I've been in the space for a decade. People seem to think that there's hundreds of respondents on these entremes. No, no.

I hope you don't get lucky and I'll talk about that in a minute. So many folks entering the space, like they don't know what they don't know. They assume. Assumption is the killer in this space. Reading the solicitation, it's everything.

Actually show up and do the work and make the improvements that they're showing you. Nothing is a substitute for doing. The reason you're not winning is because you did three to eight.

You're just not good enough yet. Do more. Nobody taught me that.

With us today, the one and only GovCon kid, Derek James. Y'all need to check out his book if you haven't, The Legal Middleman Method. Welcome to the channel.

Thank you so much for having me here, Kizzy. I'm excited to speak with you and spend some time today. Same here. I've wanted to interview you for so long, so I'm so glad that you're here.

And I'm really curious, how did you start in government contracting? For sure. I mean, it's a great question for anybody who doesn't know my story.

I started working for a small business government contractor. I always kind of famously say the first year working for them, I didn't even know what my job was. I just, you know, the punchline was when I'd go to tell my friends I do it, it's something to do with the government. And then I always kind of like got the chuckle, right.

And it was, you know, after winning my first contract and learning more about bidding and relationship, it's this whole other industry in this whole other world. But surprisingly, there are a lot of people in it. And once you kind of get to know and get into the scene, but a lot of people don't know anything about it. And that was me when I first kind of got started.

And that was back in 2014. So graduating, coming off a few jobs and then kind of finding my way and by accident into the space. Wow. I mean, that's a great place to kind of tumble and accidentally get into. And I must talk about the title. You use the legal middleman.

So I want to know, why did you decide to brand it as the legal middleman? And why did you even use the word middleman? You could probably guess that. I know you already know the answer, but it's meant to be a bit. polarizing and I could probably take it a few different ways, but really in essence, I only wrote the book as late as last year, but I've been in the space for a decade.

And what I realized more and more as I was growing my channel and doing other things in the space, just like you, I kind of just heard a lot of things that weren't necessarily accurate and correct. And I got familiar with the terminology of middlemanning where you win a contract as a prime and you have another company fulfill it and then you manage it and then the contract's good and everybody's happy. However...

It's not necessarily always as easy as that. There are regulations like limitations and subcontracting. The government's trying to pump money into small business programs. So those things are very important. And sometimes I think information in the space gets said without the full context is probably the best way that I could put it.

So I decided to write the book to basically just highlight so that everybody knows because it's not necessarily as set it and forget it like cooking a chicken as some make it appear. I found it was very important for everybody to understand that if they're going to go that route, there's kind of a, you know, there's a right way and then there's an illegal way. So that's kind of the emphasis for middleman and the emphasis for legal in the space. Trying to just help all the, especially new GovCons starting out in the space, they want to do that.

They don't necessarily have a business that they've been doing for 10 years, but they know that they can perform. They know that they can solve problems that the government needs, i.e. Sam.gov and all these bids that we all see.

But we just got to make sure we're doing it in a way that's under the regulations. Yeah, I mean, it definitely is not a set it and forget it. This is not a hot pot, crock pot.

It's not that kind of business. What is that thing that a lot of companies do when it comes to middleman that you're like, oh my gosh, please stop doing this? Yeah. Okay.

Just to call for what it is, it's called an illegal pastor scheme and it's not something that, you know, it's not a term that I've created. It's, you know, small health con is a really great, you know, site. Stephen Coe Prince, you know, he's retired now, but amazing.

govcon lawyer in the space small gov cons can check that out but he has the articles depicting the actual court cases where you know the rent-a-vet case or you know this 8a company was setting up a paper tiger like a shell corporation so legal pass-through is where you secure a contract particularly for you know a particular socio you know economic set aside like 8a woman-owned veteran-owned hub zone you're supposed to be doing a minimum percent of the work or you're supposed to be at least working with a similarly situated entity which happens to share that same small business program So that at least X amount of dollars is going to support those small businesses that are supposed to. But what the illegal pass-through scheme does is they win the contract, say, hey, I'm 8A, let me win it. I'm not, but yeah, the company.

And then, hey, let me just go give it to some large company or any other small company that doesn't have that 8A company status, if it was an 8A set-aside company. So it's a pass-through. It's a circumvention of the money from where it's supposed to go.

And the regulations are supposed to govern that, but the government can't be everywhere. We don't want them to be everywhere. It's a whole other conversation, of course.

