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August 5, 2024 44 mins
@DavidPackouz‬ was a successful arms dealer, as depicted in the movie War Dogs. We talked about his journey from government contracts to his inventions and more.

➡️Connect with David Packouz Instagram https://www.instagram.com/davidpackouz War Dogs Academy: https://wardogsacademy.com

➡️Connect with #BertMartinez: Twitter - https://twitter.com/BertMartinez Instagram - https://www.instagram.com/TheBertMartinez Facebook - https://www.facebook.com/bertmartinezfans

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Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
At the beginning, you were explaining how you were under
house arrests for seven months. Why don't you quickly give
our audience how you ended up under house arrests and
then we can talk about war Dog Academy.

Speaker 2 (00:13):
So yeah, let's talk about that. Sure.

Speaker 3 (00:15):
So for people who don't know me, I well, my
name is David Packouse and nice I got I guess
famous slash infamous depending on your opinion, for being the
subject of a film called war Dogs that came out
in twenty sixteen. In the movie unplayed by Miles Teller,

(00:37):
he portrays me. In the film, Jonah Hill portrays my
ex partner. The movie was It was directed by Todd Phillips, who,
before War Dogs made the Hangover trilogy and after war
Dogs he made The Joker with Joaquin Phoenix. So war
Dogs was kind of his transition from comedy into drama. It's,
you know, ironically, Joker doesn't have many jokes in it,

(01:00):
if any. I don't think I laughed the entire movie,
but I did cry.

Speaker 2 (01:06):
It's a pretty serious subject.

Speaker 3 (01:08):
Yeah, it's a pretty sad, depressing movie. Powerful, great movie.
Shout out to Todd, But yeah, he did a fantastic job.
With it, but it is, but it is not a comedy.
And so War Dogs is kind of a dramedy. They
call it. It's half drama half comedy. So it was
his transition film. But what the movies about is when

(01:28):
I was in my early twenties, I'm now in my
early forties. I'm forty two, so about a little under
twenty years ago. It makes me feel old to say that.
When I was in my early twenties, I got into
business with a ex friend of mine doing government contracting,
and that means just pretty much selling stuff to the

(01:50):
US government. We ended up specializing in arms and ammunition
in small arms. And this was back in two between
two thousand and four, in two thousand and eight, so
this was during the height of the Iraq and Afghan Wars,
right after the United States invaded Iraq and Afghanistan and
they were looking to you know, they bombed the people

(02:13):
there and the government's there and decided to build up
a democracy, or the goal was to build a democracy
in those countries. And so part of that they had
to build a functional army and police force, and they
needed a lot of weapons and ammunition and various other
equipment to do that. And so the way the government
buys things is they post on a website nowadays it's

(02:36):
sam dot gov like Uncle Sam sam dot gov, and
they posted what they want to buy, and then everyone
who is registered with the government and qualified to bid
on this can submit their best offer to the government.
Then the government looks at all the offers they have
and they give each one a score depending on price
and reliability and delivery time and quality and various other

(02:57):
aspects that they care about, and then they pick the
winner award them the contract. That company gets to deliver
on that contract and collect their profit margin. So my
partner and I we were, you know, a couple of
early twenty year olds, and he he learned it from
his uncle had to do this, and then started his
own company, started bidding on He was a gun nut,

(03:19):
so he knew the gun industry pretty well. Started bidding
on AMMO and small arms contract with the federal government,
started winning a bunch of them, started doing really well,
and then I joined him and eventually we won a
three hundred million dollar contract. And this was a contract
was one of the biggest small arms contracts ever. And

(03:42):
we won this contract to supply the Afghan National Army
with all their munitions, you know, everything from pistol ammo
up to like tank rounds and anti aircraft.

Speaker 2 (03:52):
Wow, that is huge.

Speaker 3 (03:53):
It was enormous. Yeah, it was a massive contract. And
during that delivery of that contract, we discovered that some
of the ammunition that we were planning on delivering that
was coming from Albania had originally come from China, and
our contract specifically said we couldn't deliver anything from China

(04:16):
because there was an arms embargo. There still is an
arms embargo against China by the United States that was
put in place in nineteen eighty nine because of the
Tianaman Square massacre. So the but the AMMO that we
were buying from Albania had originally come from China in
the seventies before the embargo, so it was technically not
violating the embargo, but our contract specifically said no Chinese

(04:39):
ammo period, didn't mention the embargo. So at the time
we thought, well, you know, we could tell them about this,
but then they might take the contract away from us
because we're not fulfilling the terms of the contract. And
we decided not to risk losing our three hundred million
dollar contract, and we made the fateful error of deciding

(05:02):
to have it repackaged and to hide the fact that
it was Chinese ammunition. So we hired some Albanians to
repackage the ammunition and put it into cardboard boxes, remove
all the Chinese markings from the packaging, and deliver that
and turned out actually the Army was totally fine with it.
We found out later in court because there were emails

