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Government agencies -- from local entities to the largest federal departments -- spend billions of dollars each...
year on IT.
It's a big target of opportunity for a channel partner, but it also has dramatically different rules of engagement compared with other vertical markets. How can a reseller or managed service provider crack the public sector market?
In this Ask the Expert, Tony Stirk, president of Iron Horse, a network service provider and computer product reseller based in Springfield, Va., discusses the nature of the public sector, market requirements regarding qualification and ways to approach government business. Stirk has been an ASCII Group member since 1994.
When you do government business, you sign their contract and commit to following their rules. Government regulation can make it difficult to make "decent" profits. Still, government contracting work can be worth pursuing. Just keep in mind that the public sector market is like any other vertical: You need to know what you are doing to sell to this market.
Almost all government business above a certain threshold must be "publicized" in some manner and open to all "qualified" bidders. Publicized may mean getting an email from a bidder's list or visiting a particular website where the action is published. Qualified may mean that you have to be licensed in the state, have a particular certification like an ISO certification, or be a government certified small or minority business. Qualified may also mean that you must be able to offer products on a state, General Services Administration (GSA), E-Rate, or Western States Contracting Alliance (WSCA) contract. It is often easier for government agencies, and for you, to do work under certain thresholds where there are fewer rules that apply and less scrutiny.
If government clients are not calling for you to sell them something now, do you have something unique to offer them that others do not, such as the right contract, a certification as a small business, special government pricing on items, or something else?
Tony Stirkpresident, Iron Horse
To get a better idea of how you might do business with state governments, you can visit their websites. Governments tend to be very open about how they do business. They supply procurement guides, relevant contracting law and give you access to websites and resources to examine. Best of all, there is always a real person in government you can talk to about doing business with them. They will often tell you what they bought, when and for how much, if you just ask.
The feds and states have outsourced a lot of their work farther down the food chain and a lot of it goes to private contractors, who are often the ones doing the actual government work. Many of the automated procurement systems used by individual states, for example, are put on the Ariba platform. The U.S. Department of Energy has entire sites that are government owned, but contractor operated.
I have found that contractors are the easiest group to work with in the public sector market, followed by towns, counties, cities, the feds and then states.
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