But in terms of these regulations and small businesses, sometimes it's ignorance, other times it's arrogance, but it does happen a lot. And we're trying to kind of support the space to elevating to a better overall state, I would say. Yeah, and it's remarkable the timing.

energy that some of these companies put into this pass-through scheme that they'll create fake companies i know that there was one company that was sdvosb i don't think they were they were large and they weren't so then they brought in all these sdvosbs to win and then they took over everything pretended to be them so i just want everyone to know that a lot of these companies it's extensive fraud i mean it's It's bigger than just I won a gravel contract and I hired a company to bring in the gravel. I just I don't put it out there. And also, you still got to check your gravel contract because you got to make sure that you look to see what you're able to supply or not supply. What are the things that at least one that you wish more people would do and that you're seeing your students are doing in in the middleman method? The method really is a method.

So it's a number of it's a number of steps. But I will my answer, I will target. to what I think needs the most help. And it won't be like on the regulatory piece because don't get me wrong, the book definitely covers the regulations, but once you understand them, it's not the hardest thing in the world to understand.

You just need to get it. And once you get it, and then you just move on, right? So I don't even think that's where most folks struggle because like I said, once you get it, you get it.

I find more existing and brand new businesses struggling with what I call a changing of the rules. So in the commercial space, right? And- A lot of folks may disagree with me because you may disagree with me, but I think there's something to be said for open-mindedness and certain circumstances and situations. But a changing of the rules in the commercial space, like B2B, B2C, for anybody who's not familiar, business to business, business to consumer, it's often said that, say, the riches are in the niches.

You've got to drill down, you've got to specialize, specialize, specialize. You would rather have a person who does your roofing. where roofing is all that they do versus they do like a million other things.

And you're like, oh God, they're jack of all trades and master of none. That's very much, I think we can all like nod and be like, oh yeah, I feel that in my body. I know what he's saying when he says that with the commercial space. I'm not saying the rules are totally different, but there's circumstances and a different way of thinking when you go to B2G, business to government.

And this is where I try to open up another way of looking at things with a change of rules, because the government, they are, I would say, are very mission focused. And the government has made up a lot of moving pieces, even contracting officers and corps and PMs. You know, they're in their jobs for a couple of years and then they move on and they got to write what they did and pass on to the next person. It just operates like kind of very differently. Right.

And so there are all there to make sure the machine is running. And, you know, every different agency is an arm or a leg or a heart, you know, for the whole U.S. federal government operating. So each respective mission has its own bigger mission as well. Right.

So being extensively mission focused. the rules, in my opinion, do change a little bit, at least when it comes to brand new government contractors. Because if you come into, and this is what I see all the time, a brand new federal contractor coming into the space, let's say they don't have an established business. Say they got their cage code within the last six months and they're like, I want to come in, I want to bring something, but I don't know what to do. I hear there's a lot of different industries that are great, et cetera, et cetera.

I don't know what to do. Okay. In that circumstance, what I see happening a lot is somebody will say, I want to do janitorial. That sounds good.

Like I found some some bids. I found some next codes. I found some keywords.

And they're like, my whole thing is just janitorial. I'm only janitorial. And maybe even more specific than that. What can happen is, and maybe janitorial isn't the best example because it is a pretty good industry in my opinion, but there's like, you know, I like to pick on like, you know, CPAs or, you know, other industries like that, where the number of bids and the amount of buying and the way the buying is done is much more limited.

And so you can run into things if you are too limited, as opposed to the old rules of the commercial space, right? Where- you're not having enough bids to go after, or the customer that you're building a relationship with, you know, they're putting on a May talk where they're buying every five years or like, okay, the contract was awarded and you didn't win it. And then it's not going to be up for bid for another couple of years, right? So you got to go elsewhere.

I recommend more of what I call like an umbrella strategy, which means you group similar or related services. So say janitorial, professional administrative, grounds maintenance, you don't have to be like a jack of all trades, master of none, but if you can group something to have capabilities. I could spend a whole hour explaining this and I'm not going to all kind of teed up here.

But it's like, if you're only doing one thing, how much are you supporting the mission? Now, you don't want to do a million things. But if you can support the mission in several different ways, then there's several different offers, several different opportunities for you to work with a customer, which means there's several different types of bids you can go after, which means you'll be bidding year round.

I'm like, let's not get into the numbers game, right? Or we can, right? But you need to be bidding year round.

You can't just, okay, it's summertime and it's the fourth quarter. Like, let's go nuts. You need to build your skill levels. you know, responding to bids with the same contracting officer again and again, like it's a great form of indirect marketing. You don't just have to spam your CAPE statement, spam your website, actually show up and do the work and make the improvements that they're showing you.

These are all sorts of things that, you know, having an umbrella and playing the numbers game, I'm getting into it. But going that route is something that I don't see a lot of new GovCons come into the space. It's like, I want to do this. I only want to do this.

And I'm almost expecting perfection right out of the gate. I always say we don't know what the first contract is going to be that we win. So why should we act like what that win is going to be out of the gate? I don't mean to do a million different things, but finding a nice balance of an umbrella gives you some wiggle room to grow. And then you can triple down on what's working for you from there.