(05:22):
that were released during the discovery process that the US
Army knew the entire time it was originally from China,
and so did the State Department, because actually, anyone who
knows the history of Albania would have known this, which
we did not. We were like in our early twenties,
We didn't know anything about Albania. But you know, the
State Department, the embassy in Albania obviously did they knew

(05:44):
the history of Albania, that Albania was an ally of
China during the Cold War and got most of their
munitions and weapons from China. So they were well aware
what we were doing, but they didn't really care because
the amma was high quality and they were getting a
very very good price for it price they possibly could,
which is why we won the contract, and so they

(06:04):
kept on taking delivery on it for like a good
like nine months, and then the New York Times published
an article about us, and the way they found out
about it was that my former partner decided to save
he wanted to save some money, and fired the guy
who was doing the repackaging for us, the Albanian guy

(06:24):
who was changing the packaging, and he hired someone else,
and that guy got stuck with twenty thousand dollars worth
of boxes that he wanted us to pay him for.
My partner decided he didn't want to pay him for that.
That guy got really mad for losing twenty thousand dollars
and he told the New York Times what we were doing,
and so the New York Times Open Investigation eventually published

(06:47):
a front page article about us that was not very flattering,
had our mugshots on the front page next to a
picture of rusty looking AMMO, and the implication was that
we were delivering low quality AMMO, which was not true. Actually,
like ninety nine nine nine percent of the AMMO was
one hundred percent fine. We did deliver a very small

(07:07):
quantity of AMMO that had been corroded, but the Army
didn't pay us for it. They rejected it. And that
was the stuff the New York Times managed to get
a picture of and put on the front page of
the New York Times, which made us obviously look very bad.
And so the Army, because of all the political scandals
surrounding it, canceled our contract, and the Justice Department charged

(07:30):
us with fraud, that we defrauded the United States by
lying to them about the origin of the AMMO and
repackaging it to hide it. However, you know, usually in
fraud cases, restitution is based on the loss of the victim.
So and in this case, the Army not only didn't
lose any money, they saved quite a lot, quite quite

(07:52):
a lot of quite many millions of dollars by buying
this stuff, so there was no loss to the victim.
So Ephraim, my former partner, managed to keep vast majority
of the money. He decided he didn't want to pay
me any of it because he's, you know, a greedy asshole.
And and yeah, you know I got I ended up

(08:13):
going broke to you know, paying lawyers to keep me
out of prison. Ended up in Luckily I avoided prison.
My lawyers were good and and they I wasn't really
a target, you know, they really were just going after
reform at that By the time they charged us, I
had been out of the company for like a good
nine months because he told me he didn't want to
pay me. So I'm like, obviously, I'm not going to

(08:33):
continue working for you, and I'll see you in court.
I was planning on suing him, and then they charged
us with fraud, so I was. I ended up doing
just seven months of house arrest. I got very lucky
didn't do any prison time. And while I was under
house arrest, as I mentioned before, I had the idea
for the beat Buddy, which was the first product for

(08:54):
my company's Singular Sound. Since then, we've come out with
six other music related products as well, So this is
just was just the first in the line of musical
products for anyone who's curious about our You know, there
are any musicians out there, which tend to be about
one percent of the population, so it is a very
small market. But if there's any musicians out there who
are interested in really innovative music tech products, check out

(09:18):
singularsound dot com. Singular Sound we have not only we
made the beat Buddy, which is the world's first drum
machine in the form of a guitar pedal. We also
made the world's most advanced looper pedal, which allows you
to be like a one man band. You can can
record all the music you make and play it back
in loops and add layers and song sections. Yeah, and
it talks to the beat Buddy electronically, so it keeps

(09:42):
all the loops in time to the beat. So it's
a pretty pretty sophisticated device. And we've made a few
other products as well. I'm not going to bore the
ninety nine percent of people out there who are not
you know, potential customers for this, but for the people
who this sounds interesting, check out singular sound dot com.
That's that's my The beat Buddy actually came out. We

(10:05):
delivered it to the first customers just a little under
ten years ago, so this September is going to be
our tenth year anniversary. So yeah, it's been quite a journey.
And yeah, and we just delivered instaflaws for the first
time just like three four months ago, so that's been,
you know, a long journey. As I said, we've been

(10:25):
working on that for about five years, so that that's
very exciting, our first mass market invention that that we
came out with. And these days, as you mentioned, I
just recent literally a month ago, just started a new
company called war Dogs Academy. And the way this one

(10:46):
came about and what it is is it's to teach
people how to do government contracting, how to you know,
learn the system and did it on contracts. And the
way this particular came the thing came about was ever
since the movie War Dogs came out, I've had a
lot like literally hundreds, if not over a thousand. Oh
did I lose you? Oh there you are as you

(11:08):
just switch to the website. Okay, cool, Yeah, I saw
something change. So yeah, So as you can see on
the website, there's ever since the movie came out, I've
had hundreds, if not more than a thousand people contact
me like asking me how to do government contracting. And
I used to work as a massage therapist. That's why

