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Government Lemonade

Government contracts may satiate your thirst for work when traditional business heads south.

By Elaine Pofeldt

"The government is steady business, and it is not going out of business," said Jennifer Collins, CMP, president and owner of the Event Planning Group in Washington, D.C.

Her firm generates about 25 percent of its sales from government work and the rest from corporate and nonprofit clients and she is currently working on a five-year contract with a public relations firm that produces about 15 trade shows annually and a dozen committee meetings for a diabetes education program run by the U.S. National Institutes of Health (NIH).

"They have hired us to manage all of the logistical pieces," she said.

Subcontracting has given her the chance to learn the nuances of working with government, without investing the time in contract administration, which is all being managed by the primary contractor.

That doesn’t mean her team can operate unaware of government requirements, though.

"There’s a considerable amount of time and work in making sure federal regulations are being adhered to," she said.

Once you grasp the requirements, finding subcontracting opportunities with firms that do business with the government can be a good way to dip a toe in the ocean without the pressures of having to swim through a contract yourself.

Armed with the knowledge she has gathered from subcontracting, Collins recently won a contract to organize a small meeting for the U.S. Department of Veterans Affairs.

"I have learned so much with subcontracting that has put us in a better position to go after work with the government," she said. "The government is going to ask you if you have any experience working with the government. If you don’t, they find it hard to award you any particular projects."

At the same time, Collins hasn’t slowed her subcontracting, which remains a profitable part of her business. She won the NIH job from a firm where she once worked, but to find other subcontracting projects—as well as those where she can act as main, or prime, contractor and partner with a subcontractor—she peruses FedBizOpps.gov, a Web site listing federal business opportunities. She looks for any projects in which she could team up with a PR firm to go after a job that requires some services her company doesn’t offer in house.

"If you’re not willing to team with potential competitors, you probably want to get out of the business of government contracting," she said. "You have to get over yourself. At the end of the day, it’s all about trying to win the bid."

Some of Collins’ efforts, such as her recent application for certification as a woman- and minority-owned business, are taking several months, but she views them as an investment for future growth.

Meeting firms can also make profits by subcontracting in niche government markets says Ann Gynn, chief operating officer of Academic Ventures, an events and tour services firm in Rocky River, Ohio, that generates up to 50 percent of its sales planning government-funded meetings, conferences and events for universities. A recent example was a May conference at Case Western Reserve University in Cleveland on the ethics of genetic research. By sharing its knowledge of how government agencies like to work with universities on events, Academic Ventures is in a position to compete successfully for many jobs.

"We’ve found it’s better to advise clients on the government issues, whether they’re paying us for this or not," Gynn said.

Otherwise, snafus can easily take place. For instance, some universities negotiate a discounted price for a block of rooms at a conference, unaware that rooms booked at lower government rates won’t count toward that block, she says. Her team likes to get involved at the front end to help find better arrangements.

"We always encourage our clients to involve us as early as possible," Gynn said. "If you negotiate a contract, we’re happy to look at it."

Another lower-stakes way for meetings professionals to try government contracting is by going after small jobs that don’t have the same strict bidding requirements as the deals that giant contractors pursue. Many of these "microcontracts" are for less than US$5,000, but in some cases, they can be many times that size.
Pegine Echevarria, founder of Team Pegine Inc., a 12-year-old meeting planning firm in Ponte Vedra Beach, Fla., says the best way to get into government contracting is through smaller contracts.

These small jobs aren’t just available to meeting planners—governments often hire audiographers, videographers, photographers, suppliers and other firms that help events, Echevarria notes.

But finding out about smaller jobs requires some detective work, she says. Because many gigs aren’t advertised on FedBizOpps.gov, introducing yourself to government buyers at their agencies’ procurement conferences, which are held to introduce buying officers to potential vendors, is a must for firms that want to win sales.

"Every community has procurement conferences," she said. "You will not walk in and walk away with business, but you will meet people within organizations who can lead you to the people who do that business. Everything in the government is a matter of referral and being known."

Offering your help with meetings to branches of your local and state government, as well as local outposts of the federal government, such as the U.S. Army Corps of Engineers and the U.S. National Guard, can also pay off, Echevarria says. Many government agencies don’t have a professional in-house planner, so they are often thrilled to outsource the work.

"What usually happens is someone says, 'Let’s have a meeting,’ they’ll assign it to someone who’s never held a meeting, often an intern," she said. "They don’t have a clue about what they’re doing." 