Does that make sense? Yeah, it definitely makes sense. And also many may be unaware of how how the different NAICs or the different areas aren't connected. And so once you realize the connection, it's like, oh, then that makes sense why they may bring in pest control, janitorial, lawn maintenance, opposed to janitorial IT, cybersecurity. Not that you can't do all of that, but you start to need the families.

Nobody taught me that. I didn't have any formal training. Maybe you didn't either.

Most of us who have... these careers in the space we don't like we have to figure it out for ourselves and we kind of blaze the trail and then we we help others and show others with with a possible way right our company did that and it didn't necessarily make sense to me because i was coming just like everybody else right with the old set of commercial rules of like so we're an it company but we're getting into construction we're buying a manufacturing facility we bought an airport My mind was just blown for like three years growing with this company, but I saw what was possible. We built on different verticals, different divisions, different PMs. And when you approach the government, we didn't just say we do all this, right?

You have a tailored, customized approach for whatever the discussion or the opportunity is. And people need to realize that and remember that. But it's like, yes, you can, because the government and the government POCs and contracting, they want to work with companies that they trust, that do a good job. And I'm not talking about favoritism or bias. But it all shakes out when you go through the evaluations of the proposal.

And it's like, yeah, these guys really do know what they're talking about because it shows. So it all kind of loops together, but it's not necessarily very intuitive from a first glance. So I like to share that because I've been in it for more than 10 years. And it's like once you get in it, you're like, oh, I get it now.

But I didn't get it before. It's kind of hard to see. And I get that's exactly the sense that you come from as well. Yeah, because especially 10, 15, 20 years ago, it's not just for government contracting.

If you wanted to know how to add highlighter. Only talking about GovCon. No, but I mean, if you wanted to add highlighter to your hair, I mean, to your, well, to your hair or on your face, if you wanted to improve your golf game, maybe you went to YouTube, but not exactly. It wasn't, oh, you go to TikTok to learn.

Now you have so many beautiful platforms where you have amazing people all over the world who are not only teaching you, but they're able to share. Maybe they sold a business and they're sharing. Maybe they worked for business, all those kinds of things. So it's not that either of us went through some kind of course and that's how we got into it.

There are those who wonder, well, is there something that's easier to win than others, even if they haven't established business? Is there something that you have found? Talk to me about that question. It's a great question, I think. And of course, it resonates with the audience, but I think it's great for other reasons as well.

I like to bring up the example of, say, like a real estate agent. We can all relate to a real estate agent and say maybe, you know, my mom was a real estate agent and maybe she's just trying to get her first, her first deal for the year or like whatever. And I don't know if she's country focused or city focused or like whatever. The agent is more romantical about the deal than they are about the house necessarily that they're selling. Because if it's a good deal, for example, it can be a beautiful house, but the agent is like the sellers, you know, they're asking for something that is way over, you know, what the comps and market analysis, is it never going to sell?

It's not a good deal. I'm wasting my time doing these showings or whatever, right? But then say it's just a whatever house.

It's just an average house, but it's priced perfectly. We know it's going to sell fast. It's not going to take that much effort.

That's a good deal. Well, a new real estate agent or any former real estate agent is probably going to take the good deal rather than the beautiful or the perfect house. Right. And so I like to use that analogy or example in comparison to...

Derek, what's the hot industry or what are the next codes? It's like, well, if you're bringing an umbrella approach, which is everything, that's the core for me. So I'm always speaking from that. We already know we're coming from multiple different like kind opportunities.

Well, what's going to be the best deal? Or if you're doing your bid, no bids or whatever, what seems like the one with the best opportunity cost or that's going to take these things all need to be considered to forming what is the better deal? So when I get that question, my response to everybody watching this, what is going to be?

because you don't like you don't know what the outcome is going to be you can't control the awards of course but what is your best what is your best swing what is going to be the best opportunity for you to go after all things considered and those things are specific to you like if you're limited in geography or in x codes or this bid is due in three days but there's this one that's good it's due in two weeks i've got more time to put together response and call subs or whatever it's going to be these things all need to be considered into determining is this good or bad There's no good or bad. It's just subjective and to you. So understanding thyself, know thyself, and having a top 10 list of, okay, I'm going to put every bit through this.

It doesn't have to take a day. It doesn't have to take a week. I can do this in 30 minutes. I can do this in 10 minutes, right?

To determine if this is worth investing any more of my time. That's what excites me. That's what I like to teach in the students that I work with.

Having them have no experience, particularly in a specific thing, but they know that they can put together a winning team. They know that they can put together a winning proposal. And so they decide, you know what, we're going to move forward with this one and we're going to say no to that one.

