Blog | Case Studies
Industry: Government Contracting, Professional and Technical Services
TMG Engagement Type: Pricing and Accounting Support
Key Results: A collaborative, expert approach to Pricing and Accounting support that took VetFed Resources, Inc. from a small business to a large enterprise averaging over 20% growth annually.
Headquartered in Alexandria, VA, VetFed Resources, Inc. (VetFed) is a leading service provider for the Department of Veterans Affairs and the Naval Medical Logistics Command. VetFed’s mission is “to serve those who have served and are serving.”
VetFed came to TMG in 2012, a few years after its founding, upon the appointment of a new Chief Operating Officer. VetFed was a small enterprise focused on expansion when they first partnered with TMG, and could not allocate the funds to hire full-time pricing or accounting resources.
VetFed knew that in order to reach the levels of expansion they envisioned, however, they would need a true management infrastructure and pricing and accounting support process to guide its proposal activity and surpass the few contracts it had at the outset. TMG entered as the ‘missing puzzle piece’ to drive these efforts and provide strategic advice and leadership necessary to help VetFed rise from a small entity to a large contractor in the Federal Government space.
The TMG team hit the ground running, and provided a variety of services to VetFed, including indirect rate development/impacting, proposal cost and price volume support, contractor proposal development, time materials and cost plus, fixed rates, and customer debriefs and discussions, among others.
TMG provided the option to have access to outsourced departments with a range of experience levels. For pricing, for example, TMG has Pricers, Pricing Analysts, Principal Consultants, and Subject Matter Experts (SME). This meant VetFed could access, with immediate availability, exactly the right resource for exactly the right amount of time – having a full department available without paying for a full department.
While accounting is the history of what a company has done, pricing is the projection for what it will be. Coordinating the translation between accounting and pricing back to a company’s operational staff, and communicating the full perspective necessary for a winning proposal response, known as Pricing Control, or a ‘Pricer,’ is an important function of a successful Federal contractor. It is also often a costly luxury. TMG was able to bring its outsourced team into VetFed to fill this critical role, at a rate that VetFed could afford without having to sacrifice the importance of the business function the Project Control step fills.
The Pricer is an essential translator between the technical plan and the financial/accounting impacts and risks to minimize the potential for “unbalanced” or “non-compliant” proposals as well as unexpected operational issues after contract award. And just as importantly, this ability increases the likelihood of higher evaluation scores and win rates. In many pricing departments, Pricers are relegated to populating models. Pricers at TMG, however, are trained experts in this critical function. TMG’s team seamlessly jumped in to:
VetFed blossomed over several years into a large business, growing chiefly through contract wins and awards. As a result of this growth, VetFed moved to different cost accounting standards, new indirect rate levels and project management requirements that TMG lead and supported. Throughout the duration of the partnership, TMG played a leading role as a scalable partner, helping VetFed to remain a lean organization with a relatively small G&A footprint.
TMG’s role evolved from getting VetFed ‘up and running’ in their small business phase to supporting them in an expanded advisory role that also involve strategic planning, proposal strategies and integrations, and the more comprehensive pricing and accounting support integral to VetFed’s growth.
VetFed grew exponentially, from a small business in need of financial advice to a large enterprise requiring expanded support, advisory services, and larger-scale pricing expertise. The company averaged 20.44% annual revenue growth over 7 years, for a total of 267% revenue growth during that time. This growth is directly attributable to the dramatic increases in contract awards VetFed received over the course of its relationship with TMG, with pricing services supporting the new business wins and accounting services supporting successful operations. By outsourcing pricing and accounting to TMG, VetFed’s management was able to focus scarce time and internal resources on writing technically compelling proposals and delivering excellent operational services to their clients.
Once cash flow ‘tight,’ with business decisions largely revolving around reactions to financial motivations, VetFed became cash flow ‘comfortable,’ and was able to plan its future growth based on goals.
In several ways, VetFed is an ‘ideal’ client partnership for the TMG team, particularly as a result of the evolution of the relationship over time. TMG was able to jump in with the VetFed team early in their evolution and stayed alongside them to support their ongoing growth as their requirements and goals changed.
Pricing responses are so much more than just a financial quote, they require a strategic approach from an experienced team of professionals. The focus on the real value of pricing is a critical part of our team. The core of the success of the relationship came from the collaborative, team-oriented nature of the TMG-VetFed partnership. TMG was able to provide exactly what VetFed needed when they needed it as they continued to grow their business. In the beginning, it helped them to improve business performance and spur their growth potential and trajectory. Once the momentum began, the TMG team transitioned to more of a strategic, advisory role to continue to help VetFed rise to ever-higher goals of success.
TMG’s expertise, along with its clear, structured approach that establishes clear ‘lanes of ownership’ among team members to ensure all goals and milestones are reached in the course of a pricing proposal process, continued to be an engine propelling VetFed forward to new heights of achievement in the Federal sphere.
“TMG has been an instrumental force in our growth within the Federal contracting space. By serving as an outsourced pricing department as opposed to providing a ‘Pricer,’ they’ve allowed us to scale as we have expanded, and have the array of resources to supply us with the expertise, support, and guidance we have required, every step of the way. They are a vital part of our team, now and in the future.”
-Alfred Giambone, Chief Executive Officer, VetFed, Inc.