A Small Company Perspective on Successful Government Contracting

1
A Small Company Perspective on Successful
Government Contracting

• Todd Jochem
• September 28th, 2005

2
Outline

• Applied Perception Background
• How we got into government contracting
• The Small Business Innovative Research Program
• Lessons Learned

3
How it began

• December 2000 / January 2001
• Teamed with SAIC and JPL on DARPA PerceptOR
  program
• Subcontractor to SAIC who was the Prime
• Other Transactions Agreement between SAIC and
  DARPA can be very similar to commercial
  contracts w.r.t. costs, reporting, etc. We had
  very few, if any FAR flowdowns.
• Milestone-based, fixed fee payments

4
SBIRs

• Each participating government agency with an
  extramural RD budget of at least 100M must
  reserve 2.5 of its extramural RD budget for
  competitively selected SBIR awards to small
  businesses.
• Three Phase Program
• Solicitations accepted 3-4 times per year by DoD.
  Once or twice for other non-DoD agencies

5
DoD SBIR Funding

• 2 winners per topic in Phase 1, 1 in 8 proposals
  selected
• 1 winner per topic in Phase 2, 1 in 2 proposals
  selected

6
Process

• Phase 1 Competitive within topic
• 70k, 6-7 month duration
• Phase 2 Competitive within topic and DoD wide
• Phase 1 Option, 2-3 months, 50k
• Phase 2 Base, 12-24 months, 730k
• Phase 2 Plus Non-competitive (as far as I can
  tell)
• Need to find non-SBIR matching funds (which can
  be sole-sourced to you)
• Must be real funding (cash) not funny money
  match
• One-to-One match up to 500k
• http//www.aro.army.mil/arowash/rt/sbir/sbir_phase
  ii.htm
• Total funding available on basic Phase II Plus
  Program
• Phase 1 Phase 1 Option Phase 2 Phase 2
  Option w/match 1,850,000

7
Maximizing SBIRs

• Contract Modifications
• Your SBIR is a contract vehicle, just like any
  other one (except better for you)
• As long as the scope is close to your Phase II
  scope, contract modifications can be sole
  sourced to you
• Excellent way to capture year end funding
• Need good relationship with PM to make this
  happen
• Phase 3
• Any government agency can sole-source you for a
  Phase 3 program
• Must include something you did during Phase 2
• In our experience, doesnt need to be production
  program
• Government must allow you to preserve all IP
  rights
• Ive heard you can sell your Phase 3 contract to
  large company w/o sole-source ability preserved

8
Our Experiences

• Past Proposals
• 9 Submitted
• 3 Rejected
• 2 Winners
• One in Phase 2 Soldier Universal Robot
  Controller
• One in Phase 3 Robotic Patient Rescue largest
  solely DoD funded Phase 2 SBIR ever
• 4 Pending Phase 1 applications
• 3 Prime, one Sub

9
SBIR How Tos

• How to win Phase 1
• Look for sure things
• Look for topics where you can over-deliver
• Point out past successes (prior SBIR or other
  agency wins)
• Write a good proposal
• No when to partner, and when not to
• How to win Phase 2
• Do a good job in Phase 1 - get the PM to trust
  that you can execute larger program.
• Get to know the PM and what he and his team wants
  it may not be exactly what you think they want
  or what you want.
• It is important for you to make your PM look
  good.

10
General Ramblings 1

• Dont be afraid of the Government
• Understand the rules
• Accounting, IP, Contracting, Property
  Administration
• Get professional help when needed - for content
  provided and professionalism
• Generally speaking, government administrators
  (DCAA, DCMA, COs) are helpful, reasonable, and
  knowledgeable use them
• Negotiating with the government is like playing
  blackjack in Vegas.
• Government has to play by the rules (unlike
  commercial contractors)
• Sometimes the rules allow discretion on the part
  of the CO
• Government will allow you the things you are
  entitled too but, you may have to ask
• Government wont allow lots of other stuff,
  sometimes for reasons that are unexplainable my
  advice Move on.
• Document Everything!!!
• Cost proposal version, IP, contract versions, all
  emails, etc.

11
General Ramblings 2

• Select good partners / how to partner with larger
  companies
• Strive to always be the Prime, but know when you
  cant
• If you are the Prime, pick partners based on
  technical and non-technical reasons
• If you arent the Prime, understand the value
  that you bring to the Prime technical,
  administrative, political
• Understand that you can say No to large Tier 1
  DoD contractors if they want you on their team -
  but understand the consequences both now and in
  the future
• Be loyal and straightforward with all partners
  including telling them no