It's more about the deal than the industry. Yes. And I love that. I love that philosophy because I talk about it in terms of being an expert versus being an entrepreneur. And that to me means being an entrepreneur because you're all about the deal, whether the deal's glasses, it's gravel, it's staffing.

It's I mean, it's what makes sense for you, what's comfortable for you. But it's about the deal. If you're going to make the margin that you're looking for, why not?

And you meet the requirements. I say you should do that. I'm also curious in your book, I love your book, by the way.

Thank you so much. In your book, what are at least three takeaways that you're like people can run with these now? Would love to know that. Sure. So one, I'll say I just did, which is the umbrella strategy.

So I'll give you the umbrella strategy rather than trying to be overly niche when you haven't even won anything yet. your business is a hobby. It's not a business ad.

You don't have any revenue. You have an invoice to government. It's just a good idea, right?

Like, let's get real. So set yourself up to succeed with a reasonable amount of opportunities to move forward. Umbrella strategy, number one.

Number two, we touched on it, but I will go more into it, which is what I like to call the numbers game, right? And numbers game, people get an idea of what that is. I'm so passionate about it, and I'll share my definition of what it is and something that you all can put into practice today. So you can put this as a feather in your cap or whatever, or disregard it.

It's up to you. But The numbers game is, number one, it's born out of skill building. There's so many things in government contracting, trying to win government contracts. You don't just win a contract. There's a number of steps and things that you need to get good at.

I like to call those skills. And, you know, if we played Pokemon when we were a kid or we played games or whatever, like you're level one. If you haven't done this stuff, like you're level one. Okay, you need to get to level five or level 10 before things starts to happen in your world.

The only way to do that is to start doing it badly. And then you can learn from those mistakes to start getting better and better and better. Seriously, like I'm not only talking about GovCom, right?

Like this is tying our shoes. This is riding our bikes. This is learning everything. I'm not reinventing the wheel here, guys.

But, you know, I'd rather not go out and say all the sexy things and advertise all the shiny objects. I said I would never sell myself that way. I want to stick to what's real and what's unsexy and what really, really works.

It's like the fundamentals. Like how are you going to like be downing protein shakes and going to the gym if you're not even eating right? Like it just doesn't make sense. But, you know, you can sell a lot of protein shakes, so you got to be careful to who you're listening to, right?

And I know you know that too, Kezi, so everybody needs to be mindful of that. But with the numbers game, okay, since we know we're building skills, these skills could be responding to opportunities. It could be building out our own little mini capture management, right? The bid, no bids, like we just talked about, right?

These are all great skills. Could be reaching out to subcontractors, educating them if they don't know about GovCon, managing them. Oh my God, it's like herding cats. It's like they're children, right?

Like these are all things that... they're realistic expectations and if that scares you away good then you shouldn't be in the space but if you're like okay you know what this is realistic i know what my job is and i'm going to do it i'm going to get better then this can be a vehicle that you use to achieve whatever you wanted to a dream and make whatever you want to achieve you can achieve many things your dreams whatever with govcon but it's not it's not get rich quick so with the numbers game really building it up here right i love it so what i like to say is bids one through five it responses one through five they're just gonna suck like they're gonna be bad Now, if you're better than that, maybe you were in Kizzy's program or my program or whatever, maybe you don't start out bad, right? Because the point of that is to save time and learn lessons, right? And start years ahead of others. Great.

Amazing. You're still going to have to learn some things. Nothing is a substitute for doing.

So zero to five, you're going to mess some things up. Probably you might not be compliant or at the very least, you're not going to be super competitive. Bid six through 10. You're going to start to learn from those mistakes. Okay. You're going to get better, but you're, you're, you might not be winning yet.

You might, you might get lucky. I hope you don't get lucky. And I'll talk about that in a minute. I really hope that you don't. Okay.

It sets the wrong expectation. Six, six or 10, you're going to make improvements. And then I always say 10 to 20, you're in the money and everybody's looking, when is that going to be? Realistically over a year. Okay.

I like new GovCons in the space, especially if you're going after services, right. To at least try to go after 15 to 20 opportunities. They're like, Derek, why can't I do like two or three a week? That's insane.

Your quality is going to, it's going to plummet right now. If you're doing supplies. That might be a little bit different because the numbers are a little bit, it's all about pricing.

You're not writing proposals with supplies, right? But with services, you know, I like you to do 15 to 20 because you should be winning one or a few contracts because it puts you in the range of 10 to 20. And I have the unique privilege as a few other as well yourself, I'm sure, as the more you bid, the more you win. And it's not through chance, it's because you get better. Now, one of the caveats with that is I spoke to a man, he's like, Derek, I responded to 50 bids this year, and I didn't win a single one.

So how does this make sense? First, I paused because I was shocked, right? I haven't heard this before. And I'm like, how could this be? And I said, well, how have your bids changed from like bid number four to bid number 50?

