Many obstacles stand ready to impede success in government contracting. While knowledge is key to surmounting most of them, a basic process for collection and application of targeted information to develop knowledge still proves evasive to a large part of the government contracting community. One obstacle on which I’ve advised small and large companies for years is understanding the relevance and meaning of classification codes used by agencies. This article provides a snapshot of ‘code’ usage for Fiscal Year 2016.
– Guy Timberlake, The Chief Visionary
If you find yourself coming up short in the area of meaningful results in trying to identify contract and subcontract opportunities, you may have a knowledge problem. If you recognize that your cost of acquiring business (we call it C.A.B. Fare) is too high, you may have a knowledge problem. And if the time it takes for you to find and qualify suspects, prospects and leads has you lagging behind your known (and unknown) competitors, then again, you may have a knowledge problem.
What’s driving this is very likely the fact you don’t know what you don’t know and that will most definitely hinder your efforts to move forward, similar to a boat still tied to the dock as it tries to get underway. It’s not insurmountable, but definitely still problematic. For example, if you are not aware of the function of NAICS Codes when used in purchasing activities by federal agencies, or the existence and function of Product Service Codes in the same scenario, it’s pretty much guaranteed you’re working too hard and spending too much to arrive at the same place as some of your competition. Additionally, it’s a pretty sure bet you are not close seeing all of the viable opportunities relevant to your offering, and you’re probably seeing a lot of information about requirement of little to no interest too.
The issue is knowledge-in-context. You see information every day, multiple times a day, but it doesn’t resonate because you’ve not developed the knowledge to understand if and why some or much of the information you see would be important, or not.
This is one of the reasons I developed our ‘What You Don’t Know Can Hurt You!‘ topics in B2G Essentials. For the past few years I have been facilitating these seminars, webinars and private training around the country to help companies increase the efficiency of their marketing, business development and capture activities, and seeing great results. Clicking on the graphic below will take you to a self-paced version of one of the sessions, available for purchase in our education portal.
But let’s talk about codes for a bit. For the recently concluded Fiscal Year 2016, federal agencies, boards and commissions referenced NAICS Codes and Product Service Codes on nearly every obligated dollar. To be precise, they referenced 1,203 NAICS Codes and 2,773 Product Service Codes. Earlier this year, I penned a piece that looked at the number of Product and Service Codes used in buys referenced with one of the following 4 NAICS Codes:
- 541511 – Custom Computer Programming Services
- 541512 – Computer Systems Design Services
- 541513 – Computer Facilities Management Services
- 541519 – Other Computer Related Services
The number of PSC Codes at that time was 542 based on $30B in obligations. That total spend is now $39B and the number of PSC Codes is 676. The point I’ve made many times is that many product companies ignore these NAICS Codes because they cite services in the description. Additionally, companies not providing Information Technology Services ignore them because they assume what is being purchased is strictly Information Technology-specific services, which is not the case. On the other hand, companies claiming these NAICS Codes as some of their own, are put off a bit when they see what’s being purchased under their NAICS Codes.
The following graphic is a representation of PSC Codes with obligations of at least $1M during FY2016, referenced in purchases using the NAICS Code 541512 – Computer Systems Design Services. Please note that the primary products and services in nearly $18B in obligations hailed from Goods, Services and R&D.
Before I wrap up, I want to address a recent op-ed on Federal News Radio where the author discussed never really knowing what Uncle Sam is buying because of Product Service Codes among other things. While the overall piece makes some valid points regarding the age and some of the descriptions of PSC Codes, the perspective seemed one-sided and a bit uninformed. Some of the recommendations listed are already in play by multiple agencies (especially DoD as a whole, the biggest spender!) and the article seemed to infer that Product Service Codes stood alone in the classification of federal contracting activities, which is far from accurate.
While you (the author of the article) may never really know what the Government is buying, I and many others using the totality of information available to connect-the-dots (e.g., NAICS, PSC, PWS, SOW, BOM, etc.) don’t really have that issue.
Happy New Year and Peace!
“The person who says it cannot be done should not interrupt the person doing it.”