Finding Opportunities And Providing Services To The Federal Government
Knowing how to start selling digital services to the federal government can be a daunting task for even the most seasoned business owner.
This guide is intended to walk through some of the initial processes required in an effort to reduce the time it takes to bring innovative digital service companies into the government marketplace.
Prepare The Transfer Of Premises
If the seller owns the business premises and is transferring the title to you, search Landata to make sure the seller has free and clear ownership of the premises.
If the seller is assigning the lease to you, prepare the proposed assignment of lease.
Be wary of:
- landlords who only give short leases
- leaseholders who offer the business for sale at reduced price, but then offer you the same lease at a premium.
Help With Government Contracting Companies For Sale
Oftentimes, buyers and sellers do not understand the complex regulations involved with government contracting companies for sale. Not only are novation agreements a potential issue, the due diligence needed and the ability to address buyers other business relationships that can impacts their small business size status can be a huge problem. Contact Theodore Watson at 720.941.7200 for immediate help.
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Small Business Asset Purchase Vs Stock Purchase Sales
The process of buying and selling a business that has federal government contracts begins with knowing how the system works and using it to the clients advantage. At Watson & Associates, LLC, our federal contract novation lawyers have helped large and small businesses to navigate through the complex nuances involved with small business asset purchase vs stock purchase business sales. Buyers and Sellers with a federal contract transfer must also be aware of stock purchase vs asset purchase advantages and disadvantages.
- Did you know that without contracting officer approval, a signed contract novation agreement can be deemed meritless and has no value? See Size Appeal of eTouch Federal Systems, LLC, SBA No. SIZ-5280
- Did you know that contractors must request submission of any comments or objections to the proposed transfer within 30 days after notification to the government?
- If the parties do not get the government involved or fail to follow FAR novation of contract rules, there can be legal consequences.
- Although many government contractors understand that an asset purchase sale is favorable for government contract novations, there is much case law that shows not all commercial small business asset purchase agreement templates are acceptable to the federal government.
THE ASSIGNMENT CLAUSE DOES NOT ON ITS FACE ALLOW FOR SELLING GOVERNMENT CONTRACTS
What Kinds Of Companies Are Selling To The Government
If you’re curious, you can visit USAspending.gov and go through the list of recipients and see how much money different companies have received from government contracts.
Don’t let these numbers mislead you thoughgetting into B2G sales doesn’t mean that you have to chase multi-billion dollar deals. There are literally government contracts that are just a few hundred bucks. So whatever you’re selling, as long as it could help the a government agency work more efficiently, you could sell it, even if you’re running a tiny operation.
Federal Government Contract Novation Vs Assignment Of Contract
Business Asset Purchase Agreement and Contract Assignment Clause Issues
What is the difference between assignment and novation? Simply executing a business asset purchase agreement and a signed when buying or selling a business is not the end of the legal analysis when there is a government contract involved. The contracting officer must approve the assignment of government contracts and or . Your novation letter should address critical issues that answer the contracting officers concerns about the risk of performance. Novating government contracts is all about minimizing the risk to the agency.
In one case, SBA OHA ignored the argument that when novating a contract, its purchase and sale contract with the buyer had the legal effect of divesting the seller of any control over the current contracts. In that case, there was no formally approved novation agreement FAR contract. As a result, the whole transaction went to waste because the parties lacked a full understanding of the rules. A Government contract may not be automatically transferred to a third party. See 41 USC 15.
On the issue of contract novation vs assignment, although the FAR 42.1204 assignment novation clause allows the buying and selling parties to execute a novation vs assignment agreement due to an asset purchase or stock sale, companies should still assess legal issues related to violation of SBA small business size standards.
Potential SBA Size Standard Violations
We Dont Get Paid Until You Do
Prime Investments believes that by aligning our interests with you, the client, we can build a process based on shared goals and trust. Unlike other advisors, we charge no up-front fees or retainers, no appraisal fees and, in fact, no fees of any kind until and unless we sell your business. Our Success Fee is based entirely on the price your business actually sells for our only motivation is the same as yours – to sell your government contracting business to the strongest buyer at the highest possible price.
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Make A Lot Of Cold Calls
SeamlessDocs found cold calls to be the most reliable method of drumming up new business. Emails simply werent as effective90% of the demos that SeamlessDoc sets up are via phone.
Think about your average government employee, with an inbox stuffed with emails from concerned citizens. Theyre not going to give your cold email the time of day. Government employees live on the phonelive there with them. Getting someone on the phone is one of the most powerful ways to close deals, and its especially true when it comes to B2G sales.
We’ve built our sales platform with integrated calling to help reach more prospects in less time, taking out all the manual busywork.
- So youre using a filing cabinet to manage thousands of submissions?
- Can I e-sign them?
- Can I submit them online?