And he said, oh, they haven't changed at all. I'm doing them exactly the same. So this gentleman failure to learn, failure to get feedback, failure to improve. So even if you just put numbers up, that's not the magic. It's just the numbers are a good thing to keep us focused.

Really, what's happening is you're getting better slowly. We're learning to tie our shoes. We're learning to ride our bikes.

And then before we know it, the way we're showing up in our proposals or in our conversations or with our subs or with contracting or whatever, that actually changed. We become a different person. Our identity shifts a little bit because of that. the skill that we're building. And then that results in winning more contracts.

I'll wrap this one up and just say that so many, my heart's really on this because so many respond to three to eight contracts. If this is you listening, if you're watching this, okay, if you've responded to three to eight contracts and you are feeling disheartened, you're saying, maybe this just isn't for me, or it's just too hard, or I'm unlucky, or all of these conclusions, the game is rigged. right?

Or I need to, worse yet, let's get on the shiny objects. I need a GSA schedule. I need to have all this set aside. I need to hire a proposal writer. I need to hire a retired GovCon person from the government to open doors for me.

I need those. That's why I'm not winning. That's not why you're not winning.

The reason you're not winning is because you did three to eight. You're just not good enough yet. Do more.

Get at least 10 to 20. And of course, these numbers, they're just general milestones and flag posts. Puts most folks in a somewhat accurate direction of what to expect mentally. So that when they respond to the fifth bid and they don't win, it's like, I didn't lose.

I learned. And they're like, well, that's what Derek told me. Or that's what Kizzy told me.

I'm on the right track. And I can feel good about it rather than feeling defeated. Because this is such a mental space to be in this game.

Because there's lots of acronyms. It's a totally different language, right? We all know this. So we just need these little, you know, lighthouses to keep us going.

And at times it can feel very dark on this path. So that's why I'm very passionate about the numbers game. No, and I love that you're passionate about it.

And. This is a very unique space where we can receive feedback on our proposals. Even if you're just informed, hey, it wasn't the lowest, that at least informs you, hey, the proposal itself was great.

I just have to take a look at pricing. Or I've had debriefs where it was like an hour long. They had a PowerPoint. There were like multiple people on the phone. There have been debriefs where I just get an email.

Some debriefs, it's just a slide deck. And it just has made us better and better and better every time. When it comes to these proposals, especially for services, what are those kind of key things that you really encourage all of your students to include in their proposals?

What to include and also an approach, right? So I know systems thinking is for like mid and large size companies, but I very much believe in it for very small businesses. Small business teams of one, two and three, which so many are right. You can still work from from systems, guys, and systems allows what you're doing.

to be repeatable and therefore improvable. And you know, the first time you do it, oh my God, it takes like 90% of my brain power. But through doing it, it goes more to like autopilot more to like the subconscious.

So it's like 30% of your brain power. And then your 70% is freed up to learn more stuff, harder stuff. You can solve more difficult problems, right?

So it's like your approach to proposals, system thinking, I like to just break it up into like five steps. This way, you know, if you're struggling with something, you know what, you know what it's called. and then you can take steps to improve it.

So I'll just give you what I call like five phases, right? First phase is reading the solicitation, guys. You need to learn to walk before you can run. So many of you are so focused on how do I write a government proposal? Oh my God, what do I do?

Like, do I just put a technical approach in every single one? Okay, that's totally the wrong approach. You would know if you learn how to read the solicitation, you would find out exactly what to put into your proposal.

And not only that, you could extract that key information put it into an outline and then it becomes more plug and shove because over time oh i've written this before i've written this before i can customize it i can tailor it and then now it's more of an assembly process where you're doing 20 to 30 creative writing and 70 of like matching the requirements making sure you're complying building your outline and having a really strong bone strong skeleton right so phase one reading solicitation it's everything stage two it's almost natural like i just said you take what you read and then you build an outline from it you're extracting that key info put it in a word doc put in an open put it down, put it in order, make some notes. Okay, you're actually doing a lot more than you think you are. Number three, you need to get pricing going sooner than later, because sometimes there could be snags in pricing, or if you're working with subs, it can be like herding cats, and then it could be waiting to the last minute.

So you need to manage. that, but you need to get that going along with you don't want to miss anything. So if you do a site visit, or if you need to submit RFIs, like we do not move forward without having all the information that we need, because bad business is way worse than no business.

Okay, I would rather have no business than a contract that's going to be a headache, or it's going to be a black eye on my seatbars, or whatever for the next year, we don't want that. So we want to feel good. That comes back to like romanticizing the deal like over, you know, the industry, right?

That's part of making sure there's a good deal, right? So pricing, number three. Number four, proposal writing. Okay, there is the proposal writing. A lot of it is assembly that I talked about.

