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How to Sell Whole Product in Government Markets


By Bob Rutherford

Bob_RutherfordThere are few U.S. markets growing more quickly, or more lucrative, or more competitive, than those where the Government, and the Department of Defense specifically, is the sole customer. In contrast to the commercial sector, public sector market share is often all or nothing for a given product – a result of having only one customer buying. The failure to capture a key major contract has frequently meant the demise of a large company. For instance, when McDonnell Douglas Corporation failed to win the fifth generation fighter competition in the 1990s they were forced to merge with Boeing.

graphCompeting in the government or defense industry involves developing a keen sense of the needs of a single customer rather than a broader class of potential users of a product. By and large, products with the intent of military application are developed initially against a well defined set of requirements created by the customer. That is the simplified perspective anyway. In practice the development of requirements is often a collaborative and iterative process involving government and suppliers in a tightening circle of comparing what is needed with what is affordable and technically feasible, or alternately comparing emerging technology with where it could be applied militarily. In the end state, however, it is the government that publishes the detailed technical and cost requirements and industry that must submit a proposal that meets those requirements.