VA has three different, they call them administrations, but it’s divided into three big groups. And one of them is the Veteran Health Administration, VHA. So maybe them, but the first one that came to mind was HHS. Both for some of their research stuff, but also even within CMS, the Centers for Medicare Medicaid Services, might be possible places that you can go. In general, a lot of the agencies specifically have their own pages where they put solicitations of what we’re working on. I had a lot of people reach out during when Covid hit wanting to know, “Hey, I have this thing.” Someone contacted me like, “I can check if you have Covid by your breath. “
It’s like a breathalyzer. I was like, okay. They’re like, “Well, who did I talk to?” So I’d show them where they can go. HHS has a portal. Department of Education has a portal, et cetera. And then there are places in government where you can go where see everybody’s solicitations across the government as well. So I think going to those places that kind of give you good idea of what they’re focusing on, what they’re looking for, what are current hot areas and issues versus kind of long-term continuous ones. Anything you want to add, Jillian and Stephanie?
Jillian:
Yeah, I would say just in general, go back to the news and see what people are talking about that can kind of help guide you of where money or interest is going from some of the different agencies. Similarly, there are some market research tools that you could maybe get a free trial of or pay for that will help you search by key term and it’ll match you to key term to the agency and what types of contracts they have. That obviously is if you have the infrastructure to invest in something like that.
For medical training, specifically in medical software specifically, I’d also add to Victor’s point within the DOD, the special forces in places like SOCOM especially basically that’s training soldiers or warfighters to be in the field. That also could be a good place to look. But yeah, it’s almost like a plethora of information out there and it can be hard to start, but if you just kind of target your efforts based upon those three to five backbone use cases that we talked about earlier in the session, that can help target you a little bit so it doesn’t feel like you’re boiling the ocean as much when you try to attack the entire government at once.
Stephanie:
Yeah, great point. That’s also related to a question a little further down in the Q&A as well because do you feel like the strategy is different for classified environments within the intelligence community or do you feel like the same strategy applies?
Jillian:
Yeah, I can take this one first. I spent a little bit of time in the IC before coming to Dcode, and we typically recommend don’t start with the IC very first. They’re a little bit trickier and oftentimes want a buyer that has proven you out before to prove your legitimacy. So it’s hard to just go to CIA a first and be like, “Buy us. We’re really novel.” I don’t think your messaging or marketing needs to change necessarily. It’s more just proving out your legitimacy and why you’re safe for someone like an FBI agent or a CIA agent to want to take the leap in invest in technology like the one that you have.
Victor:
Yeah, I would add, I don’t know if I should name companies. Well, I won’t name the company. But there was one company that I saw that had a really innovative process where they had team members work on a project and they built everything. This was digital services. They have a product, let me start there. The product is without, I don’t want to name the product, helps you build software. It’s a product that helps you build software and do some other stuff. And they got the product through FedRAMP. So it’s got a FedRAMP authorization, which means it makes it much easier for CIOs at different agencies to go through the ATO, the Authority to Operate Processes. The process that says it’s basically a security process. It says this is okay, we believe this is secure, you can use it.
So they have a federal authorization and they build everything on the low side, on the non-classified side. And then they push it to the classified side and they push it to the government classified people to then handle it from there. They do all the testing and building, and they can go from start of a project with nothing built to a product that’s in the classified system on the high side, and I think they’ve got it down to three months.
So they’ve built a really unique relationship where they’re able to do that because that’s often the tough thing. First, the ATO, plus getting into classified and they’ve been able to minimize that by minimizing that time and having separate teams and being able to build everything on the low side and letting them take it to the high side.
Stephanie:
Awesome, thanks Victor. Curious, Joey has a question here. What would be the best strategy or agency to approach if your company is one that supports equity, workplace culture and professional development?
Victor:
You mean that your company supports all that while building a digital product, or offering digital service, or they are a work workforce development, DEIA company? I didn’t understand the question exactly.
Stephanie:
That they are a workforce development company that supports equity, providing workforce training, professional development to the customer.
Victor:
Yeah, so if that’s your product, that’s what you offer, you actually could work across many, many more organization organizations as opposed to having a specific. Because we’re all, a lot of government agencies are working that. So the best strategy, so you get registered with the government. You can do the thing where you look across all of the contracts that people are putting out that they want to hire.
But I think one of the best strategies that I would say is to get on a schedule. So GSA has these things called schedules, and I believe they have some that are kind of training related to this kind of people development. A schedule, if you don’t know, is… I’m trying to think of what you might call it, and Jillian you could help me.
It’s maybe a catalog of people that government people can come to open this catalog and say, “Okay, I want to work with this person who’s on this schedule, this catalog, because they’ve been through this process and GSA approved them and got them on here.” And a lot of government people will actually just go straight to those schedules when they’re trying to purchase services or purchase products. So I would say get onto a professional development, workplace culture, people development schedule, and that will increase your chances, because sometimes you get contacted without having done any marketing yourself.
Jillian:
Yeah, that’s perfect. Victor. And a lot of agencies, Victor kind of alluded to this at the beginning, is every government agency needs to have an equity plan and needs to be thinking about these types of things. So it may just be a matter of finding the appropriate point of contact or office within the agencies, but you’re probably a little unique and that’s something like equity is so broad reaching and can touch upon almost all government agencies to the professional development piece. I would almost think of that as a separate swim lane. We do a lot of professional development and training here at Dcode for our government customers, and that is kind of its own unique swim lane of training dollars are its own type of money that the government has to spend.