(11:28):
I've had little clip is in there, so it's part
of the story if you see the movie. So yeah,
so I've had lots of people asking me to teach
them how to do this. But of course I'd been
banned from doing government contracting for about fifteen years, and
so I thought maybe my information wasn't the most up
to date, and so I wasn't really comfortable teaching people

(11:52):
how to do this because I hadn't done it in
so long. But then about nine months ago or so,
I had a guy contact me out of the blue,
guy named Logan, and he told me that that six
years prior to that, him and his partner were twenty
one years old and they were dead broke working picking

(12:13):
bananas on a farm. Actually they were doing wow, yeah,
they were doing literally they were doing agricultural labor, you know,
and dead broke. And the farm had a movie night
and one of them and the move. One of the
movies they played was war Dogs, and they thought to themselves, man,
these guys are our age in the movie. If they

(12:35):
can do this, why can't we do this? And they
threw themselves into it. They got obsessed. They worked on
it for like a good, you know, year before they
I think they won their first contract actually in like
about three months, but they got really that first contract,
they didn't make that much money. And then eventually they
within a year they actually had a viable business. And

(12:56):
then six years later nowadays they have a multimillion dollar
government contracting business. And they are, they're multimillionaires. They're doing
very well. They're flying all over the world taking care
of contracts. They ended up specializing in laundry services out
of all things.

Speaker 2 (13:10):
Oh interesting.

Speaker 3 (13:12):
Yeah, So people think that because I was selling arms
and ammunition that that government contracting is all about the
arms business. It's not at all. That's a tiny fraction
of it. The US government spends about between six and
seven trillion dollars every single year. Yeah, it's insane. The

(13:32):
defense budget alone, the Pentagon's budget is about eight hundred billions,
almost a trillion dollars, and they're spending this every single year,
and they buy everything. They're not just buying weapons and ammo.
They need to buy uniforms and boots and food and
vehicles and fuel, and laundry services and janitorial services and
landscaping services and real estate. And the government literally buys

(13:57):
everything because it's an organization with millions of people working
for it based all over the world. They've got I
think army bases in something like forty to fifty countries
and they have to support all that. And you know, you,
an army doesn't just need bullets and guns. It needs
all the other things. And the soldiers need to eat,

(14:19):
they need transportation, they need entertainment, they need air conditioning,
you know, they need all these other things to support them.
And so the way the government buys everything through the
government contracting systems. So if you know how to do
government contracting, you can sell literally anything to the US government.
And they're constantly buying new things. And they're the most

(14:42):
reliable customer in the world because they're never going to
go bankrupt, right, They're never going to run out of money.
You know, they're the ones who literally print the money,
so money. Yeah, if you know, if they run out
of money, then we're all in trouble because all our
money is worthless. So they're going to be the last
ones to go bankrupt. So the most reliable customer in
the world, biggest customer in the world by literally everything,

(15:06):
and so the the opportunities for businesses are enormous. One thing,
so one thing people always ask me, you know when
when talking about Wardog's academy, they're like, oh, if this
is so much money, why are you teaching other people
how to do it? You know, why did you just
grab it all yourself, you know, you know, it's so
you know, difficult to learn and you know, so and

(15:28):
what people don't realize is that the federal government puts
out thirty thousand contracts every single day, every single day,
you know, thirty thousand, which means that it's not even
physically possible to look at all them, let alone work
on them, let alone win them. It's literally impossible.

Speaker 2 (15:50):
So well, not only that, but you can't be the
jack of all trades. Yes exactly.

Speaker 1 (15:58):
So, like these guys specialized and laundry service. After specializing
an AMO, it's completely different.

Speaker 3 (16:05):
And completely different. Yeah.

Speaker 1 (16:07):
It also takes time become an expert and be able
to know the lingo. So yeah, it would be you know,
it would be crazy to think that you and I
and whatever right go through, you know, become good at
thirty thousand different items every day in the industry.

Speaker 3 (16:24):
Yes exactly. So yeah, So what I tell people is
is usual if you have a specialty already, if you
you know, know laundry services, for example, then bid on
laundry contracts. If you know, if you have a connection
for a particular product or you know a particular industry,
then look for those first, because you already have some knowledge,
you might already have some connections. It'll be less work

(16:45):
for you to gather all the information that you need
to bid on those contracts. But if you don't have
a specialty, if you're starting literally from scratch, then you could,
you know, just throw things at the wall and see
what stick. And that's what my former partners did. They'd
never done a laundry service contract before in their lives.
They've never been in the laundry business. They never owned
a laundromat. They just bid on a whole bunch of

(17:07):
random things. They happen to get lucky and win this
little laundry contract, and then they use that laundry contract
to win more laundry contracts, and now they have a
massive laundry government contracting business. Because the way the government
works is for contracts under two hundred and fifty thousand dollars,
you don't need any previous experience, right, so you brand new.