How To Register As A Small Business
Register for a Data Universal Number System, or as its more commonly known as, D-U-N-S number
10 minutes // 1-2 business days to approve // free
A D-U-N-S number, issued by Dun & Bradstreet, is a unique code is used to identify your business and establish your business credit file.
Identify the classification of your products and services
As part of the federal registration process, you will also need to know where your products or services classify under the North American Industry Classification System code for administrative, contracting and tax purposes. You can search for your NAICS code using keywords which best describe your business. The Small Business Administration uses NAICS as the basis for its size standards and all procurements utilize NAICS codes to describe the principle purpose for the acquisition.
Common NAICS codes for digital services include:
- 511210 Software publishers
- 541511 Computer software programming services, custom
Register your business with the System of Award Management
1 hour // 4 days or less to approve // free
Pre-requisites: D-U-N-S number Tax ID number , NAICS Code
SAM is the system of record for vendors doing business with the federal government. Using SAM you can self-certify your business’ size and socio-economic status.
Instructional video on how to register:
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Buying A Federal Contractor
We have been seeing many instances where acquiring another federal contractor has been seem as creating many potential advantages. Whether by eliminating duplication of effort or combining two business bases to increase the denominator of the indirect rate calculation, combining two can lead to reduction in overhead and G& A rates making the new business more cost competitive. A purchaser can gain the experience of the company it buys thereby creating the opportunity to create new areas of work. One company can compliment the strengths of another for example, we have seen one company with a strong specialty or positive relationship with an important buying office while the other company brings much needed financial backing needed to take advantage of great new opportunities. We have seen the much discussed synergy become a reality under the right circumstances. Done correctly the acquisition process can be a smooth transition to a combined stronger entity. Done incorrectly, the acquisition process can be frustrating, creating distrust and misunderstandings often landing in court where only t he lawyers benefit.
Where the government consents to a transfer, a novation agreement is signed by the buyer and seller and the government formally recognizes the buyer as the successor-in-interest to the contracts.
Structuring the Deal
Compliance Related Considerations
How A Tiny Startup Accidentally Discovered The B2g Business Model
SeamlessDocs didnt set out to revolutionize the way governments digitally process forms. The startupwhose software instantly converts PDF or Word docs into dynamic, smart, cloud-based formswasn’t even thinking about the government.
They began like many other startupswith a vision, a couple of people, and a rough product. They had found some traction with small businesses, but not enough to achieve the kind of growth they aspired towards.
The turning point came two years ago, as , the companys Director of Sales, was working late into the night. The phone started ringing: Hey, can I get a demo? I work for the state of Tennessee. Im in the HR Department, and was wondering if I can use your electronic signatures on my forms.This call changed the future of the company.
Suddenly, everything clicked. Instead of selling to small businesses with a few forms each, SeamlessDocs looked at the government, and saw an industry drowning in permits, registrations, applications, contracts, and surveys. They saw a sector ripe for disruption, and the perfect market for their product.
The whole team sat down and decided to radically shift gears in their sales strategy to dominate one industry: the government.
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Value Of The Inventory And Other Assets
If you are selling your business or part of your business, you generally set an amount for the entire business. In some cases, your sales agreement sets out a price for eachasset, a value for the inventory of the company and, if applicable, an amount that can be attributed to goodwill.
Depending on your situation, you may have a recapture or a terminal loss of capital cost allowance on the sale of your assets.
You may also have sold an eligible capital property. If this is the case, you have to subtract part of the proceeds of disposition from your cumulative eligible capital account. For more information, go to eligible capital expenditures.
Government Contract Novation & Small Business Asset Purchase Legal Services
When the sale of a business, assignment of contract, business purchase contracts, or merger and acquisition of companies include government contracts as assets, our government contract novation attorneys help by:
- Managing and overseeing the business purchase and asset sale process for FAR compliance.
- Assessment of stock purchase vs asset purchase advantages and disadvantages
- Pre novation price analysis for arms length transactions
- Developing government contract business novation agreement requirements
- Providing small business merger and acquisition help
- Native American and SBA 8 business purchase agreement drafting
- Service Disabled Veteran Owned Company business asset purchase agreement services
- Drafting required FAR contract novation agreement documents for contract transfer
- Compiling asset purchase agreements/contract to purchase a business from your state-level attorneys
- New Novation sale and business contract of sale compliant with FAR regulations
- Consulting on merger and acquisition of government contracting businesses
- Assignment of contract legal services for federal contractors
- Representation with asset vs stock purchase advantages and disadvantages
Federal Government Contract Novation Sales
SINCE SOME OF OUR PROFESSIONALS WORKED FOR FEDERAL CONTRACTING AGENCIES, WE UNDERSTAND BOTH SIDES OF THE COIN AND CAN BETTER PREPARE YOU GETTING AN APPROVAL FROM THE CONTRACTING AGENCY.
