In our previous post, we reported on objective data and provided insights from those companies who both succeeded and struggled after graduation. In this post, we examine the best practices and lessons learned from contractors who have navigated the struggles of life after 8(a) graduation. Learn more by downloading the free eBook, 8(a) Exit and Transition Guide.
While no prerequisite knowledge is required, we certainly encourage you to read our previous post, Common 8(a) Graduation Mistakes, before continuing with this post.
Procrastination was a common theme found in the data and the commentary provided by the contractors that we interviewed. Ignoring an impending graduation, whether deliberate or unintentional, resulted in pipelines, revenues, and employees that failed to adapt to a new environment. Experiencing adversity often led to reactionary and disorganized decisions that further complicated a problematic situation.
Start Taking Swings Now:"I didn't care about winning; I cared about learning." This comment came from an executive at a contractor with sustained year-over-year growth years after graduating from 8 (a). Her philosophy was all about winning 8(a) work while it was still an option while putting her team through the exercise of competing for full and open. "Get the experience, and the debriefs, learn how your soon-to-be competitors compete and how your customers act once you're not in an 8(a) bid."
Blend it Early:"I got involved, I checked the pipeline, I wanted as much full and open as 8(a) work." A former CEO of an 8(a) firm told us. "We have three years left as an 8(a) I want recompetes I can win, not work I am guaranteed to lose." An aggressive vision and disciplined approached to future realities has led to a company that continues to produce significant year-over-year gains. It is critical to blend your pipeline and contract mix towards full and open far before you graduate.
Don't Get Left Out:"We thought our subs would simply flip for us, we found out quickly that wasn't the case." An executive of a 2013 8(a) graduate told us. "We didn't develop the relationships and position a replacement. We just expected it to play out favorable for us, we failed to control the situation. Our bravado led to all kinds of lost revenue." Since the 2013 graduation, this executive took on a CEO role at a recent graduate where succession plans were required. "For every contract, we identified the right company to run prime, where we felt in control."
Never Rely on a Hail Mary:"There were dozens of 8(a) contractors providing the same service, we certainly tried, but never expected we'd change their minds." A now-retired CEO told us about their attempts to hold on to their work. "We talked to our customers early on, and used STARS to reach out to more favorable customers." Rather than just accepting the situation, he found customers where his services were competed full and open and leveraged his contract vehicle and 8(a) status to create past performance and relationships leading to sustainable post 8(a) revenues.
Never React:"I refused to find our company reacting; I wanted to dictate the change." A former CEO of a small business turned consultant told us. "I watched our pipeline go crazy, nothing made any sense, and I knew it was a recipe for disaster." She told us, recounting her struggles to salvage revenue after graduation. "Everything was great, til it wasn't, we lost our identity and our focus." Though she was able to pull out of a devastating stall following graduation, she admitted that the lack of preparation left them searching for where and how to bid. "I just waited too long to set a new direction and expectations, and I just assumed we were all on the same page."
Pick the Right Past Performance:"I didn't want anything in the pipeline that didn't build a path forward. We lost out on opportunities, but what is that worth when you can't recompete it?" An executive told us about his pipeline three years out from graduation. "How often do they recertify, will they buy from us when we aren't an 8(a)?" He was adamant about future and near-term growth. "We worked our three vehicles to get in front of the right clients for tomorrow, not for today." His company's success is a testament to the value of acknowledging that an 8(a) status is a passing advantage.
When talking to those who met or learned from the challenge of an 8(a) graduation, it all came down to preparation. One of the common themes came down to getting your workforce and company experience operating in a new environment. You simply cannot suddenly transition into competitions against mature companies and expect to win. Perhaps the most critical takeaway we heard, whether fueled by success or regret, the pipeline needs to reflect the future, depending on revenues you're guaranteed to lose, does nothing but exacerbate an already challenging transition.
Is your company prepared for the shifting landscape within Federal IT procurement? For nearly twenty years, GSA Schedules and agency-IDIQs paved the way for the evolution of second-tier competitions. In 2019, GWACs outpaced IDIQs, for the first time, to become the Government's preferred pathway. Every Federal customer interacts with GWACs, and these vehicles continue to lure in new adopters. From the broad range of services to the number of contractors vying for work, the loyalty to IDIQs is waning as customers begin their march towards GWACs. For many, this statement makes sense; however, getting on a GWAC, let alone finding success, creates a challenge unique to these types of vehicles. It isn't enough to know POLARIS, CIO-SP4, and 8(a) STARS III; a clear vision and strategy are critical to determining the right team, surviving the scorecard, and moving into post-award with a proactive plan to capture business, rather than hopelessly reacting.
written by Jim Sherwood, published 03/09/2021
Revenue growth is the primary focus of every small business, but in a market as complex and fluid as the federal contracting market, growth can often stall due to the lack of the right resources. And when effectively managing expenditures puts the right resources out of reach, small businesses often get caught in a growth Catch-22.
written by Jim Sherwood, published 01/25/2021
Huntsville, Alabama, has long represented a tantalizing market that always felt out of reach for many contractors. Over the last decade, this zip code has been a focal point of growing interest as it became home for many organizations that, on an annual basis, manage billions in contract spending. Based on the latest news, Huntsville's influence over the aviation, space, and missile enterprise will grow significantly in 2021.
written by Jim Sherwood, published 01/15/2021