The government spends billions of dollars each year on goods and services, and by tapping into this vast marketplace, small businesses can secure lucrative deals, gain steady income and heightened visibility. In this episode of The Agent of Wealth Podcast, host Marc Bautis and guest Richard C. Howard dive deep into the world of government contracts.
As a career military acquisitions officer, Howard oversaw $82B+ in DoD contracts, and has advised and trained over 400 companies as a consultant. He’s the CEO of DoD Contract – which guides, trains, and mentors small business owners and sales executives through the government sales process – and the host of DoD Contract Academy Podcast.
In this episode, you will learn:
- The benefits of selling to the US government as a small business.
- How small businesses can find opportunities to sell their products or services to the government.
- How small businesses can stand out in the government procurement process.
- How small businesses and startups can utilize the Small Business Innovation Research Program.
- And more!
Resources:
www.dodcontract.com | DoD Contract Academy (Podcast) | Usaspending.gov | Sam.gov | Small Business Innovative Research Program | Bautis Financial: 7 N Mountain Ave Montclair, New Jersey 07042 (862) 205-5000 | Schedule an Introductory Call

Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Welcome back to The Agent of Wealth. This is your host, Marc Bautis. I’m joined by a guest for today’s episode, Richard C. Howard. Richard is a leading authority on US federal government contracts. As a career military acquisitions officer, he oversaw $82B+ in DoD contracts, and has advised and trained over 400 companies as a consultant. Richard is the CEO of DoD Contract, which guides, trains, and mentors small business owners and sales executives through the government sales process.
Richard is the host of the DoD Contract Academy Podcast, and speaks extensively on the nuance of federal contracting strategy. Richard, welcome to the show.
Thanks for having me on, Marc.
I don’t think people even realize that government contracts are out there. Can you start off by explaining this market size, and some of the benefits of selling to the government as a small business?
The Benefits of Selling to The US Government as a Small Business
The US government is the single biggest purchaser of goods and services in the world. When people think about government spending, most immediately think of big defense contractors. But in reality, the government buys just about anything you could think of – from defense and weapon-related spending, to tai chi instruction, to commodities, to food. Think about it like this: Every military base is basically a small town, or city in some cases. All of the infrastructure that goes into that town or city is paid for by the government. And they have a mandate to buy from small businesses.
So whether you’re in – cybersecurity, accounting, legal, you’re selling food, you have a franchise, you have a training business – the government is most likely buying in your area. It is very rare that I find an area where the government isn’t spending money, so the spending is vast.
The government has to buy from small businesses, yet less than half of 1% of US small businesses are actually participating in the government contracting process, despite the high spending levels.
Alright, so there’s a lot of opportunity here. How does a small business find the contracts?
How Small Businesses Can Find Opportunities to Sell to The Government
Because we’re talking about the government, there is a lot of regulation that exists to ensure there’s fairness and that the public can see what the government’s doing. So everything the government spends money on – with the exception of a couple classified contracting avenues – is public knowledge.
So, as a small business owner, you should ask, “Does the government buy what I sell?” To find your answer, go to a website like usaspending.gov and begin searching public records to find out what the government spends on.
Whatever you sell, it probably falls under something called a North American Industry Classification Code, or NAICS code. When you go into usaspending.gov, type in what you sell under NAICS – for example, accounting. The website will suggest different codes that you would fall under. You can click on that, and sort it by small business spending.
You can quickly see how much the government spends on small business contracts in your industry and area of focus.
Are these contracts location specific? Does it help if a business is located near a military base, for example, or does it not matter?
It depends on what you’re selling. By the way, government contracts certainly extend past the Department of Defense and military bases. There’s lots of different federal agencies that spend money.
Okay so once a business owner discovers how much the government is spending in their niche, what’s the next step?
Once you know that the government buys what you sell – if it’s local, they buy it in your state, or if not, you can work anywhere – the next step is to register your company. You can do that at sam.gov. That’s where all registering and most of the solicitations take place.
