My FIRST $1,000,000 Government Contract Award (Scary Lessons Learned) New Contractors Pay Attention!

i'm going to share with you a story about how i won another government contract working for the small government contractor that i worked for this contract was for a heavy equipment lease and rental and this was for the army corps of engineers out of the detroit district and this contract ended up being just under 1 million dollars so any of you who are you know subscribed to the channel new subscribers welcome many of you know my my story about my road salt contract so today i'm going to share another story about another contract that i won but that contract was a sole source you know single source contract where nobody could provide that road salt but this contract and this story was actually competed okay so this is something that i had to fight for and win and i did and for those of you who know my story just for a little bit of perspective this contract was actually won the spring of the following year that i won the road salt contract so i did win contracts in between but this is a particular story that i felt like unpacking for you right now because you know stick around to the end of the story because there's a few lessons that you know hard lessons we had to learn and this also is just you know a bit of an inspiring story as we're in the fourth quarter that i wanted to share with you now so by this time in my journey and in my story i had gotten pretty savvy i would say using fbo fed bizops i had a lot of searches set up feeding me you know daily opportunities things to go through um and i had particular searches set up for local offices so you know take home the detroit arsenal is big in michigan um there's multiple va medical centers there's national guard air national guard and there's also the army corps of engineers so because i was following the army corps of engineers uh one day i basically saw this solicitation come out as rfq and it was for heavy equipment and rental lease of this heavy equipment like dozers dump trucks excavators you know hydraulic lifts things like that a lot of things that you know i'm not a construction person per se so i didn't even know what some of the equipment was these you know hydraulic claws that act as extensions on an excavator that we had to give them lots of lots of you know interesting stuff to say the least but i was still you know pretty new pretty green and you know still wanting to prove myself and i'm like you know well we've done all this why can't we do this you know again this was a woman-owned small business set-aside contract and we were a woman-owned small business certified small business so we were able to perform on this so just because it was something like heavy equipment rental and lease that wasn't enough to hold me back from going after it and pursuing it so because this was a request for quote this is going to be largely based on pricing so i ended up reaching out to some local distributors suppliers like kamatsu um caterpillar i think john deere was in there i'm not 100 um i know we didn't end up going with them and i started getting quotes you know so the government in the rfq they had these pricing cleans and you know they had the proposed specs that the equipment needed to meet in terms of like weight distribution and all these different you know things that an engineer has probably you know outlined you know within the government to give to us a contractor to make sure that the equipment is going to meet these specs well i didn't know what that stuff meant either so i had to give it to the supplier and say give me quotes you know what you quote me what equipment you're going to propose has to meet these specs within the scope of work that the government is requiring us to do and then i need a price off of that not only for you know one month but this was you know base months so not option years but option months because this was the spring the contract was to go into place i believe in may frost laws were a very big thing because the work was to be performed i don't know if it was a quarry or what like up in the sioux you know up in the u.p and michigan and things you know get colder there faster and they also get warmer slower so you know we couldn't move this heavy equipment up there when these frost laws the frost laws say you can't drive a certain amount of pounds on the road until basically things have warmed up enough otherwise it's going to damage the road but all just to say you know this was for may but then they were gonna have option months where they're gonna you know execute june july august and then if they could you know they would go into september so long story short i got quotes you know caterpillar and komatsu they were not able to quote 100 um so basically it was like a hodgepodge of they're going to provide some of the equipment and they're going to provide the rest of it and you know we were also able to propose equivalents so there were a couple pieces of equipment that they were not able to provide because it was already rented out and they just didn't have any more equipment available for those time ranges so they proposed you know other equivalents for that so i submitted that to the government it ended up being just under a million dollars i remember 950 000 or 980 or something like that and then the same week i submitted i got a call from a contracting officer you know the contracting officer on it saying hey you know can we talk we need to talk about your submission and just a side note guys if you get a call from contracting and they need to talk to you that means you have piqued their interest at the very least and they need to make sure that if this is real like did you you know look at this properly um you know did you miss anything you know this was a lpta contract so lowest price so the fact that they were talking to us kind of let me know already that hey we're probably the lowest bidder on this they just want to make sure that we you know can basically provide what we're saying we can provide so we had the phone call my boss was in on this we had the video teleconferencing equipment going the big speaker they had some engineers they had the core there was four or five of them there's two of us and we were kind of fielding their questions what i had to do was i had to take the technical manuals for the equipment that the suppliers had given me and include that as part of our proposal packet submission this you know because i don't know this stuff and the government doesn't expect us to but you know all the specs are provided by the the suppliers so you know that was part of a proposal so they wanted to go through some of that and like i said we did propose a few equivalents so that means you know it wasn't the exact equipment that they had you know recommended because it was not available so we did the best we can well one of the pieces of equipment they ended up that was a alternate they ended up saying okay too but the other one they said no they said this is smaller than what we need you need to come back to me today with a piece of equipment that's going to meet or exceed our requirements for this so you know knowing me you like what else could i do you know i turned to my boss and like let me get on the phone right so i called around and ended you know going through kind of a big circle ended up coming back to kamatsu and caterpillar and i believe it was komatsu that actually provided this so it was a it was actually more than what they needed because the only option was less and they let us know that that was you know that was not meeting their needs so we provided something you know bigger and greater than what they wanted but that was going to increase our price because it's more equipment we didn't want to do that so what did we do you know this is one of the lessons i'm going to talk about at the end um well what we did was we we took that pricing clin for a slight loss so because we had all these other pricing cleans were making all this profit or you know we're making the profit margin that we had set in to be lowest you know price technically acceptable we thought it was going to be fine to basically propose this alternate with a slight loss for this particular pricing clean if it meant giving the government what they wanted you know overall the contract would still be a win and sometimes guys you've got to get creative if you want to win you've got to make the numbers work everything's not going to be black and white cut and dry you've got to make things work so i emailed the new manual the new spec to the government we got back on a phone call and of course they were happy because this exceeded their expectations for this you know specific piece of equipment they were happy they said you can provide us that and we said yeah the supplier said they're good to go and we won the contract as a woman in small business set aside small business contract that was competed so now here's a couple things that i want you to know and kind of take away from this story okay the story is not over here don't click off it's just getting good so the first thing that you need to know what happened was that pricing clinton that we just took a slight loss on we were okay with it because it was only for like two months and then the rest of the equipment they were going to use for you know three or four months so again we're making even more money back than the slight loss on this pricing clinton well what did the government end up doing they ended up extending the clin for the loss that's that was bad right like that's that's a big no-no um that was not a good conversation with my boss like what happened you know how do we price this out and then we realized like oh yeah like we weren't planning on them going beyond two months for this particular clinton but they said hey we need it longer what are you gonna do tell them you can't tell them no like they're just they're gonna keep executing it so this ended up turning our slight loss on that clin to more of a medium-sized loss which then is basically offsetting you know some of these good price and cleanse for the other equipment you know dump trucks dozers what have you um that we are making money on every month they lease it out we're making money well now this is starting to offset that and things start to get a little scary again you know like who would have ever thought that would have happened like you have this kind of rosy picture and everything looks fine but then you know circumstances happen so time goes on the summer rolls through you know they're still leasing the good equipment the profitable equipment and it's still compensating for this particular piece of equipment so everything is fine and then you know the frost laws get close and the contract ends and then the second thing happens the second thing is now a lot of the equipment is damaged so remember this is just an equipment lease and rental we were not providing people this was not a service contract it was just a rental so it was the government employees you know these knuckleheads that were using the equipment up in the sioux probably being reckless with it in addition to wear and tear you know we don't know for