DC has a lot of great things – rich history, museums, and the new Nationals ballpark; the other thing DC has, besides traffic, is many government contracting firms. Trust me, we should know. If the federal government is your market, being close to the market makes perfect sense. However, should it be criteria for success? Certainly not. According to a new AP report, "Companies within 50 miles of the White House earn nearly $1 of every $3 in federal contracts given to small firms." Apparently, USAID in a recent RFP went so far as to mandate that the proposing firms be within 50 miles of DC, which seems like an arbitrary limitation of the market. But is it that surprising that being close to the majority of customers results in greater success?

As always, it's who you know

This story underscores the importance of understanding the contracting environment. Like most businesses, government contracting remains a relationship business where knowing the customer and the customer's business remain paramount. What's more, being located in the DC metro area also provides easier access to all-important teaming relationships (there's that word again) and even event attendance. Even as Federal agencies open more regional offices and some, like the Air Force, are moving to a more regional model, the basic principles of understanding the market remain constant. For starters: small businesses can still be successful utilizing the tools and resources provided. These include mentor-protégé programs and set-aside designations; as well as promoting regional notoriety or "connection" to work located in their area of the country. For example, of the 33% of small business work mentioned by the Associated Press, it would not surprise us to learn that much of it was based in the DC metro area anyway. Work in Huntsville, Alabama is probably more likely to end up with a Huntsville firm (at least more than 33% of it). Lastly, niche technologies and capabilities also distinguish small business firms apart from each other and can make winning DC business, outside DC easier. Of course, the contracting officials still need to know you exist before you can win that business, but that's a whole other blog.

Watercooler

One of the interesting points mentioned around our hallways today was that one effect of the location of firms in winning government business is an always growing regional economy. The government contracting market feeds a regional economy that manages to remain strong regardless of the economy nationwide. As more work is farmed out each fiscal year, the government spends more on all government contracting firms and sustains a robust local economy. So, in addition to being close to the customers, DC does have advantages, even more apparent now in the midst of what many consider a major downturn in the US economy. Not to mention the short, daily commutes.