So when you go to sam.gov, you’ll find instructions on the screen for registering. Of course, you need to have a legal business in the United States, and come ready to register with your EIN number.
All in all, the process takes a couple weeks sometimes, but at the end of it you’ll get what they call a CAGE code and UEI number – these are federal identification numbers for your business. Once you have those, you can start bidding on contracts.
By bidding, do you mean writing proposals?
Yes.
How Small Businesses Can Stand Out in the Government Procurement Process
What can a small business do to separate themselves from the others trying to do the same thing?
Good question. This is really where most companies fail in selling to the government…
Once your business is registered through sam.gov, you will begin to see what’s called a request for proposal, or RFP. At that point, a business can begin writing a proposal. But, the government is very regulated in how they buy products and services.
For instance, if I saw an RFP come out that the government is looking to buy a $3 million landscaping contract for base X, I can’t just pick up the phone and talk to someone to get my questions about the contract answered. Now, if it’s a big contract, the government will answer most questions publicly through sam.gov. In those cases, you might get some answers that can inform your proposal.
But otherwise, you won’t be able to set up a meeting with a government worker. You won’t be able to develop a relationship…
So, before the RFP comes out, there’s something called the market research phase. Let’s say you’re a software developer, and the government is putting a command and control platform together, and you have a great user interface for that. Well, it’s during the market research phase that you can engage with the government if you really want to have a shot at landing the contract later on. Meaning, before the RFP comes out, we want to know who is doing the purchase, and we want to know the details of the opportunity ahead of time.
If you want to differentiate yourself from the rest of the herd, you want to look for things like a request for information or sources sought. When those come out, they’re squarely in the market research phase. At that point, you can set up a meeting with the government.
I recommend small businesses to respond to requests for information. They’ll answer questions like:
- How long have you been in business?
- Do you have past performance?
- What do you think of the approach the government wants to take?
And, you’ll be able to suggest things. For instance, when you register your business, there are different certifications. Examples include:
- Small business certification
- Woman-owned small business certification
- Disabled Veteran-owned small business certification
If you happen to have one of those certifications, you do have a leg up, because the government needs to set aside a specific percentage of contracts to those certified businesses.
But, back to the market research phase, you can actually recommend that the government lists the contract for a specific certified group. So, you’re helping the government write the solicitation, and you can give yourself a leg-up if you suggest a certification you have.
Okay, so you’re trying to influence the decision a little bit. Have you ever seen a case where a small business had a product or service that the government isn’t spending on, but they propose it to them?
Yeah, there are a couple of ways to do that. I would say if you take away one tip on selling to the government, it’s to get meetings and build relationships with the people that actually buy what you sell. There’s a lot of ways to do that, but mainly through research.
If your business sells a product or service that the government is not actively looking for, but you want to sell to the government, the government needs two things: A requirement, and funding.
The Small Business Innovation Research Program
If it’s an innovative solution of some kind, for example a patent, you can go after something called the Small Business Innovative Research Program, or SBIR. Any government agency that spends a certain amount of money in research and development has got to contribute to this program. So, the SBIR program spends about $4 billion a year on innovative research and development contracts with small businesses.
This is a way to basically propose your product or service to the government, because they have funding in the SBIR program. If the review panel thinks that what you have is innovative, and that it would achieve a government need, you can win one of those contracts.
Phase one of SBIR is kind of low dollar. Let’s say, for example, you’re creating a VR training system. In that case, phase one might just be a feasibility study. You might propose that the government uses a VR or augmented reality training system to help maintain or fix aircrafts, for instance. Well, that might resonate with the board. That first phase one event is probably going to be somewhere around $100,000-$150,000, which is small for government contracts.
But, what you’re really doing is:
- You’re establishing past performance with the government, because now you have a contract.
- They’re now going to help you find people in the government that would potentially sponsor you.