sure you know like normal wear and tear is going to happen but you know a rock fell and it bashed in the the window i mean this stuff it's dangerous like it's it's so dangerous big scrapes on the machinery some of the tires were out things like that and you know they they want to give us the equipment now what do you do you know you turn to komatsu and caterpillar and say here's your equipment back i don't think so that will that will put your company out of business if they have to replace millions of dollars in machinery that they leased from us because remember you know the contract was for just under a million dollars but how much do you think that machinery cost i mean we're talking quantities this isn't one of each so at first we thought we were in a little uncomfortable water because they extended a slightly losing pricing clin and then when the government employs damaged equipment without us even knowing about it when it happened it's like why didn't you tell us we went from being uncomfortable to being like in hot water like this is all we focused on we dropped everything we were doing kind of long story short we were able to get what's called an rea and reas aren't even necessarily fit for this situation i don't know how he got it but it was hundreds of thousands of dollars worth of damage it would suck out all the profit we were making on this contract this contract would be a total loss against the company now it's not just a pricing clinton but the whole contract itself this is how you put companies out of business so basically we didn't know at the time you know you know just as i was winning these contracts and it was new you know and you know it was kind of reckless at the time you know looking back at it um and that's why i want to share these lessons with you you know but we hired a contracts attorney they basically educated us on this idea of an rea a request for equitable adjustment basically saying you know if something happens outside of the contract that causes undue harm on the contractor contracting can put additional pricing on the contract and that's actually what ended up happening you know luckily for us the the supplier actually ended up quoting out the damages they actually had the able to do the repairs so they quoted it themselves they probably marked it up to some insane number i don't know what it actually took to repair but we got an rea for those funds that way we did not have to take that huge loss on the contract but kind of the story here is you know every contract you take there's a certain risk associated with it and you know like we had never been through something like that but we've learned it and we're wiser because of it we learned about you know that's how we first learned about this rea process which you know you can't count on you can't bake on and learning more about it it really wasn't even the best fit for the situation so we got super lucky that we were able to do that because imagine what would happen you know if we didn't but you know this was another contract that i won it was just under a million dollars we still ended up making a good amount of profit on the contract we performed we built our past performance using this type of contract to go after other contracts with we didn't end up doing a whole lot in this type of space because after this we were kind of like once bitten twice shy my boss really didn't want to jump into the wagon to go after more heavy equipment um and i don't i don't blame her at all so i wanted to show you a few things in this story i wanted to show you a competed contract instead of a sole source like we did in the road salt i also wanted to let you know you know that it's possible you can win and sometimes contracting will enter into negotiations with you and sometimes you have to be creative but then also that there are these risks that are associated with contracts that you have to be very careful which is why you don't need to just run out and do this that's why this is not get rich quick this is why i recommend you know the business that you're getting into the contracts that you're trying to pursue first that way you're more knowledgeable you know don't go through the mistakes that we made just try to win anything that you can because you know it wasn't my company you know i worked for a contractor this was not my business she carried all the risk not me i just knew i was going to get paid a commission on it so i i wanted to go out and hunt everything that i could and i did and i got very good at it but i've learned a lot of things in the process which is why you know i want you guys to be careful if you're listening to other people in other places or on youtube that are telling you to run out and go and do these things or just go out and get eight a or just go out and get you know whatever it can be very dangerous there are risks associated and this one we got very lucky so take some learning lessons from this story i hope it helps you but i also hope it inspires you that if you're somebody who knows your business that there is an actual a lot of opportunity with u.s federal agencies to win government contracts with so i hope this story has helped you in some way and i will see you in my next video

Channel: Derek James

Views: 13,531

Keywords: sam.gov contracts, government bid proposal training, sam.gov tutorial for small business, win government contracts for your small business, govkidmethod, government contracting training, government contractor business, small business ideas 2021, war dogs real story

Id: Sd6_moX9maI

Length: 14min 52sec (892 seconds)

Published: Sun Jul 11 2021