Guest post by Jack Siney, co-founder of GovSpend
Federal government agencies are the biggest prospects for medical sales — from medical devices and technology to healthcare IT services as well as hospital and patient supplies. The opportunity to accelerate medical sales is huge for sales representatives. In 2018, federal agencies spent approximately $1.1 trillion on healthcare. So the question for healthcare and medical sales reps isn’t why should I try to sell to the government but how can I do it?
A few years ago, when the long, cumbersome (request for proposal) RFP process was the only way to secure a contract, smaller companies didn’t consider federal agencies worthwhile prospects. Even if you had the time required to complete the complicated forms in the first phase, sales reps would become overwhelmed by the government bureaucracy in the next phases of the process. But that has all changed.
Now only 20% of government business is awarded through the bid/RFP process which means 80% of the procurement is conducted in a variety of other ways. All of them require less paperwork on your end and less time on the agency procurement end. Here are six ways:
1. The Discretionary Spend
Based on the timing of your sales pitch and their decision-making — you could conceivably win this contract over just a couple of days. Most agencies have an established discretionary spending limit which can range from $1,000 up to tens of thousands for large agencies — which means they can spend up to that amount of money over-and-over without going out to bid or RFP. So if your product or service fits under the agency discretionary spending limit, procurement has the ability to make the purchase right away, like when a hospital needs bandages for example.
2. The P-Card
Purchase Card, or P-Card, transactions are credit card purchases made by agency personnel. Similar to the discretionary spend, it means if they need to buy your solution, they can move immediately to award the procurement to you versus needing additional bids. At most agencies, there is an array of staff who have authorized the use of a P-Card so if your cost is below the approved threshold, that government employee could purchase it today or tomorrow — immediately, without going out to bid.
There are numerous set-aside designations, including small business, woman-owned business, minority-owned business, etc. Each agency uses different designations, so you need to check with each agency to figure out if you’re a company qualifies for a specific set-aside. If procurement is “set-aside” for a woman-owned business, then only women-owned businesses can submit pricing to the agency.
4. Simplified Acquisition
There are a variety of commodity items that agencies are allowed to procure by simply obtaining three, or several, quotes. Once they receive the requisite number of quotes, they can buy that item immediately, so an agency will release a “Request for Quote”, and then will award within just a week or two.
5. The Sole Source
If your company has a very exclusive one-of-a-kind product or special feature not available elsewhere, your company can apply for a sole source designation from an agency where they would not have to go out to bid an RFP because there would be no other companies qualified to do the work. Patented items, new technologies, and innovative products typically fall into this classification.
6. Piggy Backing
If your company has already been through the RFP process and won the contract, there is a way you can use that success for another procurement vehicle called Piggy-Backing. Other agencies can often “piggy-back” off of this contract — adding additional quantities to the original award. This requires communication and relationship-building with procurement in other agencies to make them aware of your piggy-back status.
Medical and healthcare industry sales reps have unlimited selling potential with the federal government. Take the time to do your homework on past spending, agency focus, and which procurement departments utilize non-RFP buying initiatives to accelerate sales of your healthcare and medical products and services in 2020.
Jack Siney is co-founder of GovSpend which maintains the only database of purchase order records for federal, state, and local agencies. He is the nation’s leading expert on selling to the government — completing over $1.5 billion in government sales. With over 25 years of working in the public sector, he is highly sought after as a sales consultant and speaker by organizations focused on winning government business. He can be reached by email at JSiney@GovSpend.com.