But you know, whether you're writing it, or you have an SME, or you're working with a subcontractor, whatever, if there's a technical thing, or maybe just resumes, or writing to a specific part of a statement of work, you need to make sure you're doing that. And that's not parroting back the statement of work. For example, contracting hates that. You have to explain how are you going to do that.

Don't tell me what you're going to do. Tell me how you are going to do that. But that means, you know, looking at sections of L&M of your solicitation.

So how are they going to be rating you? The evaluation factors, you know, is it management approach? Is it the technical?

Every bit is different. So when you learn how to read, you build the outline. You can almost not even not be non-compliant to some extent because you built it off of the core, right? And so then the proposal phase, phase four, you're putting it all together and then you're filling in the gaps as needed. And then phase five, it's a couple of them just to make it fives, but you have to do a proper review.

So whether it's a red team review or you're giving it to somebody else, or you just have your own compliance matrix, making sure everything is where it needs to be in what page. It's a good tool because we all make mistakes. Properly submitting your offer to the government on time and then asking for feedback. As you already mentioned, whether it's just feedback or if it's something more formal than that, it seems to always be different. Like in different magnitudes of contracts, there's different requirements that contracting has too.

But using those five phases, if you're weak in an area, you can be like, okay, yeah, I'm struggling with pricing. I'm struggling with reading because I missed this. I got two weeks into this thing and I realized I don't even qualify for it.

I wasted all this time. Oh my God, I should have caught this. These are all things we can learn from. And if you're breaking it down in these five areas, it can get you into the world that you need to be in to get better. Yeah, which is phenomenal because the more and more you do this, then it's going to increase your win rate.

It puts you in a different kind of position. And it's happened before. oh man, I didn't read that.

And oh man, I can't believe I wasted my time on this opportunity. It's going to happen. It's going to happen. It's unavoidable.

It's unavoidable. It's definitely unavoidable. What are your thoughts when it comes to responding to sources sought as well as to solicitation, combined solicitation?

What are your thoughts on that? Sure. For anybody who doesn't know, I mean, and I call them the four stages of a bid that all or most bids go through.

Stage one, sources sought. stage two pre-solicitation stage three solicitation stage four award right and it's almost like when a movie's coming out the lame analogy that i get so like you go to avengers you watched avengers and that at the after the credits there's a little snippet right all this movie's coming out but it's coming out in the future you can't go see it right so maybe it's just like a little bit of a teaser i likened that to more to be like the source of song right so it's like okay market research okay who's going to be interested in this it's coming this the bid is not out yet. Like you can't respond to this and win a contract unless you're doing sole sourcing, which we won't talk about right now.

I don't want to confuse anybody, but it's like, it's a future requirement. And then there's just getting some initial interest, right? And you can respond to that, tailorized capability statement, answering some specific questions, typically not giving pricing. And it's definitely not a full blown proposal, right?

So it's kind of like a source of thought. Pre-solicitation is kind of like, okay, maybe they released the movie trailer, the movie posters, like it's coming, but it's not here yet. In GovCon terms, the pre-sale is like, okay.

based on the results of the market research, this is what we found. Maybe we're going to be setting this aside for small businesses or guess what? Maybe small businesses didn't respond to this.

So screw it. We're going full and open and Boeing's going to win this or like whatever. And so once again, you can't bid on that. And most pre-sales, there's not even necessarily anything to respond to with the pre-sale. There might be an industry day, maybe some preliminary meetings if it's a large requirement where there's more stuff, but just you can't go out and see the movie yet.

And then stage three, solicitation. the thing you can respond to, you can find it on Sam or wherever, and you could potentially win it. Okay.

The movie it's Thursday at midnight. You can go and see the movie now. Now it is here, right?

That's the stage three. And then stage four is the award, or like I'd say like the Rotten Tomatoes, like how was the movie, right? So just to tee that up, but then my opinion on responding to sources sought, I think it's circumstantial. So for new GovCons, I teach my students to focus on responding to solicitations and bidding because you only have so many hours in the day.

When you don't have a team to delegate to and you don't necessarily need a 180-day pipeline to necessarily, you could, right? Because then you're getting into forecasts and stuff too, stuff coming out later in the year. It's not bad.

None of it's bad. But it can be bad to focus on something that's six months from now if you're missing something that you could win this month or this quarter. Right.

I like to say priorities when it comes to responding to these different stages. Prioritize what you have in front of you first, especially because you need to start playing that numbers game, right? You got to start building those skills. You know, even if you're like building amazing relationships and say somebody wants a sole source to you, guess what? You still have to submit an offer.

You still have to submit pricing that's going to be fair and reasonable. That could totally lose it for you. So you don't even necessarily want to run out and get your 8A or some of these things that can go that way. Because if you don't have the basics, it's all going to kind of work against you.

