How to bid for government contracts
When it comes to running a successful business, one of the most important things you can do is to learn how to seek out rich opportunities that can lead to rapid growth or potential long term partnerships down the road. One of the best ways to accelerate your business’s growth is to bid for government contracts.
With the right skills and knowledge, you can get your business involved in some of the most lucrative opportunities. The federal government is always looking for companies that can provide goods and services at a lower cost or more efficient manner.
Why contract with the US federal government?
The US federal government is the largest single buyer of goods and services in the world, spending over $500 billion each year. That’s a huge potential market for businesses of all sizes, and there are many reasons to consider seeking out government contracts:
The government is a stable customer who can provide a steady workstream. Not only that, but unlike many other customers, US government contracts often have built-in protections for the contractor, such as payment even if the project is delayed.
The government does extensive background checks on contractors before awarding a contract, so you can be sure that your organization is ready. If you’re a smaller company, don’t be put off. The federal government must award contracts to small businesses, so if your business is classified as a small business, you may have a leg up on some of your larger competition.
Where to find government contracts
There are many ways to locate potential federal contracts. We cover these in full in our article How to Become a Government Contractor, but you should begin by registering with the General Services Administration (GSA) and on SAM.gov.
This will allow you access to the government’s system for awarding contracts, and you’ll be able to search for opportunities that fit your business.
If you want to be part of a large contract that alone you could not fulfil, you can look at the options for becoming a subcontractor. You can find a directory of these on the GSA site, but you should also check out SubNet to see a range of opportunities for your business.
You will need a NAICS number to become a government contractor. There are many other legal requirements to be eligible. Check out our article for full information on becoming a government contractor.
How to bid for government contracts
There are a few key things you need to know to be successful when bidding for government contracts:
1. Know the market. The first step is to research the government contracting market and identify opportunities that match your business’s strengths. The best way to do this is to use a government contracting database, such as the ones offered by the US Small Business Administration or the Department of Defense. You will see Requests for Proposals (FRP), which announces a project, gives the appropriate detail regarding the objectives and outcomes expected, and solicits bids from qualified contractors.
2. Know the rules. The federal government has a complex set of rules and regulations that govern how contracts are awarded. Make sure you understand the basics of the Federal Acquisition Regulation (FAR) before you start bidding on contracts.
3. Put together a strong proposal. When you’re ready to submit a proposal, make sure it is clear, concise, and persuasive. Your proposal should demonstrate why your business is the best choice for the contract. Understand that simply being the cheapest bid will not guarantee success. For example, if a department is planning on having a complete cybersecurity solution installed throughout a premise, Cisco, a world-renowned provider of IT solutions and the backbone of the internet, is far more likely to be awarded the contract than Sony, which creates a suite of fantastic technology but is not known for IT solutions.
4. Get help. Bidding on government contracts can be a complex and time-consuming process. If you’re not sure where to start, many resources are available to help small businesses, including the Small Business Administration’s Office of Government Contracts.
Sources Sought Notice (SSN)
Keep an eye out for a Sources Sought Notice (SSN), an initial posting by a federal agency to get information about potential contractors who can provide the goods or services they need.
At this stage, the government is not asking for bids but wants to know about businesses that might be able to do the work. An SSN is an excellent way to get your foot in the door with a particular agency. Essentially, the government is stating, “We want to do X; if we were to go ahead, who could make that happen?”
While SSNs are not solicitations for proposals, they can give you a good idea of what the government is planning to procure soon while allowing the government to strategize how they want to approach implementing the desired project. For your business, responding can potentially put you on the map with the right people, improving your chances of achieving any subsequent contract announced following the SSN.
How to win government contracts
To win a government contract, first, you need to bid on it. Here is the step by step on how to do this.
Find the contract your business could complete. You can look on the Government Procurement website to determine which contracts are available and when they close. When you have found a contract, read the request for proposal (RFP), Request for Quotations (RFQ), Invitation for Bids (IFB)
Make sure you understand what the government is seeking. The invitation will also tell you how to submit your bid. Do not make the mistake of bidding on a contract that is only partially a match for the services your business provides or is too big for you to handle. Offers are not accepted blindly, so make sure that any contracts you bid on match your business interests well to ensure the best chance of success.
Check the submission guidelines and follow them precisely. The government is very specific about what they want and how they want to receive it. Please make sure you include everything required and submit it by the deadline. If your bid is not complete or arrives late, it will be disqualified.
You will be competing against other businesses for the contract, so make sure your bid is competitive. Research what other companies are charging for similar services, make sure your offer is lower or equal to theirs or show that additional benefits would come from working with you. The government is looking for the best value, not necessarily the lowest price.
Once you have submitted your bid, all you can do is wait. The government will review all of the bids and award the contract to the business they believe will provide the best value. If you are not awarded the contract, you can try again next time.
If the idea of completing the required responses is too daunting for you, this task can be subcontracted out to freelancers and agencies that specialize in completing such information. Alternatively, seek guidance from the SBA.
Help for small businesses bidding on government contracts
The government is required to award 23 per cent of its prime contracts to small businesses. If you are a small business owner, this provides you with a great opportunity to get involved in federal contracting.
Within that allocation, funding is set aside for Women-owned, service-disabled veteran-owned, Native-American, LGBT, and minority-owned businesses and businesses operating in HUBZone areas.
The government uses a two-step process to award small businesses contracts valued at over $150,000.
In the first step, interested firms submit capability statements to the procuring contracting officer (PCO). The PCO will then invite the firms that appear to be the best match for the requirement to submit a proposal in the second step.
The government uses the North American Industry Classification System (NAICS) codes to identify small businesses. These codes are used to track industry data, and they vary by size standards.
The key to winning government contracts is understanding the process and being prepared. By doing your research, you can identify opportunities that are a good match for your business.
Once you’ve found a contract you’re interested in, make sure you understand the rules and regulations that govern the contracting process. The Federal Acquisition Regulation (FAR) is an excellent place to start.
When you’re ready to submit a proposal, put together a clear, concise, and persuasive document demonstrating why your business is the best choice for the contract. Remember that being the cheapest bid is not always the best strategy.
Finally, seek out help from resources like the Small Business Administration’s Office of Government Contracts. With the proper preparation, your business can successfully bid for government contracts.