Is It Hard to Win a Government Contract?
Regardless of the size of your business, having a government contract is a good long-term strategy to keep your business relevant and productive. But how can you win a government contract? While a government contract seems like an intimidating goal, it’s much easier than you think to craft a strategy to win a contract.
Is It Hard to Win a Government Contract?
Like any other type of bid to contract your business’s services and products, winning a government contract means striking the right balance between your pricing and business proposal. On the surface, it may seem like an impossible goal to win a government contract when you are competing against corporate giants. However, the federal government has policies that allow small businesses to remain competitive when bidding for government contracts.
For example, the small business administration (SBA) protects the rights of small businesses in the United States of America. As part of this organization’s goals, SBA partners with federal agencies to help small businesses gain opportunities in the federal marketplace. Some tips that can help you successfully win a contract from a federal agency can include:
1. Fulfill Government Requirements
To be considered for a government contract, your small business will first need to meet and fulfill the requirements all federal agencies have for potential contractors. This means that before you can bid for contracts, you must have completed all the steps to be part of the government contract industry.
For example, you must have registered your business on government contracting websites to legitimize your bid and ensure that government buyers and other procurement officers will be able to find your small business.
2. Do Market Research
You need to do market research when you want to bid for a government contract. Your knowledge of the local market does not necessarily apply to the market for government contracts. Conducting market research will allow you to make a better business proposal when it’s time to bid for your contract.
3. Bid for Contracts Selectively
It’s also important to be selective when you are submitting bids for federal contracts. If you are bidding on every available contract, then this can make it difficult to fulfill any contractual obligations. It’s best to start small and bid on contracts you are sure you can fulfill, then gradually grow your business before you bid on new contracts.
Furthermore, government contracts are secured based on the strengths and expertise of your business, so it’s important to only bid for contracts that are related to your business, products, or services.
4. Review RFP Document Carefully
You will need to review the Request for Proposal (RFP) documents that are posted by federal agencies seeking government contractors. By reviewing these documents carefully, you will ensure that your bid for the government contract is appropriate for your small business.
That said, most Request for Proposal documents are at least over 100 pages long, which means that you will need to carefully read through all sections of these documents before creating a business proposal. Some specific sections you’ll need to look at include:
Supplies, Services, and Prices
The section for supplies, services, and prices covers information about the deliverables that are required from a federal government contract. This section will cover how the government will compensate you for your products or services. One important part of the section is the list of all available items, which can include supplies, labor, and other services that you agree to provide in the government contract.
Description and Statement of Work
This section focuses on the work that is expected from the contractor. When you are creating the contract proposal, your proposal must reflect the description specifications and statement of work expected from the federal agency. The plan of action for your proposal should also highlight important points about the deliverables requested by the federal agency.
Instructions and Conditions
The section on instructions and conditions is also essential. In this section, the federal agency will have several instructions on how a contract should be constructed, which can include the formatting of the document and other conditions.
Federal agencies place a lot of emphasis on attention to detail, so skipping over this section and submitting a contract proposal that does not follow the instructions and conditions requested by the federal agency can potentially cost you a government contract.
Finally, you will need to review and adhere to the evaluation criteria of the federal agency. By paying attention to this section, you will ensure that your contract proposal satisfies the expectations of the federal agency and will also highlight your ability to follow directions closely.
5. Outline the Government Contract proposal
When you create an outline for your government contract proposal, you will need to be strategic and follow all directions laid out by the Request for Proposal documents. Outlining your government contract proposal and having multiple edits of this proposal will ensure that you can submit a strong business plan to the government.
6. Price Competitively
You also need to price your services competitively. Many people think that the government will choose the lowest bidder for government contracts, but the fact of the matter is that the government will choose the most competent business. If the most competent business happens to be the lowest-priced bid, then the government will usually select that contract.
That said, you do not want to underprice your business for the sake of getting any government contract, since this may cause the federal agency to overlook your contract proposal. A contract bid with a too-low price could be indicative of cheap services.
7. Wait for Response
Finally, you will need to wait for a response from the government agency. It can take one to six months to receive a response from a federal agency about the contract you are bidding for, so you must be patient. During that time, you are free to submit other government contracts or bide your time by running your small business as usual.
If your contract is rejected by a federal agency, you should not be afraid of seeking any available feedback. The procurement officer that contacts you will be able to answer questions about why your contract proposal was rejected. This information is essential since it can help you build a better proposal in the future that has a greater chance of being accepted.
How to Become a Government Contractor
Before you can submit a government contract bid, you will need to establish your small business as a potential government contractor. The steps to becoming a government contractor include:
1. Register Business Name
You will first need to register your business name with relevant business agencies. Registering your business name for the local and federal government is the first step that will make your business recognizable to procurement officers. Without registering your business legally, your government contract bid will be rejected automatically.
2. Apply for a Federal Tax ID
You will need to have a federal tax ID number for your small business. Without a federal tax ID number, your small business is unable to apply for relevant licenses and permits, which will also prevent your business from submitting contract bids to the government.
Because the payment for your government contract will be wired through a bank account associated with your business, you will be required to have a federal tax ID for your small business to receive compensation for the services you provide. Applying for a federal tax ID can easily be done through the IRS.
3. Request DUNS Number
You will need to have a DUNS number associated with your small business. This is a unique nine-digit code that is associated with Dun & Bradstreet, a business credit bureau that is used to credit check businesses that apply for government contracts.
4. Select NAICS Code
You also need to select the relevant NAICS codes that fit your business, which will be used on your government contract applications. This is a national standard that is used to classify businesses in every industry type. If you do not have a NAICS code, then your government contract may be rejected. You can easily find your NAICS code through the census.gov website.
5. Register at SAM.gov
You must also register at SAM.gov before you can officially bid on government contracts. Registering your small business at this website gives you easier access to bid on current government contracts.
6. Complete SBA Profile
Finally, if you haven’t already, you will need to complete your SBA profile. This is a critical step and should be done after you register your business at SAM.gov. This step is necessary because it will add your business to the DSBS or Dynamic Small Business Search, which boosts the visibility of your small business to procurement officers and federal agencies.
To win a government contract, you will need to follow all steps of the process. This means that you will need to register your business with relevant government websites and follow the contract proposal instructions carefully. To learn more about the actionable steps you can take to win a government contract, please contact Govcon Giants today.