So I recommend focusing on the meat and potatoes. Don't start drinking the protein shakes yet. Add them as a supplement when it makes sense.

No, I love that. I love that. I love that you know. I didn't know I had so many analogies, but you're just pulling them out of me. No, I love it.

I love all of this. I would just add, don't forget to request a debrief. Yeah. Or with proposal writing, phase five is review, submission, and debrief slash feedback.

So absolutely. Yeah. Just don't ever forget to do that.

Even if you win. Yeah. Even if you win, you can request a debrief.

Especially if you win because you want to know what you did right so you could do it again, right? Yeah, definitely do. You want to know what you did right.

Or, you know, maybe you won because you were the only submission. Which people, you know, they're like, people seem to think that there's hundreds of respondents on these small GovCon contracts. No, no.

It could be up to five, could be up to ten, could be up to two, could be up to one. When you go to FPDS and you see number of offers submitted, it's like, oh my gosh. It's tiny, yeah.

I mean, one of our recent wins. it's like an $8 million contract. There were only two of us who bid. Congrats.

Yeah, thank you. But then there may be a contract that's like 100,000 and 20 people bid. It really varies.

That's, I think, what's beautiful about this space. And I think you're hitting on a great point that I don't get to talk about much or just shine a light on for a second is that so many folks entering the space, they don't know what they don't know, right? So they assume, assumption is the killer in this space. It absolutely is the killer.

assuming the government buys your goods and services if you have an existing business the way that you're used to procuring them for example but it just seems like so many small gov cons they just write themselves off because they just don't think they're going to have a chance or there's so many other companies already responding to it and then contracting is like i've got to rebid this thing because we didn't get enough offers and it's like just give yourself the opportunity it's why the numbers game works because the numbers are actually to your favor if you play it long enough because It's not a race, it's a marathon, and every mile you run, somebody quit. And my god, if you just keep going, you're going to just be so much further ahead. You definitely will be.

I mean, you definitely, definitely will be. I mean, there's going to be people who quit within four weeks. You know, maybe within a week. I don't even know if you can call that quitting, because they didn't even start. They may have bid, they may have submitted five bids in a week, and then just said, I'm done, I don't want to do it anymore.

You know, it's... This isn't going to pay my mortgage. Right.

People give up too easily. When it comes to funding, because with some of these contracts, even with services, sometimes you need funding. What suggestions do you have for those that may be a situation for them to obtain funding? Sure.

It's a question that I see fairly often as well. A few options, right? I'm not one to tell you what to do. You have to find what is best for you, of course. The first thing I would scrutinize is make sure that you need funding because it could be one of those assumptions, right?

That can shoot us in the foot because in some instances, you really do need funding. Right. Other instances...

do you need funding right right so an instance where you might not need funding is just like thinking that for example if you're working with a sub where they're typically invoicing net 30 which many commercial-based subcontractors do that's how they operate they don't need to be paid the same day that they do the work but many new cons think that they need to be paid right away it's like okay payment terms become paid when paid you educate them hey our first invoice getting set up in woff and pie and all this stuff it might take 60 days because i'm going to do it wrong whatever okay So have a little bit of flow. But after that, it's going to be net 30. And if payment terms are paid when paid to the sub, we don't need to go get some big funding stores or reserve a credit line or a loan or whatever. You don't necessarily need that. That's more of like a, I don't know what I don't know sort of thing.

Now, if you do it wise, the distributor, the wholesaler, whatever, they may have their own credit terms as well, because they don't expect you to like just come up with 50K or 100K or 500K or whatever. If you're doing hardcore supplies like that, more like a drop shipping type thing, they will likely have their own terms for you as well. But then in other instances where you're really needing it, of course, there's like bank loans, SBA loans.

I know factoring is really big in the space. I've referred some people into a factoring company that I work with. But it's really up to you and your pricing because then there is the cost of money element that you have to also build into your pricing.

And that's really important, which is why I don't tell folks too much what to do other than just say, hey, here is common options. What makes what's going to make sense? I appreciate that because sometimes you don't need the money. vendors will be way more flexible than you ever imagined.

Sometimes you do. Sometimes it's a surprise, but making sure you include it, like you somehow factor it in or you're going to, or you realize the, your profit's going to lower. It's like those flipping shows where they're like, we bought the property for 400,000. We put this amount in it, but then we had delays and the rain came and then their profit may not be as high because they had some unexpected costs. I mean, that's just the game of owning a business that happens all of the time.

I appreciate the analogy so much so that I'm not the only one giving them. No, I love analogies. No, it's great.

