We make buying and bidding efficient and save you money from the beginning!
How complicated is government procurement? With more than 40 years of experience in government procurement and bidding processes, I can attest that it sometimes a miracle when a purchase or development reaches a successful conclusion. There are complicated layers to prevent mistakes and fraud. However, these same processes always seem to increase cost, sometimes 200% to 500%. Likewise, the time lost in assembling the suppliers and service vendors is enormous.
What are the major faults in government procurement?
Governments usually buy based on the product they need instead of the problem they want to solve. So for example the process is limited to those companies who have the financial capacity to give a quote or submit a bid. Then there is often bonding, insurance, shipping, customs, taxes and waiting to be paid.
In other instances, where not a simple product but rather platform that involves hardware, software or multiple trades and crafts to design, build and deploy; Buyers often have to place the bid tender to a single company. Since the singular company does not provide all of the hardware or software, they must find partners to subcontract those parts that they cannot provide. They increase the subcontractor bids from 20% to 200% and add on to the total bid.
Our Sovereign Methodology
· Needs Study
· Technology Integration
· Associate Negotiation
· Project Negotiation
· Economic Engineering & Financing
· Project Management
· Focus on Details
In a nut shell, we assemble the best companies under one entity at the least cost for your benefit, preventing major cost overruns and delays.
We make your entry into new territory a gainful experience!
The typical small to mid-size company attempting to sell to foreign governments expends between $780,000 and $2,000,000 and 27 months in time before solidifying its position to bid a contract successfully. In this study we are not including the major players, I.e., Ratheon, Boeing, etc. As a note, the major players typically spend more than this annually to maintain their positions in each country. So, the question is, “do you have the financial ability and cultural savvy to attempt breaking into a new market?”
The typical example of a fledging sales insurgent is, well, let’s call them XYZ Company since we are forbidden disclosures. XYZ, a spinoff of top technical executives from a large international defense contractor, They were extremely upset after designing and patenting a AI based tracking system component that could be integrated into an artillery platform, that their company decided to delay manufacturing beyond the prototype until they achieve near end-of-life on their currently production system with the military. In other words, they wanted to bleed every nickel out of the pentagon before offering the advanced design.
They were able to leave their company and trade-off their golden parachute bonuses to have total control over the patent and in return give a royalty to their employer. They then achieved a legal release and attorney’s opinion from the pentagon to utilize and sell the system to an approved list of other military contractors and nations. They raised $10,000,000 among friends and family to start their business. They built their prototype as well as multiple converter/links where it could function with several known pieces of artillery and radar being used in Latin American countries on the approved list. And they assumed that since their system could be sold at half the price of the current system in-use, that they would sell like hot cakes.
They had consumed six months at the beginning readying their hardware & software to be able to demonstrated and provide a hard POC. Also during this time, they had searched through Google and Linked for in-country assistance in sales to the respective governments. Before this, they had had many conversations with top rated consulting firms and defense contractor consultants in the USA, seeking help to penetrate Latin markets. But they soon discovered that the best companies in this business, dealt with competitors and could be hired, or they dealt with large defense contractors, making the initial retainers out of their reach (above $1M to start with monthly estimated expenses greater than $200,000).
Ultimately they hired in-country advisors and established their company branch offices in their target nations at a cost of $350,000 with an estimated monthly budget of $90,000. The companies that they worked with or through always gave them the proper and legal structure to do business, while assisting them in preparing bids and documentation according to each company’s laws. However, three years passed. No contracts were awarded and they were broke.
What was their mistake? First let me say that they did avoid the typical pitfall, in that they did not assume that they could use corruption in their favor and pay off people to obtain their contracts. Most companies fall into this category and are eaten alive by conmen and corrupt politicians who take their money, bleed them for more money until the company is broke. And they have no recourse since they were guilty of corrupt practices just as were the conmen they paid. No their mistake was doing business correctly without blending their quest with the culture.
Blending with the culture, in simple terms, translates into ethical sales processes that go beyond mechanical processes. Remember, people manage bids. People buy products. And people are emotional. People want to trust the person that they buy from. And smart buyers know that a contract is only as good and valid as it the person and company that sells it.
Rule #1: Birds of a feather flock together. You need introductions and presentation. However, if the person who takes you to a meeting is not held in esteem by the people you meet, you will not be respected and will not be trusted. However, if you are presented by someone they have known for decades, you will be treated as a friend. Instead of this business courtship needing months or years to move to a comfortable level of trust, entering with the right person or people, gives you an instant level of trust.
Rule #2: Never open your laptop to start a presentation in the first 15 minutes. Never Never Never…start a slide show or presentation before you complete “Rule #3.” I have walked into a sales meeting with a 60 page all-inclusive portfolio slide show and never show more than six slides. I do make a printed brochure of two-double-sides slick sheets which tell who we are, who we work with, what products we have on the shelf and why you should do business with us. But actually, I only sell myself.
Rule #3: Don’t try to sell anything. You may have the best widget on earth; but if the buyer needs something else and cannot see how yours can help him, not only will he not like you but more over he will not buy from you. First discover what are the buyer’s problems today. He already accepted your meeting know what widget you have and has some interest. But dig into his mind and find out what he really needs. Help him solve his problems. I have always found that I only needed to make minor modifications to what I was selling or usually it was helping the buyer modify or change his base technology to fit the need.
Having confirmed meetings face-to-face with government decision-makers of near to impossible unless you are already contracting with them. Expect delays, cancelled meetings and substitutions in who you will meet with. This is especially true at senior levels because they have more communications with the top of their food chain.
Bottom line…you would not start a new business without making a business plan, although you know that it will be fluid, flexible and may change. The same is true when trying to enter a new market. If you sign an NDA with a potential in-country representative and they are hesitant to give you a business plan either before or after you sign a Letter of Intent to start working together; they are not professional. Personally I require this because I want expectations to be mutually clear; because, I cannot make it happen without you.