Federal Government Contracts

Find Your Next Customer Here

The US Government is the worlds largest customer. Government contracts have exceeded $400 Million since 2006. While many of us are aware of that the US Government spends a lot of money, there is often a misconception that this spending is on high powered jet aircraft, building and maintaining government facilities or other similar type of projects that none of us could ever be a part of. The facts is that the government purchases a wide range of goods and services. These purchase ranged from under a couple thousand dollars to those multi-million dollar contracts. The other little known fact is the US Government has policies in place to ensure that nearly 25% of the contracts they award go to small businesses. 

What does this mean for your business? You spend time, money and energy to obtain new customers or clients. You may have commercials on television and radio, you may run pay per click campaigns or you may spend hours and hours at networking events trying to develop new business opportunities to grow your business. You do this without knowing that your biggest customer or your newest customer will never see your marketing materials or shake your hand at a local chamber luncheon. You can win government contracts and provide your goods or services to the US Government.

What Is A "Small Business"?

The US Government has asked the US Small Business Administration to set the standards for what businesses qualify as a "small business" under the government contracting standards. Most businesses qualify as a small business under these standards. The standards vary not only from industry to industry but also many industries are broken down into specific functions. The standards are based on either annual revenue or number of employees. If the industry standard is based on number of employees generally under 500 employees will make you a small business. If the industry standard is based on revenue and you are under $15 Million in annual revenue you will qualify. These are not hard fast rules and some industries are under these numbers and others can go over 1500 employees or over $30 Million in revenue.

Special Categories

The US Government goes beyond just making an effort to award contracts to small businesses. They have goals for awarding contracts to specific demographics inside the the small business standards. These are based on ownership of the business or the location of the business.  These categories include:

• Women Owned Businesses;
• Socially Disadvantaged Owned Businesses; 
• Disabled Veteran Owned Businesses; and
• Businesses Located In a HUBZone.

If your business meets one or more of these qualifications there may be specific US Government contracts available for you business to bid on.

How To Bid For Government Contracts

Types of Contracts the Government Needs

There are different types of federal government contracts. Not only does the government contract out for a wide range of services but there are different ways the government buys. Here are a few of the common ways the federal government buys from small businesses. You can see that these are very similar to the way typical customers would buy your goods or services.

• Credit Card Opportunities - 70% of government procurement is through credit card purchases under $3000.
• Simplified Acquisition Procedures - Contracts under $150,000 do not require a formal bidding process
• Sealed Bidding - This is a very formal process where invitations are sent out and businesses submit bids
• Contract by Negotiation - typically a complicated process where a request for proposals is made and responses can be negotiated
• Consolidated Purchasing - this when multiple federal agencies with common needs will negotiate contracts with many potential vendors to fill government wide needs

How To Win
​Government Contracts

The first step to winning contracts from the federal government is to get in the game. You will lose 100% of the contracts you never know about. If your business doesn't get started with making itself available for government contracts, searching for government contract opportunities or soliciting the federal government for contracts, you will never find a government agent knocking on your door looking to hire your business.

The next step to winning government contracts is to make sure you follow the appropriate protocols and provide complete information. The government agents are not going to chase down small business that provide incomplete bids or don't follow the rules that are set. They will simply move on to the next small business that has done it the right way.

The final tip to winning government contracts is to follow the rules after you win a contract. The government is highly regulated when it comes to spending money. There are plenty of ways for you to not only lose a contract but not be permitted to obtain government contracts in the future. 

Where Do You Get Started On Government Contracts

There are some very basic things you can do to get start.

1. Define your products or services - many contract opportunities are organized by the category or categories of goods or services the federal government needs
2. Register on the System for Award Management - this where the government looks for potential vendors
3. Prepare you pitch - the federal government is similar to any potential customer and they want a comprehensive - yet concise  - pitch on why you are right for the job
4. Search for Open Opportunities - the government maintains an online database of contract opportunities that you can search and then try to win
5. Subcontract - if you find a prime contractor, you can solicit to be a subcontractor for them
6. Market Directly to the Government - this is just like selling to a new customer
7. Signup For a Leads Service - there are companies out there that will provide you notice when potential opportunities come available

This Seems Overly Complicated - Why Would I Want A Government Contract?

The reason this seems complicated is because it is different from what you are used to. If we took a business owner from a different Michigan small business and told him to run your business, the different owner would probably struggle at first until he grew accustom to how things work in your business. Government contracts are very similar. Its an entirely different market that most small business owners need to adjust to. Putting the right systems in place and over time you will grow accustomed to all the business opportunities you never knew existed.

The federal government has some strict guidelines that they have to follow. These can be intimidating but they mostly boil down to you are going to be perform the contractual obligations you promise to do in a manner that you promised to do them. If you run your business in a manner where you are unreliable and have trouble adhering to contractual terms, then government contracts may not be right for you. But for most small business owners, delivering on our promises is just another day's work.

The biggest payoff in working with government contracts is the federal government will likely be the best customer or client you have. Not only do they pay under the terms of the contract on time, but they are not going to be burdensome by calling you constantly for updates on progress or griping about the price after you have delivered. As a small business owner its not uncommon to run into customer or clients that are just more trouble then they are worth. The federal government is machine-like and if you do what you are supposed to do, its going to do what its supposed to do.

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