Join Over 5,000 People Who Get Our Content Every Month!

* indicates required





Click Here to Read This Podcast Transcription

One often-overlooked difference between the federal market and the commercial market is that federal market sales are won more by process than by relationships. Contracting Officers (COs) cannot buy based on relationships alone. Relationships matter (see FAR Parts 3 and 9), but relationships are usually not the most important factor. The relationship is 20% of the decision. The other 80% is the competitive process.

Compare this to the commercial market. Here the ratio is reversed. Our relationship with a company is often 80%, or more, of our decision to buy from them. The other factors such as price and past performance do matter, but not nearly as much as our relationship with the seller. How did you selected your doctor, your homebuilder, your banker, your car dealer, your airline, your computer, your grocery store? Was the decision to buy from a particular company driven by relationships with friends, customers, or because you bought from them before? I bet so.

Understanding this Relationship-to-Process ratio in the government market is key to winning. The relationship you build with an agency, a program manager, or even a contracting officer will only get you so far (about 20%). You win in the other 80% (the competitive process). Even on existing contracts, regardless of how good the incumbent’s relationship is with the customer, the CO must eventually re-compete it.

Both relationships and process matter. Just be sure to get your ratio correct. You will win more often by aligning your time and resource around 80% process and 20% relationships.

Time Zone:2 & 3

Contracting Officer Podcast © 2019
Loading...