Why should you look into selling to the federal government? The US government is the largest buyer in the world. As much as 95% of the federal purchasing market is made up of just 23 agencies. The federal market for IT spending is the fastest growing marketplace in the country. As a reseller, you do not necessarily have to learn new markets, as every vertical market that exists in the commercial space has a counterpart in the federal space. Also, government contracts are a great source for incremental revenue, and the government is a reliable customer during those times when the commercial sector may not be.
There are four main avenues in selling to the federal government:
General Services Administration (GSA)
The GSA establishes long-term government-wide contracts that allow government agencies to acquire commonly used products and services from commercial suppliers. The GSA negotiates and awards Multiple Award Schedule (MAS) contracts to companies based on the prices they charge to commercial customers. The GSA contract is considered a preferred source across government agencies.
Often resellers find themselves not being able to offer complete solutions to government agencies because contracting officers look to source with a single purchase. By “teaming,” resellers are able to fulfill the requirements of the government contracting agency. A teaming agreement is not considered a government contract, rather a private contract between two or more parties and would be governed by the Uniform Commercial Code.
Contractor Team Agreements (CTAs)
A CTA is an agreement between two or more GSA schedule holders that work together to meet the government purchasing agencies’ requirements. This agreement allows resellers to provide a total solution without having to have skills beyond their core competencies and allow them to gain a competitive edge over single contract holder competitors.
This type of relationship is a commonly used arrangement whereby a prime contractor and subcontractor agree to combine resources to bid on a government purchase. Only the prime contractor is required to have a GSA contract. In this scenario, the prime contractor manages the GSA contract and a separate contract with the sub-contractor. The pricing and invoicing are directly between the prime contractor and the government agency. The prime contractor cannot delegate responsibility for performance to the sub-contractor and is liable for the performance of the opportunity. In this scenario, only the prime contractor is allowed to interact with the government.
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