So if you can frame what you’re doing into training on equity and workplace culture, that can almost open up the door even further to some additional lines of funding that you wouldn’t have access to otherwise, especially this time of year as the federal fiscal year and September 30th. So a lot of government agencies have to use up these training funds before the end of the fiscal year, and that’s a bucket of money that oftentimes has fallout funds or money left over. So you’re actually positioned pretty well to work broadly across a lot of different agencies and capture some different types of funds that maybe just a traditional software or traditional product firm may not have access to.
Victor:
That’s a great point because my team just spent money last week. I was at an offsite endeavor in Denver and we were doing team building in diversity, equity, inclusion, and accessibility stuff. I would say across the government, most people don’t use their professional development money and that there are two buckets. I have money for myself, allocated for myself, a certain amount that I can use for training. But then I also have money that I could use for team wide training. So the nice thing about the lane that you’re in is that people can just use purchase cards to purchase professional development for this person, that person, or just random people across the government.
Or you could actually do team-based things where depending, again on price, we could still use a purchase card, but that comes out of my team development budget versus the budget allocated for each person. I often go up above my budget because other people aren’t using theirs and it’s one pool of money, so then I get to use more. So it’s underused and a big area to tap into.
Stephanie:
Thanks, Victor. Thanks, Jillian. Another question for all the cybersecurity folks that are on the call. So can you share any good resources that you know of where they can research what exactly those cybersecurity requirements for the various different agencies would be?
Jillian:
Cyber’s definitely tough in one of those ever-evolving and ever-complex landscapes. CSIA, the Cybersecurity and Infrastructure Agency manages a lot of the news and the requirements on cyber. So I’d keep up to date with what they’re saying. And in general, just like a good Google search, I think would tell you a lot of what the latest is when it comes to things like cyber. I personally am not a cyber expert, but I would be happy to go back to my team and learn a little bit more for you. But that’s at least where I personally would start.
Victor:
And if you have specific questions, you could always go to… Usually the CIOs and the CISOs, Chief Information Security Officers have public facing webpages if you want to look for some specific things for a department or agency.
Stephanie:
Awesome. Thanks. We have a few more minutes left in this session, so if anybody still has lingering questions that they wanted to make sure get answered, make sure to drop that in the Q&A function. So Adam has a question around networking and matchmaking events. So if you’re looking for subcontractors, any suggestions on what platforms or spaces you can go to try to network and grow that?
Jillian:
Adam, I think this is my favorite question of the day. I think you also asked the pricing question, so I think we get along very well. So Dcode realized that pain point and heard that pain point a lot from folks in our network. So we created a platform that does exactly that, and that’s called Nexus. So we have a Nexus community and platform that has all of the tech companies that have run through our programming before, our government network as well as industry partners and service providers like consulting firms, lawyers, different mentors and folks in the government ecosystem. So we do a lot of networking and matchmaking on that platform. We do events specific to people in the community, and we’ve had a lot of folks team together within the community. So definitely I would do a shameless plug to check out our Nexus platform for that one.
Victor:
I don’t know of a similar matchmaking platform inside government. Sorry. Maybe there is one, but I don’t know.
Stephanie:
Awesome. Thank you. Another Q&A here around details on CSOs, OTAs, BAAs. It’s an alphabet soup here.
Jillian:
Yeah, this one’s tough because we could probably do three full days on just all of these things in how to leverage them. We do a course that’s three days teaching both government leaders and tech companies how to leverage things like this. In short, they’re all flexible acquisition methods that can help you get your foot in the door a little bit more quickly. Not all agencies have access to them, but many of the DOD agencies do. So it’s just a matter of doing the research to figure out which agencies are most interest to you, and then do they have these types of authorities. Then oftentimes the process requires a little bit less competition, a little bit more speed in order to get you onto contract, but there’s definitely a lot more to that that we could tackle in a much longer session than the hour that we have today.
Victor:
Yeah, I don’t have much to offer than that. Just remember that basically there are three kinds of types of ways you get paid grants, cooperative agreements and contracts. And some of these allow you to use non-traditional methods for non-traditional vendors, contractors, companies, for often for a lot of research and development, high important areas in order to get things done faster.
Stephanie:
Excellent. Thank you both. This question is not in the Q&A, but it’s one that we hear oftentimes from folks who are looking to branch out into government contracting. Any thoughts or strategies around having a government contracting arm of the business versus the commercial private sector services that folks might offer?
Jillian:
Yeah, I’m happy to take this one first. We often recommend that you don’t hire your first federal, federal sales rep until you’ve already started to prove a little bit of traction or interest from the government market, just because as we talked about earlier, it can be so difficult and can take a long time to get up to speed. So we recommend leveraging your existing team as much as you can for as long as you can before you bite the bullet and make that higher.
We also like to make the joke that you won’t really see any federal results until you’ve already probably hired and fired your first federal sales rep, because it can take a little bit of time to show that return, especially internally if you’re a venture-backed company or a company that needs to prove things to your C-suite or your investors. So given all the different pros and cons we talked about today, as long as you’re approaching it eyes wide open and don’t rush into making any hires before you’re ready, that’s probably the best strategy or best guidance that I can provide you with.
Victor:
Yeah, I think I would agree. I mean, I do know there are companies that focus on the federal government or whatever level of government. So that’s completely fine. But if you’re doing both and you’re trying to decide which to go with first, I would just… Another way to look at it is from a risk perspective, the government, even if it’s not in the actual announcements, solicitation, et cetera, a lot of times there’s an implicit bias where we’re trying to see, well, is this something that people use already? Has it been tested? Is it out there? Even in those cases, we still might find an issue that we don’t feel it’s safe. But we often don’t want to be the first person trying something. Let me put it like that. It’s nice to know that it has been out there and been tested. So from a risk perspective, it helps that you’ve already got traction elsewhere.
Stephanie:
Excellent. Thank you both, Jillian and Victor, awesome session.