Opening doors to international business opportunities can work well for businesses who are currently involved in federal government contracting. The complications involved in selling products or services internationally can be lessened if the business person can leverage current relationships to help open the doors to world-wide business opportunities with customers who know and trust the vendor.
While a business person may take many paths to the international market, if you are currently involved in or pursuing federal contracts in the “Continental United States” (CONUS), let’s take a look at how you can leverage the existing relationships you are developing in this market to help open doors to international opportunities, known in the federal market as “Other than the Continental United States” or OCONUS.
Being a federal contractor has distinct advantages for businesses looking to enter the international market: a ready-made market with both federal civilian agencies and the Department of Defense, an active referral base with current federal customers, and an experienced group of potential prime contractors and teaming partners.
In a recent report to the Small Business Administration, Chad Moutray of the SBA’s Office of Advocacy stated that “…239,287 small businesses are known to have been involved in the export business in 2006, the most recent year that data by firm size was reported by the U.S.
Census Bureau. These companies constituted 97.3 percent of all known exporters, and they engaged in $260 billion in known export transactions-28.9 percent of the total.”
These figures can be heartening to small business owners who want to enter the world of international business. But if you are less than enthused about learning new policies, procedures and languages, a savvy business person may possibly reduce the learning curve and market entry timeline by leveraging existing relationships with current federal customers, current prime contractor and existing teaming partners in the federal contracting market.
International Business: You as a Prime Contractor
Many federal agencies offer international business opportunities including the U.S. Department of Commerce, the U.S. Department of Agriculture (USDA), the U. S. Agency for International Development (USAID), the U.S. Department of State, and of course, the Department of Defense.
A quick keyword search of “OCONUS” (meaning “other than the continental United States”) in the federal government’s online bidding system, FedBizOpps (www.fbo.gov) lists more than 270 bidding opportunities including everything from a wide range of products to services such as administrative assistance, IT consulting, video recording, training and engineering. Values of these opportunities range from $25,000 to hundreds of millions of dollars, all with a client that is bound by law to pay their bills: the U.S. Federal Government.
Many of these opportunities are also in the “Sources Sought” process where the contracting officers are actively performing market research to identify small businesses that are capable of providing the specific product and serves required. Why would this be an advantage to you if you are a small business owner? You may think of it as reducing the numbers of competitors. How? A recent check of the Central Contractor Registry (CCR) where all government contractors must register, showed that out of 596,239 active large and small business registrants, only 11,126 small businesses are listed as exporters of products or services. This is a much smaller competitor pool than the 239,287 small exporting businesses mentioned earlier.
When you also take into account that only a small portion of those businesses listed in CCR will see and be interested in the same international opportunity that you want to pursue, the pool becomes much smaller; in some cases, just a handful of businesses will participate in the full bidding process.
Because each opportunity listed in FedBizOpps has an “Interested Party” registration capability, you can register your firm and also check to see the registered firms and contact them to build relationships and possible teaming or subcontracting opportunities.
Your Firm as an International Business Subcontractor
Because the international opportunities with the federal government can be massive and very complex, your best chance of participating may be as a subcontractor instead of a prime contractor.
The prime contractor bears a huge burden in being 100% responsible for every aspect of the contract, from the “back-office” issues involving legal, human resource and accounting, as well as the services and products comprising the entire Statement of Work. In a multi-million dollar contract, this can be overwhelming to a small business, especially one that is inexperienced in the international market.
Instead of tackling the entire contract, a small business person may find the opportunity as a subcontractor much more viable, where he is responsible for just his “slice” of the work, leaving the rest of the burden to the prime contractor. This strategy also gives the small business the opportunity to learn the processes and procedures involved in producing international work, and will build the past performance necessary to help win future contracts. Prime contractors are also required to meet small business subcontracting goals with all federal contracts, including international work, thereby opening doors to you as a potential subcontractor.
Your Firm as an International Business Teaming Partner
The “Source Sought” process mentioned earlier is a market research process that the government uses to determine if there are capable small businesses available and interested in performing the work. If two or more capable small businesses respond, then the contracting officer will “set-aside” the contract for small business where a small business must be the prime, or in the case of a team, the team lead.
These opportunities may be multi-million dollar opportunities that would be virtually impossible for one small business to perform alone. The business person may be unable to financially support the up-front costs involved in performing the contract before the payments begin, or she may not have the entire range of expertise needed in her existing staff structure. In these cases, the small business may team up with other small or large businesses to win and perform the contract.
The teaming process is widely accepted in the federal government market, and many small businesses have used this strategy to pursue and win contracts that help catapult them into the international marketplace.
You now have additional options in breaking into or becoming more successful in the international market if you are involved in government contracting. If this is an attractive strategy for you in growing your business, check the agencies and resources noted here for assistance.
Federal Agencies Offering International Trade Assistance
U.S. Department of Commerce
A “must” starting point for international trade information and statistics.
U.S. Department of Agriculture
The USDA operates a wide range of national and international programs dealing with food and food safety, farming, regulatory programs and natural resources.
U.S. Department of State
DOS purchases in excess of $2 billion annually in goods and services to support its global mission of creating a more secure, democratic, and prosperous world for the benefit of the American people and the international community.
U.S. Department of Treasury/Office of Foreign Assets Control
The Office of Foreign Assets Control administers and enforces economic and trade sanctions based on U.S. foreign policy and national security goals.
U.S. Customs and Border Protection
CBP is one of the Department of Homeland Security’s largest and most complex components, with a priority mission of keeping terrorists and their weapons out of the U.S. It also has a responsibility for securing and facilitating trade and travel while enforcing hundreds of U.S. regulations, including immigration and drug laws
International Trade Administration
The ITA works to improve the global business environment and helps U.S. organization compete at home and abroad.
U.S. Trade and Development Agency
The USTDA assists U.S. companies pursue overseas business opportunities.
Trade Compliance Center
The TCC is your one-stop shop for getting U.S. government assistance in resolving the trade barriers or unfair situations you encounter in foreign markets.
United States International Trade Commission
The USITC is an independent federal agency that provides objective trade expertise to both the legislative and executive branches of government, determines the impact of imports on U.S. industries, and directs actions against certain unfair trade practices, such as patent, trademark, and copyright infringement.
Overseas Private Investment Corporation
The OPIC is an independent U.S. Government agency that sells investment services to assist U.S. companies investing in some 140 emerging economies around the world.
United States Trade Representative
The USTR is responsible for developing and coordinating U.S. international trade and commodity and trade-related investment policy.
U.S. Patent Office: International Intellectual Property
The USPTO is for those who wish to seek protection for their intellectual property beyond the borders of the United States of America.
Export-Import Bank of the United States
The ExIm Bank helps finance the export of U.S. goods and services to international markets.