Selling to the Federal Government

Selling to the federal government is distinctly different from typical B2B sales. For example, government customers can’t talk openly with you about their needs and challenges unless you have the proper security clearances and certifications. Dress codes are more formal and deals take longer to close. If you’re pursuing government contracts, plan to work with channel partners and have additional revenue channels with faster sales cycles.

GovTech companies specifically targeting government sales should be prepared to commit to selling to the federal government and find a trusted channel partner to work with at the company formation stage. We recommend working with Carasoft. We can help facilitate introductions. Carasoft doesn’t work with everyone. You’ll need a compelling case explaining why they should take you as a client. Pay close attention to U.S. sanctions. Don’t sell to businesses or governments, or hire employees in restricted countries. Non-U.S. citizens and entities may face additional hurdles or be unable to engage in federal sales.

Most federal sales will require working with a channel partner unless you or your co-founder already have the necessary security clearances, certifications, and contacts. Channel partners can help navigate federal procurement but reliability and impact vary. Gaining certifications and clearances yourself is time-consuming, costly, and requires sponsorship from a potential customer. In most cases, it doesn’t make sense to pursue certifications and clearances at this stage. Work with the channel partner who initially contacted you or, in the case of building GovTech, find a reliable channel partner to work with.

Evaluate partner credibility and prioritize partners who are working with existing open source users. For example, In-Q-Tel is a common partner that may reach out to a company they see increasing open source usage within their federal clients. Engaging with channel partners is not free— it takes time and they may take a percentage of the final deal.

Set clear terms and negotiate roles and exclusivity agreements up front. Ask the channel partner to invest time and effort into the deal. You should be able to participate in partner-led discussions with end customers in most cases. The channel partner should pay for your time if that’s not an option. Use professional services pricing (e.g., $450/hour) to filter serious partners and ensure fair compensation.

White labeling rarely yields substantial benefits. Consider allowing minimal branding flexibility without investing significant resources. For example, you can offer customizable logos as a paid feature.

Offer consistent pricing structures and limit custom discounts as much as possible. Use standard agreements and templates for professional services and pricing to streamline discussions. If it makes sense to offer a discount, base them on measurable reductions in costs. For example, if support services account for 15% of the cost and the partner provides their support, offer a 10% discount.

Security certifications are formal validations required to demonstrate that your product, service, or organization meets government compliance standards. The most common certification is the Federal Risk and Authorization Management Program (FedRAMP). The purpose of the certification is to ensure cloud services meet U.S. federal security and privacy requirements. There are three levels of certification (Low, Moderate, High) depending on the sensitivity of the data handled. FedRAMP certification requires sponsorship from a federal agency. It’s a long and resource-intensive process (can take 6-18 months and requires ongoing compliance and audits.

Security clearances are individual authorizations required to access classified government information. They’re necessary for personnel directly engaging with certain federal agencies. You must have a sponsor to obtain clearances. Security clearances are time-consuming and expensive, with processes lasting months and costing up to $15,000 per individual.