(17:29):
You can be brand new to the game. You could
have never done business in your life, and you could
still win a quarter million dollar contract up to a
quarter million dollar contract with the federal government. And once
you have a few of those, then you qualify to
bid on the bigger contracts, then you could bid on
multimillion dollar contracts. So once you have you build up

(17:50):
what they call that past performance, that experience, you go
up the value up the ladder in the in the
value chain. So that's why I always encourage people to
you specialize in something because not only is it going
to be easier for you, it's going to take less
work because you've already done a lot of that research
and a lot of those making those connections in previous contracts.

(18:11):
But you're also going to be building up past performance.
You're going to be building up proof to the government
that you could handle bigger contracts, and that puts you
in a position where you could win life changing side.

Speaker 1 (18:22):
Money on Yeah, so on the three hundred million dollar
contract that you guys had, what was your profit on that?
If if you would have fulfilled the entire thing, what
would have been your profit on that?

Speaker 3 (18:33):
So we initially bid it at a nine percent profit margin.
And the reason we did that is because we figured
that everyone else was doing ten percent, and so we
just wanted to undercut them just in case. In retrospect.
We beat the next people by quite a lot more
than one percent. Uh, so it was you know, we

(18:54):
probably could have bidden at a higher rate. I think
it is actually in the movie. We found out in
real life too, that we were about fifty two million
dollars under the next bidder, so we could act on
a few you know, at least a few million, if
not a few tens of millions, and still won that contract.
But of course you don't know what your what your

(19:17):
competition is bidding. It's illegal for the government to tell
you what your competitors are bidding at. For obvious reasons,
they want to get the lowest price, and so they
don't want you to know how you know what the
competitors are bidding it at. But once you win the contract.
Once we won the three hundred million dollar contract, what
we did is we kept on looking for new sources.

(19:37):
And you know, you don't just stop looking for sources,
You're constantly looking for new ones. And so we would
find new sources and then we would also renegotiate with
the original sources. We'd tell them things like, you know, hey,
we got this new source. They're giving us a better price.
Do you want to you know, be more competitive on
your on your price, So that we still go through you,

(19:57):
and through that whole process we managed to knock off
another ten percent. So we're on average making about twenty
percent profit margin. And so if we had delivered the
full three hundred million, we would have pulled in about
sixty million in profit.

Speaker 2 (20:12):
Nice. That's excellent. And so I did see the movie
and it is.

Speaker 1 (20:17):
I think it's available on Netflix if you guys want
to catch it there seeither Netflix or Amazon.

Speaker 3 (20:22):
Yeah, it's going to be leaving Netflix soon. So okay,
it keeps its coming on and off on that oh
does it?

Speaker 1 (20:28):
So it's it's it's it's entertaining. Congratulations, you're in the
movie that opening.

Speaker 2 (20:34):
Scene, you know, that's right. Yeah, cameo you got a
cameo there, which is nice.

Speaker 3 (20:40):
Yeah.

Speaker 1 (20:40):
And also this is kind of cool too because if
this is accurate, So you've already mentioned your you were
massage therapist, that's in the movie.

Speaker 2 (20:50):
And then were you trying to sell Lennen to assisted
living centers.

Speaker 3 (20:56):
Or was it that part is true too.

Speaker 2 (20:58):
Okay, so back to your entrepreneurial spirit.

Speaker 1 (21:01):
Yeah, I mean, you know, massage therapy, lenens to assisted
living you know bns uh music dental.

Speaker 3 (21:09):
Oh yeah, I mean I've There's quite a few other
things I've done as well, but that aren't in the
movie that to cut it for time, I was also
selling SD cards on eBay. You know, I used to
have a garbage collection business when I was a kid.
Uh so, yeah, I mean there's a lot I've done.
I've been on an entrepreneur since I was like six
years old. I think was my first business it is
the garbage collection business. I would take the neighbors trash

(21:31):
out for them, like uh and and charge them a
quarter a week for the service. So so that was
my first in an apartment building, right right, that was
my first business. I spent it all on ice cream,
of course. Yeah, but but it was worth.

Speaker 2 (21:47):
It all right, So okay, So okay, So here we are.

Speaker 1 (21:50):
It's war dog Wardogs academy dot com. Correct, War dog
Wardogs Academy dot com. I'll put all these links in
the in the show notes. So I go there, I
go through the course. What can I expect?

Speaker 2 (22:05):
Uh, you guys walk me step by step what I
need to do?

Speaker 1 (22:09):
And okay, and so, uh what kind of time frame
am I looking at it? If I'm if I if
I commit to this, like logan and the and the
other guy did James James? Okay, so do you have
any kind of time frame? I mean as far as like,
if I do, if I start bidding on contracts every day,

(22:29):
I going to you know, obviously you don't know, but
theoretically it's going to take you a year or two.

Speaker 2 (22:35):
What's your time? What do you got? So?

