AGSAS Value For Money Proposition

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Australian GSA Schedules Pty LtdValue For Money Proposition: 

Australian GSA Schedules Pty Ltd Value For Money Proposition

Overview: 

Overview Why Australian companies are pursuing the US Government market and why you should too – volume purchasing of your products. Why the General Services Administration’s (GSA) Schedule contracts are your best entry point into the US Government market – they are the US government’s second largest purchaser. A candid assessment of the pros and cons of the other avenues to entry into the US Government market – a check list for your market and channel research. Why having your products listed on the Australian GSA Schedules provides you with the best sales opportunities – the US Government’s shopping destination for Australian products. Australian GSA Schedules fees and services – competitive, full service, and tailored to the needs of Australian exporters.

Why should Australian companies consider the US Government market as their first / best entry point for exporting to America?: 

Why should Australian companies consider the US Government market as their first / best entry point for exporting to America? The US government is the single largest consumer in the largest market in the world – when you include state government purchases it represents approximately 75% of the US market. The US government buys more of every product than any other single consumer in the world. Potential purchase volumes far exceed any amounts than can be expected in the commercial sector. Continuous ordering in large volumes permits companies to expand their operations. The US government generally pays its bills on time and is less susceptible to market downturns. Having your products purchased by the US government is the ultimate reference / product endorsement when selling to state governments or commercial customers.

Features of GSA Schedule Contracts: 

Features of GSA Schedule Contracts Limited market intelligence required. There are more than 60 different types of GSA Schedule contracts. They avoid many of the requirements imposed by the FAR. Proposal preparation costs are lower than for tenders. Continuous Open Season – can submit a proposal at any time that is evaluated on its own merits rather than as against others that would occur in a competitive tender. Ordering agencies are not required to evaluate order pricing for listed products – the most important reason why they are used. Orders can be placed on-line at the GSA website. Credit card orders are accepted. No advertising required for orders. No lengthy proposal preparation requirements for orders. No protests of individual orders. Features of GSA Schedule Contracts

Features of GSA Schedule Contracts (continued): 

Features of GSA Schedule Contracts (continued) Base term of 5 years with multiple 5 year options, some evergreen. No dollar limit on orders or guaranteed minimum. Limited competition for orders and negotiation of discounts. Available for use by all government agencies, departments, mixed-ownership government corporations, the District of Columbia, qualified domestic and international organizations and participating state government agencies. $25 Billion ordered through these contracts annually. $15 Billion ordered through the IT Schedule Contract annually of which $8.5 billion involve services. Veterans Administration administers contracts for certain types of products including pharmaceuticals, bio technology products, and medical devices.

GSA Schedule Contract Demographics: 

GSA Schedule Contract Demographics 8,979 Companies hold these contracts. 10,535 contracts in force. 6+ million products and services listed. Buyers use GSA Advantage (GSA’s online ordering website). 250,000 searches per day (4 Million on last day of fiscal yr). 235,000 registered government customers (400 new customers register each month). $2 million per day ordered on-line via credit card. New on-line product search system is operational. e-Buy request for quotation system operational. Credit card ordering system operational.

How Do GSA Schedules Contracts Work?: 

How Do GSA Schedules Contracts Work? Once your products are listed on a GSA Schedule contract your prices and product descriptions are uploaded to the GSA Advantage website that is searched more than 250,000 times per day by government purchasing officials. Government departments and agencies can then order on-line via credit card or orders can be processed via fax or EDI. Government agencies are required to compare the price lists of three companies and are relying on GSA Advantage to do so. Large orders can be subject to further negotiation. Blanket purchase agreements can be put in place with agencies anticipating the need to make repetitive orders or to permit ordering by various entities within their organizations.