Echevarria’s Team Pegine Inc. has worked with branches of the U.S. government for eight years. Clients include the U.S. Army, U.S. Navy and NASA as well as smaller branches of government such as the City of Dallas, the City of New York and the North East Florida Department of Aging. All this is on top of her company’s full roster of corporate clients, such as Colgate-Palmolive, Intel and Booz Allen Hamilton.

She often wins contracts by making contact with and offering services to the right government officials at the right time. Echevarria won one job for the U.S. Social Security Administration after participating in a conference panel discussion with about 11 other speakers—it quickly became clear that the panel was run by an intern.

"He ordered 12 lavalier microphones, which cost a tremendous amount of money," she said. "They could have easily passed around a handheld microphone."

She approached the organizers and said they needed an event coordinator.

"That led to designating me as the planner. So, I became the speaker, the planner and the provider of materials."

With government spending on the increase, now is a good time to diversify client lists to include branches of the government, as Echevarria has done, and opportunities in the public sector for meeting professionals are on the rise according to Mark Amtower, founder of Amtower & Co., a Highland, Md., a company that produces meetings and seminars to advise companies seeking business with the government. While the last couple of administrations in Washington, D.C., curtailed training for government employees sharply, he says the current administration is ramping up spending in this budget category, which includes meetings and events—a trend sure to raise eyebrows and possible ire in meeting professionals.

"It’s going to be revitalized to a level we haven’t seen for 15 to 20 years," Amtower said. "We talk about one of the worst economies ever, and government is one of the bright spots."

U.S. federal government spending on meetings and events totaled nearly US$40 million last year, according to Amtower’s analysis of the U.S. General Services Administration Schedule, a document that many branches of the federal government use to list contracts with vendors who have offered the best value for their products and services. Even adding another $60 million or so that government officials spend on jobs that aren’t included in the schedule, that number is relatively small compared to what it will be in the near future.

"That could easily double or triple this year," Amtower said.

In keeping with transparency requirements, stimulus spending may also indirectly trigger the need for more public meetings run by the government.

Projects involved with meetings, events and conferences aren’t run solely through the federal government, though. Amtower points out that more than 88,000 governments in the U.S., including states, counties, municipalities and school districts must make citizens aware of how they’re spending public money.

"Once they say the word contracting, they really have to open the kimono, so to speak," he said. "All of that entails meetings to a greater or lesser degree."

With many corporations and nonprofits in tough financial straits, public clients offer a benefit that others might not: "They’re pretty timely with paying," said John New, CEO of The Hub, a meeting and event center that works with U.S. government clients such as the IRS, the Department of Labor and the Environmental Protection Agency. 

At first glance, government seems like a golden opportunity, and for some meeting professionals it can be. But there are plenty of caveats to consider.

Government operates like a slow moving bureaucracy, government work veterans say. It can take months to win your first job, so these projects are not a quick fix for companies that need new clients immediately to shore up plunging revenues. Even if your team has done plenty of corporate and nonprofit work, you will have to invest time in learning how to do business with the government in general and in understanding the rules that apply to each branch you hope to serve. On top of this, you also need to set yourself up as a government vendor, which can take additional time and paperwork.

"A lot of people come into the government market looking for instant gratification," said David Powell, chief operating officer of the Federal Business Council, which specializes in organizing meetings and conferences that bring government and industry together. "And they leave very quickly because it’s not an instant gratification market. But if you can think long-term it’s an excellent marketplace."

But even if you win a contract, don’t expect the bureaucracy to sweep itself aside so you can complete a project in record time. It’s not uncommon to have to wait on a small decision—such as whether to serve hot or cold breakfast—while a key decision maker follows a series of slow-moving steps required by a government agency, The Hub’s New says.

"Because of government regulations, often times certain people are the only ones allowed to do certain tasks," he said.

Companies that want to work with government also need the wherewithal to market themselves to clients that are very different from those in the corporate, nonprofit and social fields. If your company has never done government work, new clients aren’t going to come flocking simply because you joined the federal government’s Central Contractor Registry—the main database of available vendors, www.bpn.gov/ccr—or because your team spent a month writing a 45-page proposal to win a job. Government procurement officers will want to be certain that if they award you a contract, you’ll be able to deliver on it and follow the government’s rules. Would-be contractors need to send carefully tailored marketing materials to those who buy for government agencies and attend procurement conferences and other events to meet them and build rapport.

