Tony Kwag of Arlington, Virginia-based Bidscale likes to call his company the “TurboTax of government contracting.”
But it didn’t start that way when he created the company in 2020. It instead began as a general consulting company for government contracting. In those early days, Kwag noticed that a number of companies were having trouble with the government contracting process. Despite the fact that it’s a $600 billion industry, according to Kwag, many founders aren’t very interested in that market.
“That’s quite a large market segment, but what we’re seeing is it’s quite insulated and separated,” Kwag told Technical.ly. “There are companies that are government contractors, and there are companies that aren’t government contractors. The companies that straddle both, they’re really the major players and there’s only a few of them.”
With this in mind, Kwag and his team pivoted to creating a solution. Two years later, he said the company has grown 10x year-over-year. Kwag also created something called the Digital Contracting Office (DCO) to help founders break into the space.
At the moment, Kwag thinks that many founders and companies aren’t moving into federal contracting because the buying process is so complex. Both the federal government and the vendors have to abide by various rules and regulations; He’s hoping the DCO will make it easier for both parties to engage in business.
On the founder side, he said, many don’t even know where to begin.
“Sure, there’s the retired colonel who’s splitting off and starting their own government contracting firm, and they know how to navigate the federal government,” Kwag said. “But that is a huge advantage over someone who’s just trying to start a company from their garage with a really great idea and something that can really help the federal government.”
On the government side, buyers suffer from timing issues. Kwag said that all the regulations and policies — which, he acknowledged, are designed to reduce corruption — can stretch the process as long as five to seven years before a contract’s completion. One reason for this is that a lot of the process is still on physical paper, not digitalized.
“Think about what your phone looked like, whether you use an iPhone or an Android, seven years ago — that’s what you would be getting rolling off of a government contract right now,” Kwag said.
Bidscale partnered with UK-based ContractPodAi to create an end-to-end processing system for government contracts. It developed a digitally managed workflow that intends to accelerate the process by streamlining and digitizing more of it.
Together, the pair think that they can help the contracting sector in a few ways. For one, Kwag thinks the product can decrease the barrier to entry and just get more startups and companies involved who otherwise wouldn’t have had the bandwidth. It’ll also help both businesses and the government be more agile, he said, without having to wait so long for decisions.
Lastly, Kwag believes the DCO will actually help the job market. By opening the aperture and making contracts more accessible for non-defense- or -federal-minded companies, more technologists may find an interest in working on government missions. This is especially true, Kwag noted, for projects that aren’t easily replicated by commercial industry giants.
“I can’t underemphasize just how many policies and processes there are for the government to have to go through, how many memos and how many forms they have to fill out just to buy a pack of gum,” Kwag said. “It’s complex for the government to buy and we want to make it simpler for the government to buy.”-30-