The Rule You Can Break: The GSA Schedule
If you want to win government contracts, you have to be first on the General Services Administration (GSA) schedule…true or false?
Most would say “true.” Most would be wrong.
I’ve sold millions and millions to the government...and we’re talking the federal government here...and only once was the company I was involved with on the GSA schedule.
I don’t have anything against the GSA schedule. I just don’t think it’s required to make government sales and win government contracts. This is a good thing. Getting listed on the GSA contract schedule is time-consuming and expensive. Then, there are lots of rules to follow that impact your pricing, even when you’re not selling from the GSA contract.
Now, don’t get us wrong. To be successful, you have to figure out how to make it as easy as possible for government customers to buy from you. Being on the GSA schedule certainly is one approach. In its most fundamental form, it’s a pre-negotiation of, what the government calls, fair and reasonable pricing. It often keeps the government from shopping around, and even going to bid. There are some networking advantages to it, and you can tout it on your website and marketing outreaches.
In fact, some state and local governments like to use GSA schedules, or at least GSA pricing.
Those are some of the pros. Now, some cons.
First, it’s a hassle to get on it and it doesn’t happen overnight...an understatement. In fact, you probably will want to hire someone who’s experienced with the process. It can be a consultant; not necessarily a fulltime person. I can help with a lot of things, but I’m not the one for the GSA schedule. I don’t like the work.
Secondly, getting on the GSA schedule will affect your pricing throughout your company. Ya see, you’re guaranteeing the government that they’re getting the best price. And, if you sell it for less to, say, your commercial customers, you’ll be in trouble with the government. Again, get someone who’s an expert to help you figure out how this will affect your company.
Then, managing your GSA contract is an ongoing process, particularly as you offer new things and adjust your pricing.
So, you can see. There are advantages and disadvantages. Much to consider.
For now, let’s assume you’ve decided that getting on the GSA schedule is not for you. Then what?
There may be other contracts or buying arrangements that will work just as well, not tie your hands as much, and be easier to accessl. How do you find out which buying contracts might work for you? Ask. Talk to your prospects and find out what purchasing vehicles they like to use. If your prospect coaches don’t know, and chances are good they won’t, talk to the purchasing folks. Do this fairly early in the process. You can’t wait until you have an order running through the system. The purchasing folks may not want to talk with you, since there’s an order in the works. And, it’s too late anyway. Earlier, though, I think they’ll be glad to answer your questions. Then, you can decide if you want to pursue the contracting vehicle.
Still, no. There is another route – partnering with someone who is already on a contract that might work. First, you have to convince them that your product or service fits on their contract, and that there could be enough order volume to make it worth their while. Some companies have contracts where they have quotas and have committed to the customer that they will be constantly bringing related products and services to their contracts. Once you have them convinced, you’ll need to go through their process for getting on their contract.
You won’t get off scot-free. You’ll likely pay the partner a portion of the sale and you will still need to follow contracting rules.
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Finally, don’t even consider getting on GSA (or any other contract) as your contracting strategy. You simply cannot expect to make these arrangements and then see orders magically come in. You still have to make your value propositions to the right people at the right time. The contracts should be only one element of overall strategy. Build relationships. Establish trust. Listen. Present strong value propositions. Nurture relationships...and, listen to the other episodes of our podcast, check out our blog, and read our book. And contact us if you need help.