Speaker 3 (22:38):
I will say, on average, I think if you if
you really commit to it and work your ass off
and uh, you know, do it full time, right, I
think it's very reasonable to win your first contract within
ninety days. I think it's very reasonable. I my first contract,

(22:58):
I want about six weeks in, so I guess a
bit about half that. I think I got a bit lucky.
I mean I worked my ass off too. I worked
very hard. You know, there were times when I was
working eighteen hour days.

Speaker 2 (23:11):
You know, there was no wait, wait, wait, back up.

Speaker 1 (23:14):
So when you're saying you're working eighteen hour days, you're
you're you're bidding eighteen hours a day.

Speaker 2 (23:19):
So there is your work day.

Speaker 3 (23:20):
Right, right, So there's a there's different aspects to the process, right.
The first thing you need to do once, Okay, So
when you're first starting out, you need to create. If
you don't have a company, you have to register a company.
You have to get your registration with the federal system.
You know, you register your company with the federal system. Well,
another thing people ask me often is if you need

(23:43):
to be an American citizen or an American resident to
do this, and surprisingly you actually don't. You can register
a foreign company with the federal system and bid as
a foreign company on federal contracts unless you're in like
one of these embargoed countries like Iran or North Korea
or Russia these days, but most countries, you are eligible

(24:05):
to register your company with the with the federal system
and you can bid on federal contracts. Once you have
all your registration done, then you can. Then you start
looking at sam dot gov and you start identifying what
are contracts that you are likely to win, and we
go through all those criteria and how to identify that

(24:26):
in the course. So there are certain contracts that you're
never going to win because you don't qualify, you know,
Like I mean, just for an example, there's contracts they
call soul source contracts, which means literally that they're only
putting they legally required to post it on the site
but only one company is qualified to bid on it,
so they're giving it to that company, and they do
contracts like that, but like for things like the F

(24:48):
thirty five fighter jet, you know, like only Lockheed martin
makes that particular item, so you're not going to win
the contract for that. Only Lockheed Martin's qualified, right, so
they you know, you don't go for the sole source contracts.
Then you look at the other contracts, see what the
requirements are. If a particular contract requires a lot of
past performance and you don't have that past performance, don't

(25:10):
bother working on it because you're just not going to
qualify to even bid on it, right, even if you
have a great bid, you don't meet the requirements. Right,
So you don't want to waste your time. So you
identify the solicitations that the government posts on the website
that's a request for quote, you know, and you identify
the ones that you are that are possible for you

(25:32):
to win, and then you organize those as which ones
are the easiest to actually source, so you know, some
things are difficult to source, some things are easier to source.
There are certain contracts that ask you for twenty five
different items. That's obviously going to be a lot more
work than for a contract that's asking you for one
item but a large quantity, right, because you don't have

(25:54):
to deal with twenty five different sources. So you have
to kind of triage what what are the what solicitations
are the ones that you should be spending your time on.
Once you identify a few of those, you start well,
you read them very thoroughly so you make sure you
absolutely understand all the requirements. That's very important. And these

(26:16):
solicitations do tend to be between twenty and forty pages long,
so it's quite a lot of reading. It's not it's
I will not tell anyone that this isn't that this
is easy work, this is not. This is not a
get rich easy scheme. It's not. It is a get
rich scheme, but it's not get rich easy. It could
be quick. I'm not saying that that you know it's

(26:37):
going to take you years and years and years. There
are plenty of cases, including myself and my partners, where
they started making very serious money within the first year,
you know, very serious money, and so it's very very possible,
it's very very doable. There's no guarantee of it. Obviously,
because it is kind of like a casino. You know,

(26:57):
you don't know who you're who you're competing against. You're
going to lose a lot, So you're going to put
a lot of bids in there and you're gonna lose.
That's just part of the game. You know, nine out
of ten, I don't want to put a ratio on it,
but I'm just pulling this number. Nine out of ten
times very possible. You're going to lose. So you put
a lot of work and you get nothing for it.

(27:17):
But then that one time you win that contract you're
going to make, you could make more money, you know,
as so much money that it made all those those
times you lost worth it. So once once you read
through the solicitation, right you identify all the requirements, and
each particular solicitation has its own unique requirements and each

(27:38):
industry has its own quirk. So, for example, you know,
if you're supplying clothing, there are certain laws that they
refer to in the solicitation where you need to have
a certain percentage of the materials grown in the United States.
You know, a certain amount of the work to sew
the clothing needs to be done in the United States.
There's some transportation requirements you can only use you know, uh,

(28:02):
you know, if it needs to get from one American
port to another. There's there's I forgot the burying. I
forgot the amendment. It was the Jones Act. That was it.
You have to like ship it only on like an
American owned ship. You know. There's these really nitty gritty,
stupid rules. I call them stupid because they're annoying, you know,
but they were put in place there some politicians thought

(28:23):
it was a good idea at the time.

Speaker 2 (28:25):
Whether it's well, and this.

Speaker 1 (28:27):
Is yeah, well, and this kind of reminds me. For example, NASA, Yeah, NASA.
The first uh what do you call it? The first
word in NASA is national, right, isn't it?

