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Expedited Sales to U.S. Federal & StateExpedited Sales to U.S. Federal & StateExpedited Sales to U.S. Federal & State Expedited Sales to U.S. Federal & State Governments for Israeli CompaniesGovernments for Israeli Companies
September 10, 2013September 10, 2013
Presented by:Presented by:Albert B. Krachman, Esq.Blank Rome LLP600 N H hi A NW
Brian R. DunnThe Winvale Group1012 14th Street NW 5th Floor600 New Hampshire Ave, NW
Washington, D.C. 20037Tel: [email protected]
1012 14th Street NW, 5th FloorWashington, D.C. 20005Tel: [email protected]
36275854
Agendag
Understanding the U.S. Government Market
Identifying Government Needs
Marketing & Business Development BasicsMarketing & Business Development Basics
Accessing Contract Vehicles & Teaming Partners
Legal Compliance
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Understanding thethe
U.S. Government Market
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Potential of U.S. Government Markets The U.S. federal government is the largest consumer in the world and the largest employer in the world.g p y
Federal Budget for Fiscal Year 2014 is $3.8T.
C ll i l h 50 S d W hi D C i f h Collectively, the 50 States and Washington D.C. is one of the largest consumer markets in the world.
Fiscal Year 2012 spending was $3 2T Fiscal Year 2012 spending was $3.2T.
State governments: $1.5T. Local governments: $1.7T.
Virginia state $72B Virginia local $36 7B Virginia state: $72B. Virginia local: $36.7B.
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Federal Budget for Fiscal Year 2014
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Federal Budget for Fiscal Year 2014
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U.S. Defense Spending
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Understanding the U S Government MarketU.S. Government Market
Relationship Business
The Government does business with vendors they know, like, and trust
Direct vs. Indirect Sales
Need + Funding + Company withMAS/IDIQ Contract Need + Funding + Company with MAS/IDIQ Contract + Relationship = Shortest Time to Sale
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Identifying Government Needs
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Identifying Government Needsy g
Database ResearchDatabase Research Fedbizopps, Deltek, Bloomberg Government
I t l f I t t / P i Intel from Integrators / Primes
Industry Days, “Boots on the Ground” Meetings
Target Contract Vehicles
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New Housekeeping Slide re Q/AI sent a really good grant proposal to the p g
grant proposal to the Homeland Security Department!
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Marketing &&
Business Development Basics
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Know Your Customer Federalize your company brand and website
Understand Agency missions and needsg y
Identify early stages opportunities
Must access relationship holders!Must access relationship holders!
Most opportunities need technology
M h l i i h f biliMost technology opportunities have a focus on mobility, cloud, and cybersecurity
R l f t t i il Rules for states are similar
What is a GSA Schedule? The General Services Administration (“GSA”) has created the Multiple Award Schedule for the federal government and other q alified entities to p rchase prod ct andand other qualified entities to purchase product and services.GSA contracts offer government customers direct deliveryGSA contracts offer government customers direct delivery of high‐quality commercial supplies and services at discount pricing.
b l Contracts can be up to 20 years long. GSA MAS contracts are indefinite delivery, indefinite quantity (“IDIQ”) contracts, which do not have a sales limit q y ( )or ceiling.
Why Use a GSA Schedule?yBest price for customers:
GSA has already negotiated fair and reasonable pricing, so government buyers can benefit from shorter lead‐times, lower administrative costs, reduced inventories, and compliance with environmental, socioeconomic laws, and procurement regulations.
Quickest way to order:
The contracting officer can order directly from a GSA contact holder and d t d t k it bli D di th d ll th t tidoes not need to make it public. Depending on the dollars, the contracting officer must research or solicit 3‐5 other GSA contract holders.
By placing an order against a GSA Schedule contract, the government buyer has concluded that the order represents the “best value.”
Why Use a GSA Schedule?
39 different GSA Schedules
GSA Schedule Sales for FY 2012 = $37 469 603 822 GSA Schedule Sales for FY 2012 = $37,469,603,822
Current # of GSA contractors = 22,031
Average Sales per GSA contractor = $1,700,767
A recent study showed it takes a federal buyer an average f d d d h d l hof 15 days to issue an order under a GSA Schedule. This
compares to an average of 268 days for a non‐GSA Open Market contract.Market contract.
