By Tom Fries, Government/Defense Sales Manager
The Department of Defense (DoD) has a huge budget that companies want to tap into, but selling to the DoD is different from commercial sales. This article discusses the key differences and how to approach selling to the DoD.
The 2023 Department of Defense Appropriations Act provides $797.7 billion in discretionary spending, which represents an increase of over $69 billion from 2022. Companies researching new markets see these enormous budget dollars and naturally decide to target the defense sector for revenue growth. There is, however, a caveat to selling to the defense sector. The process is significantly different from commercial sales, making it important to understand the key differences before deciding to pursue the defense market.
Before jumping into DoD sales, it is important to understand your company’s value proposition. This is the same exercise you would conduct to target commercial markets. What are the capabilities and strengths your company has that differentiate you from the competition? By identifying what makes your company unique, you can determine where to focus your sales activities. For example, if your company builds rugged systems used in commercial aircraft, the USAF and US Navy would be strong target customers.
An important part of your company’s value proposition can be your company’s business classification. Does your company qualify as a small business? Further does your business qualify as a woman-owned, veteran or disabled veteran-owned, or other minority or disadvantaged business categories? Additionally, does your company qualify as a HUBZone business? Each can provide a unique opportunity to bid programs which may favor these classifications.
Ideally your company has technical capabilities as well that differentiate it from competitors – you really do not want to be one of many vendors trying to compete on the same strengths and capabilities. For example, OSS’ value proposition is providing the highest performance computing platforms without compromise for AI Transportable applications in harsh environments. This value is clearly defined on OSS’ website. Understanding OSS’ strengths allows the company to target where in the DoD OSS’ products would be of the greatest value.
Once you have identified where you want to focus your sales efforts, take advantage of the various DoD portals that post RFIs and RFPs. For example, the National Advanced Mobility Consortium (NAMC) is a preferred source for ground vehicle and automotive technologies for the US military. NAMC also offers practical “how to” training for working with the DoD. Another consortium is Naval Aviation Systems Consortium Portal. Both these consortiums charge annual fees, but the investment is well worth the value for identifying opportunities and staying abreast with technology requirements.
The DoD has recognized the delays that are prevalent in their traditional procurement process. In an effort to alleviate this problem, the Defense Innovation Unit (DIU) was established. DIU’s goal is to accelerate the adoption of commercial technology to solve DoD challenges, and has significantly reduced the deployment time of technology to operational use by the military. The DIU posts solicitations on its website. These can easily be monitored for solicitations that fit your company’s capabilities.
An important intermediary with the DoD are the prime contractors. Examples include Northrop Grumman, Lockheed Martin, Leidos, and Raytheon. These companies have a long working relationship with the DoD, and can offer an excellent avenue into DoD projects. Given the large size of these companies, there is no simple way to identify important contacts. There are methods though – contacts in press releases, defense conferences, and LinkedIn, to name a few.
Often the sales cycles for the DoD are longer than the commercial sale. Delays occur because of funding delays, specification changes, and numerous other reasons. So, it is important to not become frustrated and give up. The more opportunities you have working, the easier it is when one of them becomes delayed or is moving slowly.
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Ken Riley
May 02, 2023
..The point emphasized by the author on “not becoming stressed” while waiting for your efforts to pay off on Defense business development is well taken. It also should be noted that part of the assessment on whether the government will award you the contract, is how well you can weather the delays and reviews; only the strong survive, in their eyes…