Speaker 2 (28:41):
The national area? Okay? National? Meaning they're going to source
parts from nationwide.

Speaker 1 (28:47):
And one of the reasons they do that, politically speaking,
is because they can get all the senators on it,
you know, on board.

Speaker 2 (28:53):
Right, so the same things happening here.

Speaker 1 (28:56):
Uh yeah, they want you to source from all these
American forwards or parts or because it keeps American people
working and it's politically correct, so I can see that.

Speaker 2 (29:08):
But yeah, that's that's why they do it.

Speaker 3 (29:10):
Yeah, yeah, yeah, I mean there is there's obviously different elements. Uh,
there's different competing interests and all in politics, and JA
mean that's why politics exist. It's because there's different competing interests, right,
and that's kind of all of our negotiations, the political processes,
the negotiation between competing interests and so, yeah, there's there's

(29:30):
obviously the government wants to get the best price, but
the politicians want to have their particular home turf fully employed.
That those things sometimes conflict. Sometimes if you want to
employ a specific you know, you are to employ Americans
for a specific job, It's going to cost more.

Speaker 2 (29:47):
You know.

Speaker 3 (29:48):
Now whether that extra cost is going to be worth
it to the government, that's a whole debate. But from
a government contractor's perspective, you know, you you leave politics
out of it. It's not your business, right. You need
to just know how it affects you as a government contractor.
So you do need to read the solicitation in full.
Once you identify the items and you look at the

(30:10):
initial thing and make sure that you qualify to bid
on this, you read the thing in full, you identify
all the potential snag areas, identify any areas you don't understand,
which could be quite a bit, especially in the beginning.
You can get it all clarified from the contracting officer.
We also have hard war Dogs Academy is one of
I think one of the really cool parts of it

(30:31):
is that in addition to the course, you get access
to our community. So we have an online forum where
our students can ask each other questions and build business
connections network. But we also have a weekly live Q
and a session through video chat where the students can
ask myself, my partners. We also have a retired government

(30:52):
contracting officer who used to work for the government doing
the contract analysis and awarding, so she knows from the
government's perspective really well. And we answer any questions that
our students have, if they're struggling with anything, if they
don't understand anything in particular, we we give them advice
on that and explain things. So that's that's a really

(31:13):
a major value that we provide as part of war
Dog's Academy. And so once you understand the solicitation, you understand, uh,
you know all the requirements in detail. Now you are
set to find suppliers for that. Now the vast majority.
We're we're you could just bid on if you already
have a company. Let's say you already own a company

(31:35):
that manufactures chairs, right, I'm just picking that out. You
could just bid on those contracts, right, You could, you know,
bid your for the chair contracts, and you're going to
be well placed to do that because you you know,
as long as you're manufacturing in an efficient way, you know,
very few people are gonna be able to beat you
on price. Uh. But the vast majority of government contractors

(31:55):
are middle men, right. Uh, that's what we were. We
weren't manufacturing the or the guns. We just found sources
of suppliers. My partners don't own any laundry companies. They
just found companies that do those services. And they're just brokers.
And the vast majority of government contractors are this, and
the government is fine with that, and in fact, they
expect it. And the reason they're fine with brokers is

(32:18):
because oftentimes they'll want to buy things that they'll want
like a package of things, so they'll want like five
different items, and there isn't a single company that makes
all those items, so the only single entity they can
buy it with is from a broker, someone who's going
to go and find those items, and oftentimes you can.
There's even situations where you can find sources of supplies

(32:41):
that can be even cheaper than the original manufactured goods
because sometimes retailers, for example, will buy a whole bunch
of clothes and if they get stuck with it for
too long, they want to get the next season's styles
in and they're willing to sell their old stock at
below what they paid for it, so they're willing to
his money on it just to get rid of it,
you know, in the liquidation sales, so to speak. So

(33:04):
the bidding system allows the government to benefit from things
from situations like that. So there the government is totally
fine with with middleman brokers and they expect it, and
there's most of the business is done in that way.
So as a broker, you need to go find the
best all the suppliers, uh, so that you're competitive because

(33:26):
you're competing against other brokers, right, and you.

Speaker 2 (33:29):
Have no idea, yeah, and you have.

Speaker 3 (33:31):
No idea yeah, yeah, you could be the only person
bidding on this contract, in which case you could bid
it whatever you want and you'll win.

Speaker 2 (33:38):
Right.

Speaker 3 (33:38):
But most of the time you're not the only bidder
on the contract.

Speaker 2 (33:43):
Let me ask you this real quick.

Speaker 3 (33:44):
Yeah.

Speaker 2 (33:45):
Sure.

Speaker 1 (33:45):
So in the movie Uh Huh from uh is Uh,
there's a scene where he's pretending to be a government contractor,
right and and and so he's actually calling one of
his competitors, pretending to be in the military or whatever.

Speaker 2 (34:03):
The scene was saying, hey, I misplaced the paperwork. What
would you bid? So was that real? Did you guys
do that?