Three Ways Australian Companies Can Penetrate the US Government Market: 

Three Ways Australian Companies Can Penetrate the US Government Market 1. Teaming with a major US prime contractor: Pros: FTA elimination of Buy American Act will help Prime contractor may help you to deal with regulations Cons: Essential to have on-the-ground representation to get signed-up with a prime contractor Finding / getting the attention of the right prime – exclusivity game – teaming agreements Preserving your piece of the prime contract – the buy-in game – subcontract negotiations Lack of end-user client interaction – you support the prime Used only in large procurements 2. Compete for tender awards: Pros: Direct client interaction Cons: Dealing with tender and contract regulations – expert legal / contract advice required On the ground representation is essential for early opportunity identification and pursuit The contractor with the inside track with the procuring agency usually wins Excessive proposal preparation costs One-time award – limited repeat business 3. Have your commercial products listed on a GSA Schedule contract: Pros: - Covered later in this presentation Cons: - Covered later in this presentation

Exploiting Australia’s Best Entry Point to the US Government Market: 

Exploiting Australia’s Best Entry Point to the US Government Market First: get your products listed on a GSA Schedule contract. Why: It is not a 'true' competitive tender thus keeping proposal preparation costs to a minimum. Most government agencies will not talk to you unless you have your products listed on a GSA Schedule contract. Once awarded any agency can place orders for your products. Second: establish blanket purchase agreements under your GSA schedule contract with specific ordering activities. Why: To save the cost and expense associated with tenders. Blanket purchase agreements facilitate easy ordering of your products. Third: very selective tendering. Why: They could involve large purchases by large numbers of organizations within a department or agency. Some agencies prefer to use their own contracts.

Obtaining your own GSA Schedule Contract: 

Obtaining your own GSA Schedule Contract Overview: Tender packages run in excess of 150 pages. They contain complex procurement regulations. Sales and discounting disclosure requirements are complex. Most US companies – even experienced government contractors - obtain assistance from Washington-based consultants that have experience working with GSA’s contracting officers. Why? Because…. Substantial legal penalties can apply if the proposal is not properly prepared. Pros: Works well if you have an in-country office and sales force. Eliminates distributor pricing markup. Cons: Retention of Washington consultant and/or legal counsel is essential. Requires disclosure of distributor or sales and discounting data to GSA. Requires you to market and promote the contract within the US. Requires you to learn how to administer the contract.

Using Washington Consultants to Obtain Your Own GSA Contract: 

Using Washington Consultants to Obtain Your Own GSA Contract The Pros: GSA contracting expertise and contacts / relationships with GSA The Cons: Cost: US$15,000 to list and US$5,000 per year to maintain the contract. 3-4 months to prepare proposal plus 3-4 months for GSA to review and make award. Time zone differences – inhibit extensive discussions between the consultant and your senior executives which are essential. Voluminous amounts (2 years worth) of sales and discounting data must be sent to the consultant and explained face-to-face. Due to time zone differences it is essential that you be present for price and most favoured customer negotiations with GSA. You must ensure that the consulting fee includes training on GSA post-award obligations – price reductions, remittance of reports / funding fee. You must ensure that the consulting fee includes at least an initial upload of your GSA approved price list to the GSA Advantage website. You have to manage the contract if you don’t retain the consultant to do so - $2,500 / month avg. You are left to promote, and market the contract which requires and on the ground presence to be effective.

Using a US-based Distributor to List Your Products: 

Using a US-based Distributor to List Your Products Pros: Distributor already has a GSA Schedule and can list your products via a contract modification thus saving the 6-8 months it takes to get your own GSA Schedule contract. Distributor promotes its GSA contract and hopefully your products. You may only need to disclose your distributor pricing to your distributor (and GSA) if you have an established network of distributors. Eliminates the need for an in-country presence. Distributor handles GSA Schedule administration. Cons: You have to find a distributor that lists complementary products and is willing to list your products. You have to negotiate a distribution agreement that incentivizes the distributor and its sales force to sell your products. You will have to give your distributor as good or better discount than you give your other distributors. If you don’t have distributors you will have to disclose two years worth of your sales and discounting history that the distributor will pass on, and explain to GSA. You will not have contact with the end-user clients. Distributor listing / maintenance fees and pricing markups.

Go To Market Channel Matrix: 

Go To Market Channel Matrix

Australian GSA Schedules P/L Value for Money Factors: 

Australian GSA Schedules P/L Value for Money Factors We participated in the negotiation of the Australia US Free Trade Agreement Chapter on Government Procurement – we know how it works and how it doesn’t. We are the only company in Australia that provides US Government contract consulting services and GSA listing services. We are the only company in Australia with an agreement with Austrade for the US Government market space. We have over 20 years of experience in US government contracting and have represented a number of the Fortune 500 companies. We have an outstanding Washington network with strategic alliances that support our client’s US Government sales efforts. We know how to manoeuvre in the space and help our companies to get deals that they otherwise couldn’t.