Now you can’t totally rely on the government SBIR office, you also need to put yourself out there to find a sponsor. If you find somebody willing to sponsor, but they don’t necessarily have to have money, they just sign a memorandum of understanding for you to go to phase two.
Phase two is to develop a prototype, or set up a demonstration. There could be a lot of different things that you’re recommending, but that’s the phase two piece.
The Small Business Innovative Research Program is really great for getting your feet wet. Even if you have a developed product but you’re modifying it for government use, that would also qualify for the program.
Going back to finding these opportunities, my father actually had a government contract through a larger corporation. He created a pellet that went into 50 caliber ammunition. He wouldn’t get the government contract himself, but General Dynamics or Olin would go through him to create this component of their contracts with the government. Are there opportunities like that out there?
Yes. That’s a really good point. There is a variety of ways the government can buy things from a small or large business owner. For example:
- Contracts.
- Subcontracting.
- Sole source contracts.
As a business owner, you need to understand how the government is buying what you’re selling. That’s something that you can do pretty easily with the research tools the government offers.
Let’s say you own a company that is licensed to do HVAC. Over time, you’ve built a relationship with the government office that purchases contracts in construction. From that relationship, you learn that next year, Hanscom Air Force Base is going to be building an office building, and you have interest in installing the HVAC system. But, you aren’t able to take the full construction contract.
What I recommend you do is look through a website like usaspending.gov to see which construction companies have done that type of work with the government – illustrating past performance – and reach out to them about this upcoming opportunity. The fact that you’re bringing them this opportunity sweetened the pot for them to work with you, involving you in the project.
If you reach out to three companies like that, you’ll get at least one or two bites to form an agreement and go after a large contract together. That’s very helpful for a small business, because the big company can handle the proposal writing, and so on.
Artificial intelligence is all the rage right now. Do you see AI being used to uncover some of these opportunities, or to help small businesses in this process?
It’s interesting that you bring that up. Two of my recent episodes on the DoD Contract Academy Podcast were about AI in the government space.
One of them is called Govly, which uses artificial intelligence and machine learning to enable government contractors, OEMs, and distributors to accurately plan for government purchases years in advance
The other is called Rogue, which is an AI tool specifically designed to help businesses write proposals for government contracts. It kind of works like ChatGPT.
Business Financing and Government Contracts
What happens if a business needs financing to fulfill an order from the government?
First, it depends on the contract. If it’s a SBIR contract, where the business is developing something for the first time, then you can win the contract before you have to start development. But those are research and development contracts.
So let’s say you win a small services contract that involves employing 20 people. The small business will have to pay those individual employees before the government pays the small business. That’s because there’s about a 90 day turnaround time on invoicing to the government.
Now, there are certain financing houses set up specifically for government contractors. One thing to know is once you win that government contract, it’s one of the most secure contracts you’re going to have. So a lot of banks know they can count on the government paying the business.
That’s also one of the reasons companies go after government contracts – because it increases the value of your company.
Are Government Contracts Recession-Proof?
In addition to AI, the other thing that we’re constantly hearing about is this looming recession. At a high level, how is government spending compared to other industries?
Government spending is more stable. I always recommend that business owners – small or large – have one stream of income from commercial sales and another stream of income from government sector sales. The government is spending year over year, whether there’s a recession or not.
But I would say that the government experiences difficulties in different ways, and typically at different times.
Usually, if you have a three-year government contract, for example, you’ll receive that funding month over month. Now, there are times when the government shuts down, or when there is sequestration. The government can terminate a contract for convenience. But if they do, there are regulations to protect the companies that held the government contract.
That’s good. Well, we’re just about out of time. Richard, thank you for joining me today. You did a great job explaining how businesses can leverage government contracts as well as how to navigate the government procurement process. What’s the best way for our listeners to contact you or learn more about your advisory coaching services?
Your listeners can go to dodcontract.com to schedule a consultation. On the website, we also have courses available. And of course your listeners can check out my podcast, DoD Contract Academy, on whatever platform they like to listen on.
