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If your customer base has become rather shaky thanks to the challenges of 2020, becoming a defense contractor can improve your stability over time. Be aware that while selling to the government can be steady once you’re established, you will need to move quickly on your initial projects.
The government isn’t easily set up to pre-pay for a portion of a project. If you get an order for small electronics and you need to tool up a new case for the item, the tooling may need to be funded long before you sell the product.
Selling to the government can mean providing stock to them on a “just in time” basis. This means that they may need 2 parts next month but buy 50 more in eight months. If you can get a contract with scheduled deliveries over time, make space for raw product. It will save money but cost you space.
Your QC team may need to ramp up their documentation process to successfully gain a foothold as a defense contractor. Be ready to send folks out for training and to invest in software to boost your team’s ability to submit all the required paperwork.
Defense RFP’s, or requests for proposal, can be quite onerous. Block out time to read through the proposal process and make your quotes for selling overtime if needed. For example, if you need some heavy tool proofing before you can sell one part, you may need to prove you can complete the first article. The first article approval process may be a very different animal than a plain parts submittal.
You’ll need a seller’s code or DUS number if you don’t already have one. You may also need a five-character CAGE code. Know what you need before you quote.
If you get a long term order and you’re fully tooled up, you may want to make stocking space to store parts to sell for the full contract term. In addition to having space for stock, strive to make sure that the documentation for the production run stays easily accessible for easier selling.
Part of the struggle of becoming an effective defense contractor is that you have to be ready to act if the order comes through. If you’re one of just a few contractors that can deliver a particular product, be ready to invest in redundant tools or tool components. If you need to buy lithium tri-borate (lbo) crystals for a laser-etching or polishing process, consider doubling up on the components of this tooling process that could fail and bring the process to a stop.
Once you get your foot in the door, keep proposing. If you sell something to the Army, could you sell a similar product to the Marines? Follow the FAQs posted by Defense Supply Buyers and be ready to quote on new items as you get tooled up.
If you’re selling to any branch of the military, check out the safety and security regulations that you will need to meet. For example, if you are selling parts used to maintain personnel carriers, study the requirements. The Navy has to move crew on the water, the Army needs to move crew on the ground. The Marines may have to do both. Can you qualify to sell to the Army and the Navy by getting approved by the Marines?
Your products, tools, and inspection process all need to be traceable. Make sure that your parts, your packaging, and your paperwork all trace effectively to their source so that the selling process will go smoothly.
Getting into the defense industry market won’t be easy, but once you get into it you can easily expand into different branches and out to various purchasing units. The restrictions and regulations may seem onerous, but the defense industry qualification procedures are designed for redundant safety procedures and for troop security.