Uncle Sam may want you - small businesses and government contracts

I like to emphasize to people that "my" company is a family business. My husband, son, daughter-in-law, and sister - all of whom work in the firm - have as much to do with Vita-Erb's success as I do - and so does our Uncle Sam. In fact, if it weren't for Uncle Sam, we wouldn't have $1 million in annual sales and probably wouldn't t even be in business.

Our Uncle Sam is everyone else's Uncle Sam: the federal government, which since 1985 has been virtually the only buyer of our skin-care and janitorial products. It uses them in facilities such as government buildings, military bases, and veterans hospitals.

We have manufactured herbal-based bar and liquid soaps, hand cleaners, shampoos, and moisturizing lotions since 1978. But Vita-Erb's first break came in 1981 when our products were accepted for use by the Cleveland Clinic, an internationally known, privately run medical and research center. Even then, with annual sales of just $5,000 and little seed capital, developing a retail market or even eye-catching packaging didn't seem possible.

So, looking for a way to grow the business without retail sales, I attended a Small Business Administration seminar on doing business with the government.

After applying for and receiving approved-vendor status with agencies such as the Department of Defense, the General Services Administration (GSA), and the Department of Veterans Affairs, we began responding to solicitation requests.

The first government contract we won, in 1985, was to provide janitorial supplies to the Tennessee Valley Authority. That immediately took our annual sales from $5,000 to $25,000. Since then, we have won contracts as big as $900,000 for a two-year pact, and we have developed a following among private consumers who have been impressed with our products when they used them at government facilities. Were starting to use that following to build a retail market.

Vita-Erb has shown that it's possible to team with Uncle Sam to build your emerging business. Here's what you need to do:

Read the fine print. Don't think government purchasing agencies care more about quantity than quality. Like the buying public, the government expects reliability performance, and consistent quality from the products it purchases.

Unlike retail customers, however, government agencies spell out their expectations with detailed specifications that cover everything about the item and its packaging. So manufacturers know up-front whats expected.

Do your homework. Everything about government purchasing is public information, so before putting any solicitation together we go directly to the GSA, for example, and find out how much of a particular product was purchased the previous year, at what place, and from whom. Those details help us make marketing decisions.

Don't bid yourself out of a profit. Trying to be the lowest bidder isn't the way to go. A sale without profit is worse than no sale at all.

Make performance count. Government contractors are graded on their performance. Inconsistent quality, late delivery, and packaging that doesn't follow the outlined specifications all result in lower grades.

Don't think special status win always win the contract. Minority or female ownership doesn't necessarily win contracts; solid business practices and smart marketing do.

Check the Internet. Finding out whats being put out for bid has never been easier. Federal and state World Wide Web sites offer outstanding opportunities for finding out who is looking for what and when.

Consider your peers. When people say, "Isn't the government a pain to do business with?", I reply: "Look who Boeing is doing business with." Not bad company, when you think about it.

COPYRIGHT 1997 U.S. Chamber of Commerce
COPYRIGHT 2004 Gale Group