"It’s developing trust," Powell said. "Once they know you and what you’re capable of, know you have the credentials and are there for the long term, then things can happen very quickly."

When working with government clients, be careful about spending, as they are typically more budget-minded than corporate clients.

"With the government, you’re spending taxpayer dollars," said Brian Green, CMP, CMM, a former in-house planner for the Barbados government and now the CEO of Atlanta-based F&G Events, which works with government clients in the U.S. and abroad. "You’re watching every single penny."

Additionally, many branches of the government set fairly low per-diem reimbursements for their employees who attend events, forcing meetings professionals to be creative about accommodating them if they want to do business.

"We try to quote a rate that does not exceed their per diems," said Charlaine Montano, director of sales at the Hyatt Regency Trinidad. "Otherwise they will go with a hotel that will work with them."

And even if you come up with inexpensive ways to liven up a government event, officials may be leery of, say, encouraging guests to dance, lest a photo of partying public servants make it into the press.

"They’re becoming really sensitive about what they book," New said. "Perception is reality."

Accordingly, most government agencies won’t pay for alcohol, so at evening events, meetings professionals may have to get creative or perhaps arrange a cash bar.

Even if there is no press scrutiny, firms that work with government have to be scrupulous about recording every expense in the way public clients require, which can take extra time.

"You want to make sure you’ve dotted every 'i’ and that everything is lined up the way it is supposed to be," Green said. "It has to be that way for government clients. They have to account for everything."

No matter how pumped you may be about the idea of getting work from a big department like the Army or Navy, it’s always important to evaluate whether you can turn a profit on a job—before you bid on it.

"Make sure you are not so excited about getting a contract that you under-price yourself," Echevarria warned.

It’s not uncommon for a procurement officer to ask for a few extras, such as tablecloths after the contract has been signed

"They’re very good at negotiating," Echevarria said. "You have to be able to say 'no’ or 'We’ll have to renegotiate the contract because that will add to the cost.’"

If you negotiate wisely—and impress your government clients—the rewards can be plentiful in terms of new business.

"If you do a good job, they’ll pass your name along," Echevarria said.

Who doesn’t need champions like that in today’s economy? One+

ELAINE POFELDT is a freelance business journalist.

Get Started as a Government Contractor
Here are some tips for meeting professionals who want to work for the government as consultants, contractors and subcontractors.

Attend workshops. The U.S. federal government’s national network of Procurement Technical Assistance Centers (www.aptac-us.org) provides free advice to help you a) determine if your company is suitable for government contracting, b) secure the registration you’ll need (such as a listing in the government’s Central Contractor Registry), c) obtain relevant certifications for disadvantaged businesses that will help you get preferred status in government solicitations and d) find agencies that have previously bought services or products like yours so you can market your services to them.

"They work for you," said Pegine Echevarria, founder of Team Pegine Inc. "They are tremendous resources of information. They can walk everyone through making sure they have the logistics they need to access government business. It sounds a lot more difficult than it really is."

Many federal agencies, such as the U.S. Department of Defense, also run workshops for suppliers who want to work with them, so call their local procurement offices to find out if they offer one in your area. The U.S. Small Business Administration also offers a free online course for smaller firms at www.sba.gov/contractingopportunities.

The Society of Government Meeting Professionals, which has chapters across the U.S., also offers educational programs and opportunities to network with both government planners who outsource work to private firms as well as other planners who serve the government.

Find an accountant who works with Uncle Sam regularly. It is important, especially if you plan to go after larger contracts, to find an accountant who knows how to comply with government requirements, so you don’t run into problems getting paid.

"You need to get an accountant who knows government accounting," Echevarria said.

Watch out for accountants who can’t answer specifically when you ask about new government accounting rules, she warns. Also be wary of hiring accountants who haven’t been to a government accounting workshop recently.

"If they can’t tell you about the workshop, forget about it—the accounting process for the government is always changing."

Also, seek word-of-mouth referrals from other contractors to find a suitable accountant.

Locate a lawyer who works with governments. Many law firms advertise their specialty in this area, so it shouldn’t be hard to find candidates with the expertise to review your contracts with the government before you sign them. Never assume that these documents are essentially the same, even if they come from the same agency.

"Every contract we’ve done is different," Echevarria said.

If you’re unclear about any aspects of a contract, ask the procurement officer to explain. She recommends asking one very important question, even if you’re certain you understand what you’re signing ("What have I not asked that I should be asking?") as there may be policies, procedures and regulations that you don’t know about.