How to Bid on Government Contracts

If you own a small business and have a service or product the U. S. government needs, but do not bid on their contracts, you may be selling your business short. The federal government is the single largest buyer in the world, and they love to spend their money with small business. On average, the government spends twenty-three percent of their contracting goals with small business. Ignoring this lucrative channel of business only stands to make money for other businesses.

Learning how government works in regard to small business is your first step in determining whether this is something you want to do. The following steps will guide you through the process.

Step 1 The Small Business Administration (SBA) has set business size standards based on how many employees you had in the last year or on your annual receipts from the past three years.  Determine the size of your business using this SBA chart and the classification of your business using the North American Industry Classification System (NAICS) on the U.S. Census Bureau site for a full downloadable manual. This is a very important step because the government requires you to certify your business size and classification.

Step 2 Becoming a government contractor requires a large commitment by you and your company to learn and follow the regulations, search for contracts, submitting bids and probably the biggest commitment of all, financial. When you submit a bid, you must be able to stand behind it with the money required to fulfill the contract. If you do not have enough money backing you are dead in the water before you even get started. Of course, you do not have to go to loan sharks for your backing, as long as you have good credit and a working relationship with your bank you should be able to set up a line of credit for events such as these. The SBA is also a good source in learn more about contracting and how to find financial backing needed.

Step 3 As with all companies marketing to the government is an important part of doing business with Uncle Sam. Getting your name out to the people who make the decisions is crucial if you want to beat out your competitors. The feds have rules as to how you market yourself to them and you will need to learn what the rules are to keep yourself and others out of trouble.

Step 4 Utilize the SBA when bidding on contracts. The SBA has a lot of helpful information they can pass along to you, whether you are a new business or are an existing concern. The SBA works closely with government agencies to help insure small business gets their fair share of the contract pie.

Step 5 Know where to go to find contracts. The Federal Business Opportunities (FedBizOpps) website lists all government contracts exceeding $25,000.00, where venders can find opportunities they may bid on. The procurement process for the government is simplified for smaller purchases between $3,000.00 and $100,000.00 are reserved for small business.  Purchases under $3000.00 are micro purchases and can be bought locally or ordered from companies elsewhere. There are, of course higher limits the government can use in extenuating circumstance such as terrorist attacks and other national, regional or local emergencies.

Step 6 Register you company at Central Contractor Registration (CCR) where contracting officials go to find qualified contractors

As a businessperson, you owe it to yourself to look into the federal contact world to see if you are a good fit. If you decide government contracts are not for you, take a look at being a sub-contractor for one or more of the contract winners.

Tip: Once you become successful with federal contracts, think about expanding out to state and local government contracts.

Reference: Small Business Administration

Please see related articles How to Obtain a SBA ARC Loan and How to Write a Business Plan

Comments (0)