It's exactly like that. No, I love it. But then you get into these crazy situations, right? Where like, certain clins are extended or executed and others aren't and say you put all your profit in one clin and you didn't the other and now you're like you're getting into like oh my gosh i didn't even know this was a thing right and so i try to warn people of things like that as well whether it's evenly distributing or just making sure you're really on top of your profit game or like you know sub backs out and you know you went with the lowest price and the next highest sub is your your remaining margin so now you're oh my gosh like these are real situation guys and if you're in it long enough you will experience it but just to be knowledgeable of it going in can can maybe help soften it a bit yeah definitely with i've seen that i've seen companies where they'll put their profit in a certain line item i've seen it in opportunities where they'll say something like we want to make sure the pricing is balanced between the line items and balance throughout the years and that's what derek is referring to if you throw all of your profit under supplies but maybe they don't buy all those supplies or maybe they say you know what we change your mind we're going to remove that line item because we're going to go on the gsa schedule and that's where you throw all your profit then you're going to be, you know, you're kind of screwed there.

So it's something to work, to be aware of and be ready to work through it if you do it that way. The company that I worked for, I witnessed this though, where it's like, they were actually in the negative on certain clins, but then overall, like as profitable as they wanted to be. So they're very profitable on others.

And then they clipped those very profitable ones. So all they were left with was clins that they're actually losing money. Like that's kind of more like worst case guys. You definitely, very reasonable pricing is because you just said like, that's, that's so important. And constantly does try to help you, but also for comparing you to other vendors, but also to help you to make sure you're not just totally doing something crazy.

But yeah, pricing is asked for in many different forms and fashions with every bid. So sometimes it's more evident than others as well. Yeah. And the other thing is there's this assumption.

OK, so they bought the gravel, they bought the staffing, they bought the cybersecurity, they bought the new technology that just because it's in the contract and they said that they want it, it's not it. Like it doesn't mean that's what they're going to necessarily buy. So you have to be prepared.

And I've seen it happen to people around me. A great example, it was the FAA and I had a capability brief with them. This was maybe a year ago.

And it's like a financial staffing oriented opportunity. I believe when the incumbent won it, there may have been 30 to 50 full-time equivalents. So 30 to 50 people underneath this contract for those who may not understand what FTE means or it's new lingo for them. Well, fast forward, it was down to maybe 15, 20. So that means when they won the contract, it's like, oh my gosh, this is amazing. You know, you're invoicing a lot of money every month for these people.

What ended up happening was they changed their internal system. They changed their processing processes. So they no longer needed people to do the thing. And you have to be aware of that. Or sometimes we've had this happen.

The people do the thing so well. the government hires them, which to me, it's the most, I feel like a proud parent. I'm just like, so happy because there are very few companies who offer pensions, very, very few organizations.

And for somebody who isn't military to be able to get into a government position and immediately start getting a pension, I'm like, this is the greatest gift ever. So that also happens too. And then lastly, you have the whole, oh, so the sub is doing the work. Then why don't we just go with the sub? And then they'll cut your contract short or give it over to them.

And, you know, that kind of stuff happens too. Absolutely. And you have to be prepared for all, as prepared as you can, because any level of preparation cannot still stop them from happening.

But making sure that your offers are in good standing with where you need to be, controlling your world is where your focus needs to be. Knowing all things could happen, even at the end of the day, that are out of your control. As you just stated in many great examples, I hope you guys are taking notes on that.

I was going to mention a few of them myself. but I don't even have to. Very real. No, it is. I love that because it's real, but it makes it fun.

And you have a great guide, Derek's book, and where can they go to get the book and where can people reach out to you? For sure. If you're interested in getting the book, you can just check out the website, legalmiddleman.com.

We'll have a book tab there, just legalmiddleman.com slash book if you want to go the extra length. Then we're on all the platforms as GovKid Methods. So if you want to check out more stuff. YouTube is our primary platform, but we're starting to grow on others.

So whatever is your primary feed that you like, you can likely find us there to check out GovKidMessage. Well, I am again so grateful to you. I'm so happy that you're here, Derek.

We're both from Michigan originally. Yes. Oh, my gosh. You get that Michigan-ness here.

It's like I need more of it in my life. So it's an extra bonus now. And that's why I love going back. I can't wait for the farmer's market in Muskegon, Michigan. I'm like, oh, I'm just going crazy.

I can't wait to buy all this. That's true. There's nothing like it.

There's nothing like it. Nothing at all. So again, watch his channel, GovCon Kid.

You're going to be able to easily find it. GovKid Method. Well, I mean, yes, GovKid Method. And they can even search you on YouTube.

Yeah, exactly. They'll find you easily on YouTube. Check out his book. This is a great resource. And this is such valuable information because there's a lot of myths around middleman.

So I'm just grateful that we've had this discussion. And again, it's an honor for you to be here. And for everybody who's watching, don't forget to like, subscribe, hit that notification button, and don't forget everything is possible. Until next time, take care.