Speaker 3 (34:11):
I didn't do that.

Speaker 2 (34:15):
Very specific I did not do that. But okay, so
did that? Okay, yes that.

Speaker 3 (34:21):
I saw him do it multiple times, and it was
to me shocking how effective it was. I don't recommend
anyone do that. I don't know the legality of it.
It's definitely unethical at the very minimum.

Speaker 2 (34:33):
At the very minimum, and I mean think about it.

Speaker 1 (34:35):
If you if you pretend to be a military officer,
that's got to be legal.

Speaker 3 (34:40):
I'm sorry, I would imagine it is. I've never looked
at up. I've never looked up the laws as far
as that goes. I would imagine that it's illegal, you know,
impersonating a beneficial it just sounds like it's illegal. So
I don't recommend anyone do that. But he did do that.
And the thing that always blew my mind when he
would do that is that thing that always made me,

(35:01):
you know, I couldn't didn't understand why is that he
would never block his phone number when he would make
these phone calls. He would always use his own personal
cell phone. All people up and pretend to be like
government officials, and like I told him, like, hey, you know,
all they needed is a caller ID. And this was
back this was in two thousand and five, so before like,
but the cell phones were super common even back then,

(35:23):
just not the smartphones, uh, you know, and he just
didn't care. He was just like, you know, he was
very smart in certain ways and very very dumb in
other ways. You know, he like he didn't pay the
box guy. I told him to pay the box. I'm like,
this guy knows all our dirty secrets. Man, pay him
twenty fucking thousand dollars so we can keep this three
hundred million dollar contract. And he's like, nah, he's got

(35:45):
gonna he's not gonna do anything. Fuck that guy.

Speaker 2 (35:48):
You know, that guy located in Afghanistan.

Speaker 3 (35:51):
He was in Albania.

Speaker 2 (35:52):
He was Albania.

Speaker 1 (35:53):
So yeah, you could see somebody he's in Albania, what
he's gonna do, because what are the chances of an
Albanian now national calling the New York Times then picking
up the phone and going, wow, this sounds like.

Speaker 2 (36:04):
A good story.

Speaker 1 (36:05):
I mean, if you and I called the New York Times,
they probably wouldn't take our call much less right from Albania.

Speaker 2 (36:11):
So but but you know, to me, this is a
great example.

Speaker 1 (36:14):
You see this in business all the time, where somebody
is pretty smart in business, but they're socially an apt
or they're so greedy that they're greed.

Speaker 2 (36:23):
You know, for twenty thousand.

Speaker 1 (36:24):
Bucks on a contract that you might make thirty forty
fifty million dollars is nothing.

Speaker 3 (36:30):
It's nothing, you know, If.

Speaker 1 (36:32):
Anything, you should have paid the guy forty thousand bucks
to keep it the mouth shut right.

Speaker 3 (36:36):
Fuck, But I told him to do that.

Speaker 2 (36:39):
For twenty thousand bucks. You got seven months and he
got what he went four or five.

Speaker 3 (36:44):
He did four years in prison. Not he probably would
have gotten much less than that. But he committed a
second crime while awaiting sentencing for the first one, so
he invalidated his plea agreement. He pled guilds just like
I did. But while we were waiting to get sentenced.

(37:06):
He got caught up in a sting operation by the ATF.
He kept it. They told him to get out of
the of the arms business. He didn't listen. He kept
on doing the business. Eventually he got on the ATF's
radar and they set up a sting operation where an
undercover agent tricked him into picking up a handgun and
trapped him completely. But because he was already he already

(37:30):
pled guilty to the first thing, he was already officially
a fell in, and so fell in in possession of
a firearm can get you up to ten years in prison,
and so he could have gotten fifteen years total if
they really gave him a max. But he had the
best lawyers and they negotiated it down to four.

Speaker 2 (37:48):
Oh that's amazing, amazing, all right.

Speaker 1 (37:50):
So I didn't mean, I didn't did not mean to
go up on that tangent, but yeah, but it was
I just remembered that.

Speaker 2 (37:57):
So here you are.

Speaker 1 (37:59):
You start all these different bidding and like you pointed
out already, it seems like there's obviously a time that
you have to invest in. Reading these solicitations twenty thirty
forty pages long. I love the tip that you gave.
Try to stick to something you're already good at. Started
trying to reinvent the wheel. Apparently Logan and James got lucky.

Speaker 2 (38:21):
Hey, laundry service. That sounds good, let's do that.

Speaker 3 (38:23):
Yeah, yeah, yeah, totally totally off topic.

Speaker 2 (38:27):
Yeah yeah, And it kind of reminds off the wall.
Reminds me of Branson. Richard Branson.

Speaker 1 (38:34):
He always talks about if somebody gives you an opportunity,
even though you don't know what you're doing, just say
yes and figure it out later, because you never know.

Speaker 2 (38:42):
And so I'm a big believer in that.