Two Options for a GSA Contract1) Hold your own GSA Schedule Contract:
Can take 5‐12 months to get contract awarded
Responsible for contract administration and compliance
Pricing is based on a Most Favored Customer relationship
Best choice for professional services Best choice for professional services
2) Use a Reseller’s GSA Schedule Contract: Can take 1‐2 months to get approved “on contract”Can take 1 2 months to get approved on contract
Reseller is responsible for contract administration and compliance
Mark‐up or margin on contract transactions
Best choice for products
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Virginia is “An Exceptional Government Sales Base”Government Sales Base
One of the top government contracting venues in the U.S. and combined States buy more than the Fed Government
At Will state
Highly educated work force
A vibrant and supportive Virginia business communityA vibrant and supportive Virginia business community
VIAB: The Virginia Israel Advisory Board
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VIAB Assists International Companies with
VIAB Assists International Companies withwith
$ Incentives Connections Guidancewith
$ Incentives Connections Guidance
Accessing Contract Vehicles &&
Teaming Partners
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Accessing Contract Vehicles & Teaming PartnersTeaming Partners
What Contractors Hold the Vehicles You Need?What Contractors Hold the Vehicles You Need? VA T4, STARS, etc…
H C Y Fi H l Th Wi N W k? How Can Your Firm Help Them Win New Work?
Solution Matching and Research
Target Small Business Subcontracting Plan Administrators
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Legal ComplianceLegal Compliance
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A Responsible Government ContractorT b d t i d “ ibl ” ti t t tTo be determined “responsible”, a prospective contractor must—
(a) have adequate financial resources to perform the contract, or the ability to obtain them;
(b) be able to comply with the delivery or performance schedule, taking into consideration all existing business commitments;
(c) have a satisfactory performance record;(c) have a satisfactory performance record;
(d) have a satisfactory record of integrity and business ethics;
(e) have the necessary organization, experience, accounting and operational controls, and technical skills, or the ability to obtain them;
(f) have the necessary production, construction, and technical equipment and facilities, or the ability to obtain them; and
(g) be otherwise qualified and eligible to receive an award under applicable laws and regulations.
U.S. Trade Agreements Act Products under GSA schedules are typically subject to the Trade Agreements Act (“TAA”). Under the TAA, the U.S. Government may
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purchase products only if those products are wholly the growth, product, or manufacture of the United States or another “designated country,” or have been “substantially transformed” in the United States or another “designated country.”
Israel is currently a “designated country” under the TAA, which means that Israeli products meet TAA requirements for sale on GSAmeans that Israeli products meet TAA requirements for sale on GSA schedules. However, several countries are not “designated countries,” such as China, India, Malaysia, Russia, and Thailand.
Small Business Rules Some awards on GSA contracts are “set aside” for U.S. small businesses. This means
that only a U.S. small business that has certified its size status can receive award.
The SBA typically defines a “U S small business" either in terms of the average The SBA typically defines a U.S. small business either in terms of the average number of employees over the past 12 months, or average annual receipts over the past three years. Additionally, a “U.S. small business” must:
be organized for profit and have a place of business in the US; be organized for profit and have a place of business in the US;
make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials, or labor;
b i d d tl d d t d d be independently owned and operated; and
not be dominant in its field on a national basis.
There are opportunities for Israeli companies to participate in small business awards if structured correctly.
Areas of Focus for Israeli BusinessesAreas of Focus for Israeli Businesses
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Israel’s Current Sales to the U.S. Israeli systems secure a significant and growing proportion of U.S. telecommunication, financial transactions, utility, and other essential , , y,computer‐related dependent operations. Each year, Israel sells the U.S. military about $1.5B in advanced items from specialized munitions to life saving armor and sensorsitems, from specialized munitions to life‐saving armor and sensors for intelligence, surveillance, and reconnaissance. U.S. and Israeli manufacturers are now partnering to sell Israeli
k d l h d’ l drockets and missile interceptors, such as David’s Sling and Arrow, to U.S. allies. Israel is a top innovator in the technologies of modern warfare—p gcyber, unmanned vehicles, robotics, missile defense—and will remain an important source of innovation for American defense contractors and troops.p
Sequestration Effects Spending on Israel
Most current spending is in the form of military assistance, a portion of which can be used to procure from Israeli defense companies
Spending on Israel
which can be used to procure from Israeli defense companies.
