Global Fastener News

2003 FIN – Creecy & Costello: Learn the Rules to Become a Supplier to Government

October 26
00:00 2012

May 12, 2003 FIN – The first step to doing business with the government is to have one person in your company dedicated to learning the rules, Bill Creecy told the National Fastener Distributors Association. Retired government purchasing agents are prime candidates for jobs in distributors selling to the government, the president of KY-based Sales Systems Ltd., advised distributors.

Jim Costello, vice president of marketing for the Aerospace Products Group of SPS Technologies, emphasized the importance of having a “working knowledge” of numerous rules. “In the commercial world, negligence can cost you your business. In government, it can cost you your way of life,” Costello warned.
There may be numerous restrictions, but “always remember that all requirements are the result of someone before having already been caught.” Sales Systems sells more to Navy shipyard contractors than directly to the government, but the distributor still needs to know and meet government requirements. The distributor’s in-house expert on selling to the government needs all of the current standards manuals, including IFI, ANSI, ASTM and SAE. “Be careful that you have all of the specifications. If you do not pick up the latest revisions, you can be in trouble,” Creecy warned.
For example, a mill detail may require a lot number from the manufacturer on the fastener or packaging. “You can not put that on. It has to be from the manufacturer,” Creecy pointed out. For some parts the seal on the packaging from the manufacturer cannot be broken, he noted. “Inventory control and traceability are ‘musts,’” Creecy emphasized. “Someday they are going to come in and challenge you.”
SPS brings in a busload of government purchasing people to its plant regularly so both sides understand each other, Costello related.
• In addition to ISO 9000, suppliers need to provide “paper trails” and past information to the government, Creecy added. The paper trail includes the original purchase order, shipping documents, traceability, heat treating, test reports and every detail. “If an inspector comes in to your testing lab, you even need certifications for your gages the inspector is going to use.”
• “Get a set of suppliers you feel comfortable with,” Creecy advised. If the manufacturer doesn’t understand the government requirements then your inventory may be worthless. “Those parts are yours,” Creecy declared. The distributor/supplier relationship “has to become a marriage,” Creecy maintained.
• Creecy recommends an in-house testing lab. Sales Systems has three engineers and a staff of six in its quality assurance department, he noted.
• In dealing with the government, “play it straight. Never deviate. Never cut corners.”
• Especially since the U.S. Fastener Quality Act, the government has been stringent on inspections and testing. The Buy American Act can be sticky too, as a fastener manufactured in the U.S. might not qualify if the raw material was imported from Europe.
• An advantage of selling to the government is that it expands your geographic territory. Parts supplied to the Portsmouth, VA, shipyard go on ships around the world. “How big do you want to get?” Creecy asked. “There are $3 million in fasteners on a ship.”
Costello: Reasons to Sell to the Government
Despite the tough requirements, there are advantages to selling to the government, Costello explained. “The market itself is $10.4 billion.” Defense Supply bought $175 million in screws, nuts and washers last year, he noted. Suppliers can view price history online, which creates a “level playing field,” Costello pointed out. “Everybody sees where the price is. You can decide if you want to play.” Military sales are increasing and will continue with post-war restocking, Costello predicted.
If you qualify, there are “set asides” giving certain sellers advantages, such as small business quotas, disadvantaged areas and woman-owned categories.
A key advantage to selling to the government is that it can be “your best paying customer” with electronic payment, Costello pointed out. ©2003/2012 Fastener Industry News
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