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Doing business with Uncle Sam.

Doing Business With Uncle Sam

Anyone who pays taxes knows Uncle Sam has plenty of money to spend. Where's it all going? Contrary to what you might believe from news media reports, it's not all going to multi-billion-dollar corporations that research and develop toilet seats and coffee pots. A healthy chunk of the government's budget is going to small businesses, just like yours, who can supply the products and services needed to run the thousands of local, state and federal government agencies.

If you're not already doing business with the government, consider working it into your marketing scheme. Military installations, in particular, are in constant need of firearm-related supplies and services, and there are enough of them scattered throughout the country to offer every reputable, retail gun dealership a piece of the action.

Before deciding how seriously you want to solicit this market, however, you should be aware of the pros and cons of trading with the "feds." The business is available, but it is not without its own unique frustrations. Will they be worth it to you in the long run? Consider the following in making your decision:


1. The money and the need for your services are both real and available.

2. You will work within strict terms of a contract.

3. As long as you follow terms of the contract and supply a quality product, you are assured of getting paid.

4. If you're the lowest reputable bidder in your geographic area and offer the necessary product or service, the government is virtually obligated by law to give you its business.

5. If you're a minority, woman, small business (as defined by the contracting officer), or a combination of all three, your chances of getting the government contract are even better.

6. Most government agencies are stable; in other words, that Air Force base on the edge of town could be a repeat customer until the day you sell the gunshop and retire.


1. Paperwork. To solicit government business and bid on contracts, you'll be required to fill out a few forms - in "triplicate," of course.

2. Bureaucratic inefficiency. Your paperwork, once it reaches the targeted government agency, has a tendency to land on the wrong clerk's desk and remain there, lost in a pile of similar paperwork, until someone realizes the system has slowed or stopped. Unfortunately, this seems to happen most often within voices, once the product has been supplied and the supplier is waiting for payment.

As long as your tolerance for stress if fairly high, the advantages of trading with government generally outweigh the disadvantages. How heavily you will want to pursue government business depend on a variety of factors, such as the size of your government market, the scope (i.e., will they need a continuous supply of exhaustible items like ammunition components, or will one order of ten leather shooting coats satisfy them for the next ten years?), and the competition. (If a minority woman opens up an identical, small successful gunshop right down the street from you, don't waste your time pursuing government business.)

Even if the prospects for steady government contracts appear strong, the prudent business owner will start slowly and get a feel for the system before throwing all his marketing energy in this direction. As one shop owner in Washington State puts it, "My bread and butter is still my walk-in retail customer business. Anything I do for the government is gravy, and I can live without gravy if I have to."

If gravy agrees with you, there are several ways to find out what government agencies may need your services. The easiest is to contact your regional Small Business Administration (SBA) Information Office or U.S. General Services Administration (GSA) Business Service Center. The SBA is your best starting point if you offer only one or two services or products. If you can supply a variety of items, contact the GSA Business Service Center, since GSA acts as a purchasing agent for many items used by federal and military agencies.

Other sources of information are the "U.S. Government Purchasing & Sales Directory," a booklet published by the SBA and available at your local library. While at the library, leaf through a copy of "Commercial Business Daily," a GSA publication listing government procurement invitations, contract awards and sales of surplus property. (If you really like "CBD," you can subscribe to it for about $261 annually.)

You can also contact the Federal Procurement Data Center (FPDC), which is a contract clearinghouse for information on most items and services purchased by the federal government. The FPDC publishes a quarterly report listing who was awarded bids and for what amounts. This is a good publication for market analysis if you're pursuing government business on a large scale. Write to the FPDC at 4040 N. Fairfax Dr., Suite 900, Arlington, VA 22003.

Perhaps the most effective method of reconnoitering government business, however, is word of mouth. If you live near a military installation, for example, you probably have soldiers and/or competitive shooters from the base who frequent your store. Find out who runs the marksmanship training unit or shooting team at the base and set up a rapport with that individual. When it's time for him to buy shooting mats, match-quality M14 barrels, or related items not available through federal supply channels, he may be authorized to purchase them locally - from you.

Once your various sources let you know which agencies could use your services, contact the agencies in writing and ask them to send the necessary forms for placing you on a bidders' list. They'll send you Standard Form 129, and the military installations may also send you a Department of Defense Form 558-1, along with a specific list of the products and services they buy.

You will be asked to supply the name of each product or service you offer, any defense items or services you've supplied in the past, and additional items or services you could provide.

In time, you should receive invitations to bid on appropriate government contracts. If, for some reason, you decide not to bid on a particular job, write to the agency's purchasing offices and request that they leave you on the active bidders' list. Otherwise, you may be dropped.

If you choose to bid, do so carefully. "An invitation for bids is actually a contractual document," according to a GSA pamphlet titled, "Doing Business with the Government." The government is interested in a bid only on the items they specify in the invitation; they don't want you bidding on substitute merchandise. Consider all your costs - material, labor, overhead, profit. Pay close attention to other specific data in the invitation, such as required delivery time, packaging, shipping procedures. Read and understand all the clauses dealing with default, changes and disputes. Note that late deliveries may be accepted, or the government may instead declare a default, meaning it's not obligated to pay you a dime. In fact, it can re-purchase the item from another source and charge you, the original contractor, for any excess costs! Such horror stories seldom materialize, since most bidders are responsible business managers. Still, contract clauses like this can be enforced if the contracting officer goes "by the book."

As bidder, you may spell out your own terms for payment. Offering a cash discount for prompt payment is a tangible enticement for the government.

When you're ready to submit your bid, be sure to sign it, keep a copy for your records, and include a tagged sample of your product if required.

If you are granted the contract, you will receive a copy in the mail. Review it carefully and proceed with the job.

The most frustrating aspect of trading with the government is the collections procedure. Normally a regular invoice will get their attention, provided it's sent to the proper billing address (so listed on the contract). Attach a copy of the contract to your invoice. If you've offered an early-payment discount, the government is obligated to take advantage of it. Nonetheless, if your terms are "1 percent 10, Net 30," don't expect your check on the eleventh or even twelfth day. The government considers payment made on the day the check is issued and authenticated; it could be a couple weeks before it finally makes it into your mail slot, so plan accordingly.

For more information on trading with the federal government, look for the GSA Business Service Center or the Small Business Administration in the "Government Pages" of your phone book.

You can obtain copies of these publications for your own records:

- "Selling to the Military" and "Doing Business with the Government," available from: Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402

- "U.S. Government Purchasing & Sales Directory," published by U.S. Small Business Administration. Contact the field office nearest you.
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Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Title Annotation:gunshops
Author:Manning, Jan
Publication:Shooting Industry
Date:Dec 1, 1989
Previous Article:SI takes a look at: Thomson/Center Arms; solid growth from a base of quality.
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