Great, we’ll link to those resources in the show notes. Thanks again, Richard. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review on the show.
According to Schwab’s Modern Wealth Survey, 73% of Americans say their personal values guide how they make life decisions more today than they did two years ago, and 69% say that supporting causes they care most about are a top consideration when it comes to their financial decisions. In this episode of The Agent of Wealth Podcast, host Marc Bautis is joined by Luke Wilcox, founder of Ethos ESG, a FinTech platform for financial advisors, investors and institutions to align money with causes they care about, including racial justice, climate change, LGBTQ equality and more.
In this episode, you will learn:
- What is ESG investing, in a nutshell?
- Perspectives on the rise of values-based investing.
- How Ethos ESG’s platform works to align people with their purpose.
- How companies like Ethos ESG measure the impact of values-based investing.
- What to look for in the future of ESG and values-based investing.
- And more!
Resources:
Ethosesg.com | [email protected] | Bautis Financial: 7 N Mountain Ave Montclair, New Jersey 07042 (862) 205-5000

Disclosure: The transcript below has been lightly edited for clarity and content. It is not a direct transcription of the full conversation, which can be listened to above.
Welcome back to The Agent of Wealth Podcast, this is your host, Marc Bautis. On today’s show, I brought on a special guest, Luke Wilcox. Luke is the founder of Ethos ESG, a platform for investors to align money with causes they care about. Luke, welcome to the show.
Thanks, Marc. It’s great to be here.
ESG investing isn’t new, but I think we’re seeing more interest in it. More people want to invest with their values. Can you start off by providing a little background on what ESG is? What does it mean to invest with your values?

ESG Investing in a Nutshell
ESG stands for environmental social governance. As you mentioned, it was introduced a long time ago. Historically, ESG investing has focused on measuring the sustainability and ethical impact of an investment in a business or company. For example, mitigating downside risk by avoiding investments that are exposed to fossil fuel, or avoiding investments that don’t have good governance.
There’s also another side of ESG investing, which is values-based investing. Values-based investing, or socially responsible investing, is more about aligning your money with your values. A lot of investors generally associate values-based investing with ESG investing.
The process of aligning your investments with your values often takes form through negative screening. In this process, an investor starts with the entire universe of potential investments, then screens out variables that don’t align with whatever it is they care about, like fossil fuel impact. That’s the basic approach to ESG investing.
Investors can also look at a business or company’s ratings to see which are aligned with the impact they want to have in the world. This is a growing part of ESG investing, and an area that we’re really focused on at Ethos ESG – the impact of values-based investing.
Perspectives on the Rise of Values-Based Investing
Great. So we see this trend is increasing, right? I think it’s due to education, for one. For a while, people didn’t know they could invest this way. But another reason is because we’re in such a politically charged environment right now. People are interested in influencing change. You can do this by voting and protesting. If you have a lot of money, you can lobby and create influence that way. But for the majority of people, they can create change through investments – big or small. Put your money towards something you believe in. Are there any other reasons you see for this trend picking up?
Voting is a good analogy. For some, it may seem like a relatively small values-based investment doesn’t have much of a direct impact. But if a whole bunch of people are doing that, and it moves capital away from fossil fuel, for example, that can have a real impact. It’s similar to voting in that way, as voting can affect real change when more people vote the same direction. Along those same lines, people are seeing tangible effects of climate change, social movements, etc.
People are feeling the real impact of broad trends in the world, and they’re searching for ways to respond to them. For example, if you experience a forest fire, taking action against climate change could hit home. Investors can do that with their money.
Lastly, I would say there’s an increase in shareholder advocacy, because now you can engage directly with any companies or funds you hold as a shareholder. There’s an increase in tools and resources out there that make it easier to affect change in companies (or funds) you’re invested in.