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What Is The Gsa Schedule
The GSA Schedule, also known as Multiple Awards Schedule and Federal Supply Schedule , simplifies the sale of products, services, and facilities to all U.S. Government agencies. Schedules provide an efficient way to connect government buyers to any size business which produces high-quality products and state-of-the-art services.
The GSA plays a crucial role in connecting the business worlds private sector with federal agencies to fulfill their needs.
Using the GSA eLibrary, government buyers can easily find your products or services where they are broken down into large categories.
The GSA Schedule process allows purchasers a simpler way to buy all in one place. Put simply the GSA Schedule acts like an Amazon for government consumers. Purchasers will search the GSA eLibrary, find the products/services they need, and look for the best company.
GSA Schedule contracts span five-years and can be renewed for three separate terms between a government agency and a commercial supplier.
GSA Schedule contracts guarantee your products, services, or facilities will be sold at a fair price to the government, and in turn, bring your company an indefinite quantity of reliable business.
Additionally, GSA contracts are government-wide, meaning they can be utilized across all government agencies, including the DOD, FEMA, the Department of Energy, and many others. These high-profile agencies can develop your business for the future.
Define Your Government Buyer Personas
In any area of sales, its important to get your buyer personas right and know who youre selling to, before doing anything else. This is especially true for the government, where you deal with many different buyers, all of whom affect the outcome of the sale. When selling to the government, list-building is a lot easier than in traditional salesall the information you need is available to the public. Unlike private companies, the government is transparent.SeamlessDocs started simple: They went online. They found the names, emails, and addresses they needed to start building their personas, and split them into three main categories:
- User buyer: the person whos going to actually use and implement the product, typically in the IT department.
- Economic buyer: the City Manager-type figure. This buyer controls the budget and signs off on purchase orders.
- Executive buyer: can be the same person as the economic buyer. City Manager, City Clerk, City Administrator, CIO, CTOpeople who occupy managerial roles in government. This buyer looks at strategic issues and long-term effects of a product or service.
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Small And Disadvantaged Business Opportunities
The Department of Justice’s Office of Small and Disadvantaged Business Utilization is focused on increasing contracting opportunities for small businesses, small disadvantaged businesses, women-owned small businesses, and service-disabled veteran-owned small businesses as prime contractors and subcontractors.
Department of Justice Non-Retaliation Policy
Alternatively, small businesses may choose to contact the SBA/ONO directly by calling 1-888-REG-FAIR , or visiting the Ombudsmans website.
The Transaction May Create A New Obligation To Submit Subcontracting Plans
require the contractor to submit a subcontracting plan for the contract, if the contracting officer determines that subcontracting opportunities exist. In addition, FAR 19.705-1 as revised will require that, unless the contractor has a commercial plan, the contracting officer
The Final Rule specifies that, if the contractor adds a subcontracting plan as a result of a size re-classification — or a modification to the dollar value of the contract — then the subcontracting goals will apply from the date of incorporation of the subcontracting plan into the contract. The contractors subcontract reporting obligations, including submission of an Individual Subcontracting Report , will be triggered on a cumulative basis from the date that the subcontracting plan is incorporated into the contract.
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Verify Right To The Business Name
Use ASIC’s business name register, and company and other registers to search the name of the existing business to ensure the seller has:
- free and clear ownership of the business
- full rights to transfer the business to you.
Look out for other businesses that own rights over copyright or other intellectual property.
The New Rule Adds Additional Obligations Vis
The Final Rule will amend the FAR to impose an additional notification requirement on prime contractors for competitive subcontracts over the simplified acquisition threshold in which a small business concern received a small business preference. In such instances, the prime contractor must, prior to award of the subcontract, inform each unsuccessful small business subcontract offeror, in writing, of the name and location of the apparent successful offeror and if the successful subcontract offeror is a small business, veteran-owned small business, SDVOSB, HUBZone small business, small disadvantaged business, or women-owned small business concern.
Under the revised FAR, prime contractors also will need to assign to each subcontract the NAICS code and corresponding size standard that the prime contractor determines best describes the principal type of supplies or services to be subcontracted. Prime contractors will no longer be permitted to simply flow down the NAICS code selected by the contracting officer for the prime contract.
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So Why Doesnt Everyone Have A Gsa Schedule
Securing a GSA Schedule Contract has quickly become one of the most sought-after distinctions in the United States. Yet, it is one of the most challenging things a business can try.
Even if everything goes perfectly, The GSA Contracting process will take 7-9 months. Most times, businesses will need a year or more.
Youll also be staring 500-700 pages of paperwork in the face, and without a Consultant that is there every step of the way, youll likely never complete it correctly.
The truth is, not every business qualifies for a GSA Schedule Contract. The process is complicated for a reason. The U.S Government is searching for the best of the best in every product or service they purchase.