Building your Capability Statement and Government Business

More and more companies are trying to build their businesses by going after federal, state, and local government contracts.  This is a great way to build on an existing business if you are able to do the following:

  1. You need to carry the first contract expense within your present cash flow situation.
  2. To need to understand what you are bidding on and for.
  3. You need a easy to read and use Capability Statement.

Let’s examine these in the order presented.  When you first start doing business with any level of government you need to understand that it will take a while for you to get paid.  You have to be incorporated into their payment system, the invoice needs to be approved by the contract administrator, and either a check needs to be produced for you or the electronic billing system needs to confirm your business bank account.  This is the same for every level of government.  Once you have successfully navigated this slow moving river of red tape you should start getting paid regularly.

While you may believe you understand what a specific contract is actually looking for in the bidding process there could be a nasty surprise waiting for you.  I had a client who bid on uniforms for the US Army and she won the contract.  Based on the amount of the award she bought raw material for inventory, hired new employees, purchased new equipment for producing the uniforms, and went to work.  However, the contacting office did not buy all of the contract uniforms at once (which is a common practice).  The business owner made the required uniforms, sent them in for acceptance, and waited for payment.  The actual payment for the uniforms did not arrive for 6 months as the logistics agencies involved did a quality control check on the submitted uniforms, actually placed them with the procurement system, and then actually allocated them against a purchase order from within the Department of Defense.  Meanwhile, the new employees wanted to be paid, the cloth manufacturer wanted to be paid, and the equipment manufacturer wanted to be paid.  The business owner could not do this and had to declare bankruptcy.  Start with a small contract that you can do and build into larger procurements.

Finally, how do you get introduced to government opportunities?  Every level of government starts with the same position – your capability statement.  Every capability statement should be built with this in mind:

  1. It needs to be brief.  1 or 2 pages max.
  2. It needs to be visually interesting.  Make sure your company logo, contact information, and products or services are readily identifiable.
  3. It needs to be a searchable document that can easily be changed into and sent as a PDF file.

Your capability statement is not a sales tool nor should it be a data dump of your company.  It is designed to do one thing and one thing only – get your foot into the door of the business, government entity, or possible business partner.  It should contain the following at a minimum:

  1. Contact information. Include physical address, contact person details, office telephone, office fax, email address, etc.
  2. Core competencies. Introduce the company’s core competencies and relate those to the customers’ specific needs.
  3. Similar work. Describe similar work you have performed for past customers.
  4. Relevant codes. List DUNS, CAGE, NAICS, NIGP, or other codes as requested by the company or government entity.
  5. Certifications.  Any certifications the company has obtained.

Not everyone understands what the capability statement should contain and how it should be crafted.  ASBC has worked with many businesses to get them ready for government business by developing quality capability statements.  If you need this type of help with your business please send an email to [email protected].

You can also see an example capability statement at the following URL on the ASBC web site by clicking here.


Speak Your Mind


This site uses Akismet to reduce spam. Learn how your comment data is processed.