Lobbying firms move into federal procurement arena

Federal marketing-the business of advising corporate clients on how to sell their goods and services to the federal government-has become a hot field for Washington lobbying firms.

Cassidy & Associates, already Washington's top-ranking firm in lobbying revenue, recently established a federal marketing practice. In so doing, it joined such lobbying shops as Van Scoyoc Associates, which launched a subsidiary called the Implementation Group last year, and the Jefferson Consulting Group, which has been a mainstay of the field for 15 years.

"It's not lobbying per se," explains Lee Ramseur, Cassidy's vice president for federal marketing. "We consult for federal procurement and acquisition, set up strategic plans for their goods and services, advise clients on the best way to sell to the federal government, and make contacts with federal program directors."

In the six months since Cassidy established the new unit, the federal marketing practice has chalked up "annualized revenues of $1 million, and we've got lots of clients in the pipeline," Ramseur said. The practice's client list includes Kodak, Millivision, T-Mobile, and Veridian. "We've recouped our start-up costs very quickly," he said.

The Implementation Group has also gone from zero to $1 million in revenues during its first year, said Robert G. Efrus, the firm's vice president. Its clients include Yahoo!, BEA Systems and the SAS Institute. The firm recently helped a company called Ocwen win a major competition under Office of Management and Budget Circular A-76 at the Veterans Affairs Department.

"The downturn in the economy and the uptick after 9-11 in homeland defense initiatives has led to many more companies showing interest in this market," Efrus said. "Government became a target-rich environment, and that has held up amply in the last year or so." Efrus said he expects the federal marketing sector to continue to be healthy as long as the economy remains in slow-growth mode.

Though the Jefferson Consulting Group has a longer history in the federal marketing field, it too has experienced growth, said President and CEO Julie Susman. "We're growing 25 to 30 percent a year," Susman said, adding that in the past five years, the firm has increased the size of its staff from 12 to "the mid-30s."

Jefferson's clients include Health Net Federal Services, a subsidiary of a California health-maintenance organization; Flex Products, which makes counterfeiting deterrents; Lexis-Nexis; and a small company called Skydex, which makes protective padding materials.

Sometimes, the federal marketing firms provide traditional lobbying services in addition to specialized procurement assistance. In some cases, they try to help clients who already have contracts with one part of the federal government sell their technology or service to another part.

"The hardest part of the job is the lack of incentive for federal employees to be innovative or to change-the whole civil-service structure doesn't reward people for taking steps in new directions," Susman said. "And the political appointees turn over quickly."

Cassidy's growth has been so rapid that the firm has hired a third professional for the team: John Boylan, most recently a senior staff member in business development at Lockheed Martin. Boylan was named vice president for federal marketing, joining Ramseur and Senior Vice President for Business Development Russell Hale.

Hale said that his goal is for the practice to account for 30 percent of Cassidy's revenues within five years, up from its roughly 5 percent now.

Susman said she isn't overly concerned about the new competition. "Imitation," she said, "is the sincerest form of flattery."

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