Editor's Eye on Baltimore: Government Contracting in Today's Environment: A Conversation with Paul Mauritz, Vice President, BAE Systems, Inc.

Posted February 10, 2012

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Paul Mauritz

With budgets tightening these days, is it too late to join the government contract game? With those thoughts in mind, I recently had lunch with Paul Mauritz, a seasoned entrepreneur who has seen both sides of the government contracting process, to discuss the current climate and to learn whether small companies might succeed in an increasingly difficult government marketplace.

Tough Times. Paul is Vice President of Business Development, Informational Technology and Cyber Security Solutions for BAE Systems, Inc. We launched right into our discussion - how can any organization, not already well entrenched with government contracts, even think about entering this market today? To have any chance of success, Paul suggests that one has to understand "two real trends" playing out, trends that he acknowledges are "directionally opposed" to one another. The first is "protecting [defensive technologies/services] or leveraging [offensive technologies/services] secure assets." In short, don't even try to get involved in government contracting unless you have a solution that improves current offerings (whether or not their security related). The second is the pressure of government to "achieve operational efficiency, [that is] to do more with less, given budget pressures." The pressure to find better solutions to problems at a cheaper price is the only way an organization has the chance to gain a foothold in the government marketplace. This requires a real dose of honesty in recognizing the merits of what you have to offer (or not).

Where Momentum Matters. But this discussion of the market begs the question of how a small company can ever get into the contracting game. "Historically government has turned to primes [large government contractors] to solve a problem," says Paul. The problem increasingly is that many "primes are too big or unable to figure out how to tackle a challenge." The pace of innovation is accelerating and some primes, in Paul's view, are recognizing that the best way to provide unique solutions is to partner with smaller, more agile companies. "It's still about the network, but the key is to get to a certain mindset within a [prime], to find the business development person, however configured or defined [in that prime]." Where a prime recognizes that it is lagging in innovation, an agile small company might be the right answer to accelerate innovation.

Find the Pain. Another approach is to know the problems that a prime is struggling with in order to see if you have a meaningful solution. When the prime is often the last to know, finding that "problem" might lead you back to the customer itself. The real challenge may be to understand what the government client is really looking for, and more importantly, gain a sense from the government client itself of where existing contractors are falling short. Paul reflects that "the government knows what it wants, and [might see] how you're truly valuable." If you cannot solve the problem at hand, it's a wasted effort. In those situations where the prime doesn't understand where the problems are, the government client most likely does. If you can, then "get the government representative engaged in your solution." There are no shortage of conferences, shows and networking events in which to wander. The key in Paul's mind is to find where your technology or services represent an unmet need. "You have to continue to show up," says Paul, and really listen to where the pain remains.

Rear Window. Paul had an interesting admonition about the bid process. "Remember that RFPs are backwards looking." It's not that they don't reflect a need, but often the solutions raised in the RFP reflect yesterday's approaches. "You should ask if there is a better way." Paul continues, "if you have a better technological solution, then find a way to offer it." Don't get hung up on confidentiality, as the reality is "slim to none that a prime is going to steal your idea." The vast majority just don't move that quickly. To avoid getting trapped in that rear window view, Paul suggests a deceptively simple focus:

• Get the attention of the government customer
• Offer a compelling solution to an unmet problem
• Demonstrate credibility through past performance

Paul is frank about these three concepts: you need them all in order to succeed in this environment. In the end, the most successful small companies make inroads in government contracting through either (i) convincing a prime that their solution meets a critical need, or (ii) having the government customer push a reluctant prime into working with it. In either scenario, it's critical to have the government client as their most ardent advocate - pushing their solution, where the status quo or past approaches just don't cut it.

Take Away. While the focus of our lunch was government contracting, we paused on the thought of how similar many of his points were for any entrepreneur. While aspects of the dance are certainly different when you move from the commercial market to that of the government, what matters is eerily similar. Getting a customer's attention, offering a compelling solution to a real problem and proving that they can trust you to deliver - what entrepreneur is not relying on these strengths. What was also sobering about our conversation was the reality was that, among these three traits, if you don't offer something compelling - you're screwed. While one might in the past be able to fudge competency or experience with a clever spin, the "new normal", is that we're all from Missouri - if the solution isn't compelling, doesn't really resolve a serious pain, or doesn't materially improve things, then the solution is irrelevant. And the clock continues to tick.

To learn more about BAE Systems Informational Technology and Cyber Security Solutions: http://tinyurl.com/7foh6of

You can reach Paul at: Paul.mauritz@baesystems.com

For comments about this article or thoughts on future conversations, let me know at: nfowler@rosenbergmartin.com

With more than 25 years experience in law and business, Newt Fowler advises many of the Greater Baltimore region's entrepreneurs and technology companies, guiding them through all aspects of business planning, technology commercialization, and M&A and financing transactions.