Speaker 1 (38:44):
All right, So you're reading these things, and when you
were saying you were working eighteen hour days, I imagine
part of that is reading the solicitations, figuring out what
you can bid on, what you cannot bid on. And
then the other part of that day is sourcing the materials.

Speaker 3 (39:00):
Correct, So you want to find all the all the
all the sources for the contract. The more sources you find,
the more competitive you're going to be. And it's not
just sources for the materials. You also have to find
sources for the logistics. So you need to figure out
how you're going to transport it. Because the government says
they expect a delivered price, so they say, you know,

(39:21):
give us your best price delivered to this location. And
depending where it's coming from and where it's going to,
that could very significantly affect the cost of the transportation.
And of course, depending on the items, either may be
additional restrictions. If you're transporting you know, explosives, there's a
lot of transportation companies who won't do that job at all,

(39:41):
so or the ones that will, we'll want for insurance
and things like that. So you need to figure out
the transportation, and especially if it's something overseas, then you
need to call a lot of overseas companies, which is
why you know, I oftentimes work through the night because
I'm talking to Eastern Europe or to Central AI and
they're on very different time zones. Got to catch them

(40:03):
during their business hours, so yes, and I'm talking, you know,
asking contracting officer questions during the day, So I got
to be up during the day, and that's how I
would extend. There were there were I would say sprints
where I would do eighteen hour days. I wasn't like
doing eighteen hour days for years on end, but there
would be like a good like one to like when

(40:24):
we were working for the Afghan contract, I worked eighteen
hour days for almost like a month and a half
to two months. It was very Yeah, it was very hard.
It was very hard. I almost I really wore myself
out there. It was very very difficult. But it ended
up being worth it. Well not I mean not really

(40:44):
because I didn't end up having a penny, but it
would have been worth it because we we did win
the contract. But yeah, I mean that's it's now. The
thing is, because you're working for yourself, you don't have
to work eighteen hour days, right, You can work as
much as you can. And but of course the more
time you put it into it, just like anything and like, yeah,

(41:08):
the more time you put into anything, the more likely
you are to succeed at it. I don't encourage people to,
you know, to burn themselves out doing eighteen hour days
for too long. I mean, if you're if you have
a deadline and you if it's a big opportunity, then yeah,
go for it. Do those eighteen hour days if you
could handle it. If you can't handle it, don't do
it because you're not going to be very successful if

(41:30):
you burn yourself out. So everyone has to find their
own uh you know, method and schedule of working. It's
different for everybody. Some people work really well with short,
very intense sprints. Some people work very well with just
you know, nine to five and that's it. Some people
can only do half days. I mean, it's it's really

(41:54):
you know, some people can work smarter and not harder.
You know that you could figure out a little uh
efficiency tricks to do more with less. So I'm not
saying that that you have to work eighteen hour days
and kill yourself, you know, in this workaholic kind of environment.
It is what we were doing back then for the
time critical stuff. But there's plenty of government contractors there,

(42:19):
you know, out there who were in fact, probably most
of them who work normal nine to five hours do
and do just fine. So you have to adjust it
to yourself and make adjustments because you know you're not
going to have long term success if you're burning yourself out.

Speaker 1 (42:33):
Well, that's one of the things that I liked about
your community because if you can tap into that community,
you might be to save yourself time by saying, hey, guys,
I does anybody have a lead on sourcing XYC material.
Also in your career you can say, look, I work
with these guys or work with that guy that also
just saved you maybe an hour three or five or whatever.

Speaker 2 (42:56):
Yeah, so that's a big plus.

Speaker 1 (42:58):
Absolutely, there's a lot of strength in having a community.
So uh, okay, war Dogs Academy dot com. That's where
everybody can go and check it out.

Speaker 2 (43:07):
You know.

Speaker 1 (43:07):
I love the fact that you were very sincere about saying, hey,
this is not you can get rich, but it's not
a quick rich scheme. It's it's like any other opportunity.
You could probably get rich on instaflows but you know, right,
you're right, but you know, think about it. You've already
put in five six years just getting that puppy going.
I mean so uh so it's like any experience, just

(43:32):
like any other business opportunity.

Speaker 2 (43:34):
Can you get wealthy at it?

Speaker 3 (43:35):
Yes?

Speaker 2 (43:35):
Are? You know most people don't. But maybe you can
make a good living at it. Uh you know.

Speaker 1 (43:41):
So there there's there's anywhere from from what do you
call it starving to being really successful and everything in between.

Speaker 2 (43:51):
So it's uh, it's it's there for you.

Speaker 1 (43:54):
So war Dogs Academy dot Com, instaflaws if you want
to save your teeth.

Speaker 2 (44:00):
Uh David, It's been such a blast having you on here.

Speaker 1 (44:03):
I I'm just impressed with everything you've done and and
uh so looking forward to have you back again on
your next uh on your next opportunity.

Speaker 3 (44:14):
Yeah, absolutely, I've already got a few in the works,
so uh so it might not be too long
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