Increase Your Sales To The Government

After continually watching government sales awarded to his competitors, Bob Axline decided to get serious about selling to Uncle Sam.

Axline is the president of Plastic Card Systems (Marlboro, MA), a reseller of video identification (ID) card printing systems. These systems automate the production of identification badges and membership cards. Plastic Card Systems, with 12 employees, had gross sales of $3 million in 1997.

Government agencies that want to purchase equipment – ID card printing systems or otherwise – often solicit and review bids from prospective sellers. Axline recalls bidding on a number of such opportunities, only to frequently lose the sales to competitors.

He explains, "We'd spend a lot of time responding to an agency's bid. However, most of the time, the sale would go to a reseller that lowered its prices to the point of almost giving the hardware away. I knew we couldn't compete in that type of environment."

So, Axline concluded that Plastic Card Systems needed to be placed on the "schedule" for the General Services Administration (GSA). The GSA schedule is a list of GSA-approved products and supplies that government agencies buy from civilian companies.

The GSA "provides expertly-managed space, supplies, services, and solutions, at the best value, to enable Federal employees to accomplish their missions." More information on the GSA can be found at its Web site (www.gsa.gov).

Getting placed on the schedule proved to be more troublesome than Axline expected. As a result, he hired a consultant to help Plastic Card Systems. In the following pages, Axline describes the process of getting on the GSA schedule, as well as the benefits to being on it.

The Benefits To Being On The GSA Schedule
According to Axline, companies do not have to be on the GSA schedule in order to sell to the government. However, being on the schedule is an important advantage.

"For example, a government agency can buy personal computers (PCs) in one of two ways," Axline says. "The agency can accept bids from prospective sellers. Reviewing bids, and selecting one of the bidders, can take an agency several months.

"The other alternative is for the agency to buy from a company on the GSA schedule, which is much easier for the agency," Axline continues. "Prior to being placed on the schedule, companies have to agree to fixed prices for their products. So, an agency doesn't have to go through a prolonged bidding process if it buys from a company on the schedule."

Becoming Intimate With The Government
As part of the process of getting on the schedule, Axline had to provide the GSA with a great deal of information about Plastic Card Systems. This information encompassed several areas:

• Financial – Axline had to disclose information related to Plastic Card Systems' income, revenues, and taxes. "You have to provide those statements because the government wants to know if your company is financially stable," he says.
• Products and vendors – Axline had to provide a complete list of Plastic Card Systems' products, as well as the manufacturers of those products. The manufacturers had to state, in writing, that Plastic Card was an authorized reseller for them.
  
  Plastic Card's suppliers also had to inform the GSA that their products would be available for at least the next three years. "The GSA also wants to know that the manufacturers you buy from are stable," Axline adds.
• Pricing – In addition, Axline was required to submit Plastic Card's product prices, including list prices, dealer discounts and other contract discounts.
  
  Settling On Prices
  After submitting the above information, Axline says the next step was negotiating prices with the GSA, which took several months. "We made them an initial price offer," he says. "And then they countered our offer. We had to reject their counter offer because it would have required us to give the equipment away. We went back and forth several times. It was a negotiation like anything else, like buying a car."
  
  Axline says companies shouldn't expect the price negotiations to be easy. According to Axline, the GSA expects companies to lower their prices somewhat, because companies reduce their sales expenses by getting on the schedule. "The GSA thoroughly reviews prospective sellers," Axline explains. "That gives government agencies an extra level of comfort in buying from those companies. And that benefits us, because I don't have to spend time convincing a government agency that we're a good company."
  
  After reaching an agreement on prices, Plastic Card's products were placed on the GSA schedule. In doing so, Axline agreed to those prices for the length of Plastic Card's three-year contract.
  
  Should You Work With A Consultant?
  Axline hired a Washington, D.C. consultant to help Plastic Card Systems in its efforts. Axline paid the consultant several thousand dollars over the course of approximately six months. The money was well spent, according to Axline. "If I had to do it all over, I would hire a consultant again," he says. "It's like hiring a professional accountant to do your taxes. I probably could prepare my own taxes, but it would take me a lot longer – and I would suffer a lot of headaches. But for an accountant, it's a snap."
  
  The consultant proved valuable in several ways, including:
• The price negotiating process – Axline decided to hire the consultant partially because the consultant had experience negotiating with the GSA. "The consultant knew the right people to talk to," Axline says.
• Paperwork – According to Axline, getting placed on the GSA schedule requires companies to complete a great deal of paperwork. "Some of the forms are 50 pages long," he says. "I probably could have completed them on my own, but it would have taken forever."
• Travel – Because the consultant was based in Washington, D.C., Axline saved on travel expenses. "If I hadn't hired him, I probably would have had to make a half dozen trips to Washington," Axline says.
  
  The Benefits of Government Sales
  Over the last two years, Plastic Card Systems' sales have grown more than 220%. Getting placed on the GSA schedule is one primary reason, according to Axline. "By being on the schedule, we're getting a contract with West Point," he concludes. "A sale like that will help us sell other accounts. So being on the schedule helps us in multiple ways. Resellers that are serious about selling to the government should be on the schedule. Our resellers also can take advantage of our GSA contract."