When you mentioned people banding together, it reminded me of the meme stocks surge, due in part to Reddit. Of course there were institutions behind meme stocks, but it’s an example of investors banding together – there is power in numbers. What was the impetus for you to start Ethos ESG?
Founding Ethos ESG
Personally, I was really dissatisfied with the analysis out there for retail investors, larger investors and wealth managers in regards to the values perspective. I was trying to find credible analysis on what the real impact of my investments were on the things that I care about, from climate change to social justice, and so on.
When I founded Ethos ESG in 2019, there were not a lot of great resources that combined data in a credible, meaningful way, allowing investors to determine how aligned a particular investment is with their values. Still today, a lot of the ESG information focuses more on financial risk. Whereas I, and a lot of investors, are really interested in measuring the impact. That’s what drove me to found Ethos ESG.
The fact that Ethos ESG can provide that information is great. So let’s say there are 50 different filters based on ESG characteristics. Can the Ethos ESG technology specifically filter each, to create a personalized profile for investors?
So our platform focused on letting the end investor – directly, or through a wealth manager – selecting five to 10 issues they care most about. Some examples are climate change, biodiversity, social justice issues, ending world hunger, mental health initiatives… Whatever is most important to you, we help you pick those things. Then you can screen things out. For example, let’s say you don’t want to invest in any alcohol, or fossil fuel.
We personalize the criteria to build a basket of available securities. That’s the ESG basic methodology: starting with the universe then filtering down based on your criteria to a smaller basket of potential investments, companies or funds that you can then consider engaging with.
Is there a way to do it the other way? Let’s say an investor wants to filter in specific things that they care about?
You can, yes. On Ethos, you can start with, say, the top 10 companies rated for gender equality. Or you can start with a sector or industry, then get the top-rated on a particular issue. In these instances, we start with the top-rated across a diverse sector allocation, then build a portfolio from that.
Does Ethos ESG use its own ratings, or ratings from somewhere else?
That’s a great question. There’s a lot of debate about ratings because there’s no standard rating system. Each rating agency has a different answer for the same company. It’s really confusing and frustrating for a lot of investors. For example, Morningstar may rate a company well and MSCI may rate the same company poorly. At Ethos ESG, we don’t use any external ratings. We create our own. But I have a lot of respect for the other ratings agencies.
We really focus on impact, or values alignment, first. We don’t consider risk or financial materiality in our ratings. Our focus on impact leads to different metrics, different data sources, different weightings of underlying data points. We underweight self-reported data from companies, because we believe that there’s a lot of issues with lack of standard reporting. We try to prioritize what is going to let us assess the impact of a company or fund, on whatever cause the investor cares about.
Measuring the Impact of ESG Investing
That makes sense. When I approach people about ESG investing, there’s three reactions. One, people say, “This is great, let’s do it.” Two, people say, “I don’t care about values in my investments.” And three, there’s people in the middle, who say, “This is interesting. I think I’d like to do this, but how will my investments perform if I take this approach?” Do you know of any statistics that show how ESG investments do relative to non-ESG types of investments?
There’s been a lot of studies on this over the last 30-40 years. I’m forgetting the actual name of the meta analysis, I apologize, but there was one that looked at about 1,500 studies over the last 30 years. It found that 90% of them did not find a negative correlation between ESG scores and financial performance. About 40% found a positive correlation, about 50% found a neutral or non-significant correlation and about 10% found a negative correlation. There’s more statistics out there, but I think you can’t make a blanket statement. It depends on what particular data you’re using for what particular industry.
For example, if you’re looking at environmental data for an energy company, you have to consider materiality. Ratings are going to be most material to a company’s financial performance. If you get to that level of detail, then I think you can draw some interesting conclusions, but it is hard to draw any blanket conclusion.
Is there a way to measure the impact of ESG investing on values, like climate change?
Yeah, that’s a great question. We look at data and try to equate it to some kind of real-world metrics, like fewer cars on the road or fewer miles driven. It can seem very indirect at times, but you are really having an impact on a company’s performance through making investment selections.