Currently, spending averages roughly $3B per year, of which approximately 26% (or $780M) may be spent on Israeli manufactured equipment.
U.S. policy aims to create a strong domestic defense industry in Israel.
Has succeeded, and Israel’s defense industry exports are roughly 75% of its output (worth $12 9B) including large amounts of equipment to the U Soutput (worth $12.9B), including large amounts of equipment to the U.S.
Due to U.S. budget cuts, aid to Israel may be sequestered up to an estimated $155M, excluding the application of an across‐the‐board rescission.
Sequestration Effects Spending on Israel ( t’d)
Israel and the U.S. also partner on the development of several
Spending on Israel (cont’d)
missile defense systems—including the Iron Dome, David’s Sling, Arrow II, and Arrow III—worth approximately $479.7M in 2013. This funding may also be subject to $37.41M in sequestration, excluding the application of a rescission.ddi i l f d il bl h h f Additional funds are available through Department of Energy
grants ($2M in 2012), and USAID Grants ($3M in 2012). More competition for fewer dollars.p
QuestionsQuestions
Albert B. Krachman, Esq.Blank Rome LLP
600 New Hampshire Ave, NWWashington, D.C. 20037T l 202 772 5812
Brian R. Dunn
Tel: [email protected]
The Winvale Group
1012 14th Street NW, 5th FloorWashington, D.C. 20005T l 202 296 3542Tel: [email protected]
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Mr. Krachman has 30 years of experience providing legal counsel to companies that conduct business with, or d i t d b i ith t ll t f
Albert B. Krachman, Esq.desire to do business with, governments on all aspects of government contracting and government grants. He counsels on winning government contracts and grants, solicitation and proposal issues, and strategies to increase contract profitability. Mr. Krachman counsels on a broad range of compliance and enforcement issues
, qBlank Rome LLP600 New Hampshire Ave, NWWashington, D.C. 20037Tel: [email protected]
a broad range of compliance and enforcement issues arising from mergers and acquisitions of government
contractors, including organizational conflicts of interests, problems under the Small Business Act, international contracting, and security clearance matters. Mr. Krachman’s litigation practice covers internal investigations, defenses of suspensions, debarments or other ethics investigations, whistleblower, contract fraud and False Claims Act litigation as well as contract disputes service and supply contracts constructionfraud and False Claims Act litigation, as well as contract disputes, service and supply contracts, construction contracting claims, equitable adjustments, terminations, and the like.
Mr. Krachman's government practice spans the civilian and defense agencies and the key vertical sectors within those agencies, such as contracting for energy supplies and services, telecommunications, information technology, IT and guard security services, construction, and health care services and supplies. From a gy g y ppfinancial assistance perspective, he advises on federal grant compliance, the SBIR program, defense of grant audits and government repayment claims under grants, and non-procurement debarments and suspensions. He also advises on GSA Schedule and Homeland Security contracting. Mr. Krachman has authored various articles on a wide span of subjects, including Small Business Certification Fraud, Information Security, and Military Utility Privatization. He is the co-author of the Homeland Security Law Handbook, and has served as a
t ib ti dit l bli ti i l di P i i f Cl i C d M t i l F d l L bcontributing editor on several publications, including Pricing of Claims, Cases and Materials on Federal Labor Standards, and Contracting for Services.
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Brian R. DunnThe Winvale Group1012 14th Street NW, 5th Floor
Mr. Dunn is a Founding Partner of Winvale and oversees all professional services and client engagements, among them GSA Schedule offers, government audits, corporate training, capture
t d l t t U d M,Washington, DC 20005Tel: [email protected]
management, and sales strategy. Under Mr. Dunn’s direction, Winvale has helped thousands of companies of all sizes and industries maximize business opportunities in the government market.
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