Australian GSA Schedules P/L Value for Money Factors (continued): 

Australian GSA Schedules P/L Value for Money Factors (continued) Our fees are the same as other listing service providers, but we provide more services for the money than they do. We are Australian owned and based thus eliminating Washington time zone problems. We are securing the award of a number GSA Schedules and will be listing Australian companies and products on these contracts. We act as a distributor for our client’s products through our contracts so that they can be ordered by US federal and state procurement offices. We will market and promote the Australian GSA Schedule contracts through our Washington office to US federal and state procurement offices. Our network of allies in Australia and America ensures our clients get the support they need, when they need, by the best in the business.

Australian GSA Schedules P/L Value for Money Factors: 

Australian GSA Schedules P/L Value for Money Factors We negotiate teaming agreements for our client’s products with large prime contractors / system integrators competing for large GSA orders. Our clients have end-user contact and participate in the negotiation of orders. Through our Washington office we will be responsible for order administration, addition of new products, and payment processing. Through our Washington office we offer Australian client companies the ability to retain dedicated sales reps that we hire and they manage. Many of our fees are 'eligible expenses' under Austrade’s Export Market Development Grant program.

Australian GSA Schedules P/L Listing Services: 

Australian GSA Schedules P/L Listing Services AGSAS Listing Services are priced at $25,000 AUD. For this fee we: evaluate your products for listing in terms of their fit within the product descriptions eligible for listing on the GSA Schedule contract, determine whether your products are eligible for preferential tariff treatment and / or GSA listing under the Free Trade Agreement Rules of Origin, determine the likely target market for your products, evaluate your pricing and discounting methodologies to determine a price at which your products will be offered to GSA, evaluate your company finances, manufacturing capacity, quality control, and export preparedness, prepare product descriptions, pricing, and terms and conditions of sale for your products to be include on the Australian GSA Schedule Contract Price List, and upload your product and pricing information to the GSA Advantage website once your products have been approved by GSA for addition to one of Australian GSA Security Schedule contracts.

Australian GSA Schedules P/L Distribution Services: 

Australian GSA Schedules P/L Distribution Services The Australian GSA Schedules P/L Distribution Agreement provides for a per order transaction fee that is based upon the difference between the price that you sell your products to us, and the price that we sell them to GSA and is determined during negotiations with GSA. Per order transaction fee proceeds are applied to our Washington operations for: Order administration and payment remittance for our clients. Marketing and promoting the Australian GSA Schedule contracts and our client’s company and its products to US Government departments, agencies, and prime contractors. Tracking and pursuit of procurement opportunities for listed products Negotiation of teaming arrangements with systems integrators for large orders. Direct negotiations with ordering agencies for large orders requiring discounting or modified terms and conditions of sale.

Australian GSA Schedules P/L Maintenance Services: 

Australian GSA Schedules P/L Maintenance Services Annual Maintenance fees are priced at $6,000 AUD payable in quarterly installments of $1,500.00 AUD. This fee covers: Price Reductions (required if you trigger the most favored customer clause) Price Increases (as per GSA’s Price Increase Policies) De-listing of older products Changes to listed products (i.e., new versions / models) where changes to pricing and terms and conditions of sale are not required. Changes to listed products where changes to pricing and / or terms and conditions of sale are required, or for the addition of new products are charged at $1,000 per product plus $250 per hour of analyst time to prepare and process a contract modification to effect listing and uploading of revisions to GSA Advantage.

Take Away Messages: 

Take Away Messages The US Government is an excellent market for Australian exporters that can now, for the first time, be accessed by them. There are numerous avenues into the market but most of them pose a number of challenges for Australian companies that will be difficult to manage especially from Australia. Australian GSA Schedules is the only Australian company providing US Government contracting consulting and listing services and is the only Australian company working under an agreement with Austrade. Australian GSA Schedules will be listing the best of Australian technology companies and will be viewed by US agency and department purchasing officials as the US Government’s shopping destination for Australian products. Australian GSA Schedules has the US experience and the contacts to help Australian companies manoeuvre in the US Government space. Australian GSA Schedules fees are competitive, many are eligible expenses under the Austrade’s EMDG grants, and the company offers services tailored to the needs of Australian companies.

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