In addition to the projected $186 billion U.S. public IT market for 2010, the American Recovery and Reinvestment Act is expected to generate $28 billion in government IT spending. This substantial spending creates significant growth opportunities for VARs that understand the unique demands of working with U.S. government organizations and the broad range of technology solutions they require.
Resellers should develop long-term strategies to address the multi-billion dollar annual public sector IT spend, as well as short-term strategies to take advantage of opportunities created by the stimulus package. These approaches should be founded in traditional business development best practices and take into consideration the unique aspects of federal, state/local and education government procurement requirements.
1.) Dig in for the long haul. While the economic stimulus package has sparked considerable interest in government market opportunities, it is critical that VARs approach the market based on a long-term strategic plan. Targeting the government market requires significant investment and expertise that takes years to develop. Additionally, IT-related government market opportunities are highly competitive and take an average of 6 - 12 months to close.
2.) Become a bloodhound. Unlike the private sector, information regarding government market spending is publically available because it is based on citizens' tax dollars. The most successful government VARs track publically available information to get in on the ground floor by developing strategic plans for approaching opportunities. VARs can turn to research companies to easily track bid information, such as Federal Sources, Inc., Center for Digital Government and Carroll's Publishing. These research firms provide information at the federal, state and local government and education market levels about the agencies and institutions that will be looking for technology solutions, the contact for the bid, what types of solutions are needed, as well as the time frame, and how to become engaged in the process. VARs may be able to access these research sources through their distributor. For example, Avnet provides these services to qualified partners through its Government Contract Watch program.
3.) Follow the money. It is critical to understand what type of funding government agencies will use to purchase IT solutions. The funding may have specific requirements and/or limitations that will play a significant role in the scope of the solution and deployment timing. While VARs can play a role in helping government agencies with grants and securing funding, they need to recognize that the project will still be competitively bid.
4.) Enter the gateway. Contract vehicles (such as WSCA, GSA schedules and other IDIQs) are essentially the "access pass" for the government market, since all government purchases are made through some type of contract vehicle. VARs need to determine which vehicles they want to register for based on the type of government business they will be pursuing (federal, state, local or education) or if they should partner with another company that already has access to these vehicles. Because of the complexity of contract vehicles, most VARs have dedicated team members who specialize in the government procurement process.
5.) Look to solutions. Under the Most Favored Nation clause, the company that provides the best price that meets a government agency's needs is favored to win the contract. However, having a relationship with the agency and a proven track record of quality performance will allow the agency to also evaluate the bid in terms of best value as well as price. One way to demonstrate greater value is by recommending bundled, integrated solutions with multiple types of hardware, software and services. A solutions-driven approach also helps VARs maximize the opportunity for winning because it is less likely that a competitor will provide the exact same solution, making it difficult to do an apples-to-apples comparison on price. Areas such as business continuity, disaster recovery, security, storage and virtualization are prime candidates for this approach.
6.) Pick your team. The government looks favorably on teaming when evaluating bids. VARs can join forces to expand their geographic reach or bolster specialty areas. Additionally, a percentage of each government contract is awarded to small businesses or companies that fall within specific socio-economic categories, such as woman- or minority-owned businesses. Small businesses or VARs that qualify for one of the socio-economic categories can enter into mentor/protége relationships with larger VARs or systems integrators.
7.) Repeat, repeat, repeat. While each government agency is unique, there are commonalities among them, and they often have similar pain points. Once a VAR has successfully developed and implemented a solution for a government agency, it can turn to other similar organizations and leverage its existing knowledge base for new bids.
While pursuing opportunities in the U.S. government market is a complex process, it is also extremely rewarding and can provide VARs with long-term growth opportunities. To reap these rewards, resellers must have "skin in the game," do their due diligence, approach opportunities strategically, leverage their core strengths and know when to ask for help.
 Source: Center for Digital Government
 Source: Forrester Research
Mike AtLee leads Avnet Technology Solutions, Americas' government practice -- Avnet GovPath -- where he is responsible for helping VARs and suppliers accelerate their success in the government market. AtLee is an industry veteran with more than 35 years of government and IT industry experience. Previously, he has held leadership positions with both resellers and suppliers, helping them to build their government market channels.