Column: How to use USASpending.gov for market research

by Tom Johnson, publisher, Set-Aside Alert

Selling in the federal arena has several advantages over the commercial sales world. The first advantage is that there are well-publicized proposal and bidding rules that help the buyer and seller do business together. The second is the availability of a substantial amount of free information about contract awards and the competition.

Federal agencies publicly advertise a large portion of their purchases through the FBO.gov website and various other specific sites. The government also posts most of its contract awards to a publicly-accessible system, the Federal Procurement Data System (FPDS.gov).

Many users complained that FPDS was too cumbersome to use.To improve access to data and transparency, the USASpending.gov website was launched in 2007. Although it is not 100% successful, in our estimation, USASpending.gov is somewhat easier to use and a good resource for doing your market research.

Focus your efforts

Federal marketing consultants frequently make the point that you should focus your federal marketing efforts on two to four agencies. By concentrating your research, you have a better chance of identifying the richest opportunities for your company with the greatest probability of success. But even that initial step of selecting the two to four agencies takes work, and USASpending.gov is a useful place to accomplish that objective.

Let’s take the Department of Labor (DOL) as an example. Let’s assume you attended a matchmaking conference and learned a bit about DOL. It sounded like there might be some mission requirements that you could solve, but you don’t know yet if it should be one of your targeted agencies.

Drilling down

Go to USASpending.gov and click on “Prime Award Advanced Search” under the search box.

On the Prime Award Advanced Search page, click on the “Spending Type” box marked “Contracts” and then scroll down to “Department/Agency (Code-Name)” and select “1600-Department of Labor.”

Also, scroll down to Fiscal Year and click on 2013 and on 2014 to get a sense of recent DOL purchases. Then click the Search box.

Based on this search, you will find that DOL purchased about $4 billion in goods and services over the two-year period. You can check the Summary View to get a quick look at how much is spent by bureaus/offices within the department, and which NAICS codes are used frequently.

Narrowing the field

How do you know which bureaus and offices within the department are your best targets? Are your products/services generally purchased on a centralized basis, or do you need to sell down at the bureau and field office levels? To answer those questions, back up a step and perform the same search while also specifying the NAICS codes you believe will identify requirements that you can meet.

If you are in the popular “5415xx” information technology industry NAICS code group, search on the four permutations. Based on this NAICS code-based search, your market potential at DOL is about $554 million, and there are about 2500 contract actions (including awards, modifications and funding actions) to review.

In the Summary View again, you’ll notice that only five offices and bureaus at DOL were responsible for obligating nearly all of that funding. You also may notice that 88% of the total was awarded to companies in the DC, Maryland and Virginia region, while the remainder went to companies in Oklahoma and Texas. Now you have a better idea of what you need to do in marketing your company’s capabilities.

One possibility at this point is to review the list sorted by Recipient Name. That would tell you the names of the major prime contractors, in the event you may want to be a subcontractor. You also could check if your competitors are already established in the agency. Or you could find out if there is a graduating 8(a) company that might leave open an opportunity once it exits the program.

Download the details

At this point you may decide to download details from USASpending.gov into a spreadsheet for further analysis. This is easy to do. Just click the Export link and download a .csv file that you can review in Microsoft Excel or Access. There are about 200 data elements displayed for each contract action. There may be numerous contract actions for a specific contract. Don’t let it overwhelm you.

The most important pieces of information--including contract amount, description, Product Service Code (PSC) and contract number (piid)--are in columns C, AF, CC and CF. You can total the actions for a specific contract or unique Product/Service Code. You also can use the contract number to search directly in USASpending.gov. Sometimes the record will display the SolicitationID in column CY and you can use it to search the original solicitation in FBO.gov.

Practice makes perfect

Because of the transparency of Federal procurement data, you can learn a lot about the market and how you can best position your company for success. But it takes some time and practice to utilize these tools effectively, so carve out several hours of uninterrupted time. Football season is about over so you now have Saturdays, Sundays, Monday nights or Thursday nights to practice your own market research skills instead of watching someone else quarterbacking, right?

Tom Johnson is the publisher of Set-Aside Alert and president of Business Research Services, a subscription news service for small business federal contractors, based in Bethesda, MD. He can be reached via email at tjohnson@setasidealert.com .

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Column: Using USASpending.gov for market research

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