Back to how Ethos ESG filters companies, what happens if a company falls on both sides? Let’s use energy as an example. What happens if a company is into oil, but also an enormous investor in clean energy as well. Do they automatically get excluded because of what they’re doing with oil?
Well it’s not just a straight exclusion or inclusion. Within one category, such as environmental, there’s a distribution of impact across causes or issues. So an oil and gas company could have a negative impact on the environment, but maybe they treat their employees really well, or have an incredible governance structure. At Ethos ESG, we try to show the full distribution of impact across causes.
Values-Based Investing Across the Entire Political Landscape
When I initially introduced the topic of ESGs, I talked about the politically charged climate we’re experiencing right now. Are there opportunities for values-based investing on both sides of the political aisle?
Yes, definitely. We are apolitical, so we offer more faith-based screens or things that would be more so on the conservative side of the political spectrum. We’re trying to enable values-based investing, no matter what those values are.
Great. You mentioned the optimizer. Can you go into a little more detail on how that works?
Yeah, definitely. It’s designed to maximize impact on the personalized causes that are most important to you, while matching the back-tested performance of some index or blended benchmarks. You can choose multiple indexes, while also fitting any other criteria you want – number of stocks in your portfolio, for example.
First, you select an index (or multiple) that you want to match the financial performance of in backtesting. Second, you set tax preference criteria, like if you’re trying to harvest tax losses or realize tax gains. Step three is really where Ethos ESG’s optimizer is different. It allows extremely personalized impact preferences. Out of the 45 ESG causes that we track, you can pick whatever number you want and rate from one to seven based on what’s most important to you. Then, we’ll rate every potential company and every potential stock in that index – or multiple indexes – on that mix of causes. We try to maximize the impact on those causes. We’ll also let you screen out things.
The optimizer takes that universe and then, based on the past 10 years performance, it tries to minimize the variance between returns for your model and returns for that index or blended indexes. You can set the threshold of that variance between the returns on the index and returns in your portfolio, to as tight of a variance as you want. So it’s matching the financial performance and it will iterate through many, many thousands of potential combinations to reach whatever criteria you’ve set.
We partnered with Morningstar to offer this optimizer at a really low cost. It’s a flat fee to start out, for financial advisors and wealth managers to use with their clients. It’s intended to enable people to create very personalized portfolios that match both values and the risk return profile they want.
Is it a subscription service for financial advisors and wealth managers?
It’s a flat, single price with unlimited usage. Financial advisors and wealth managers create as many reports as they want. There’s typically a 200-400 client limit within the base levels, but we can raise those levels. For an annual fee, the base levels are either $2,000 or $4,000/yr.
What to Look for in the Future of ESG and Values-Based Investing
What’s new in the ESG space? Where do you see things going?
I see the values-based side continuing to grow. When investors think about ESG investing, they’re usually thinking about financial risk mitigation more than thinking about the impact on things that they care about. I think there’s going to be much better information available for investors about the real impact, leading to better ways to take control of what they value.
I also think there’s going to be more regulation and requirements for reporting by companies and fund managers. This will really benefit investors. The more standardized reporting there is, the better decisions we can make about which companies are aligned with our values.
Makes sense. Well, we’re just about out of time. Luke, I want to thank you for being on the show. You gave some great info on how investors can allocate their money, based on their values. How best can someone reach out to you if they want to find out more information about Ethos ESG and what you do?
Thank you very much for having me. If anyone would like more information, reach out to [email protected] or visit us at ethosesg.com, and would love to have a conversation with anyone.
Great, we’ll link to all that in the show notes. Thanks again, Luke. And thank you to everyone who tuned into today’s episode. Don’t forget to follow The Agent of Wealth on the platform you listen from and leave us a review of the show. We are currently accepting new clients, if you’d like to schedule a 1-on-1 consultation with our advisors, please do so below.