It’s a massive market: The U.S. government is the largest purchaser of goods and services on earth. It awards some $500 billion in contracts each year. And about 23 percent these contract dollars are earmarked for small businesses. At any given time, there are typically more than 25,000 active federal contracts looking for bids. There’s plenty of work out for bid with state and local governments as well.
But pursuing contracts with government agencies is not for the faint of heart. In addition to the many procedural milestones involved, you need to know your business’s capabilities backwards and forwards. Gaining an understanding of the bidding process is essential – and you’ll need to build relationships along the way.
Still, if you’re willing to put in the time and legwork, chances are, you can find a successful niche in the wide world of government contracting.
A contract is a contract, right? Wrong. There are some major differences between government contracts and those your business may pursue in the private marketplace. The biggest difference is probably the hassle factor.
There are a number of web-based resources that list “live” contracts. The federal government’s database is available through the Federal Business Opportunities website. Virtually all purchases above $25,000 are listed here. For state and local contracts, a good resource is the Government Contract & Bid website. You could also begin by contacting your regional office of the U.S. Small Business Administration for ideas on how to get started.
To register as a federal contractor and qualify as a small business, you’ll need to begin by:
Along with government contracts come many responsibilities. The terms of federal contracts require businesses to meet certain regulatory requirements, including labor, OSHA, environmental, and other regulations. You are also expected to comply with equal employment opportunity (EEO) and Department of Labor (DOL) regulations.
The SBA is charged with making sure that historically disadvantaged business owners are given the chance to win federal contracts. These include businesses that are at least 51 percent owned and run by: