How to Bid on Government Contract Work

Business Management

Regardless of who gets elected in November, one thing you can be sure of is that the government will continue to spend big money on contracts.

Last year, the federal government spent an estimated $439 billion across 31,000 contracts. That amount does not even include the billions of dollars that state and local government agencies spend each year.

In short, there is a lot of money to be made in contracting for the government. However, bidding on government contracts can be a drawn-out process that takes several months. It is also highly competitive, as you are likely to be bidding against experienced government vendors.

If your company is fairly new to bidding on public sector work, these eight tips can help you win your share of RFPs from the federal, state and local governments:

Determine if You Are a Small Business

Being classified as a small business can be a huge advantage. The federal government is required to commit at least 23% of its contract work to small businesses each year. To learn what the government considers to be a small business in your industry, explore the North American Industry Classification codes here. The site includes a table that lists the maximum number of employees and revenue that contractors can have and still qualify as a small business.

Register Your Company

Your company will need a Dun & Bradstreet “D-U-N-S” number for each of its locations before you can do business with the government. You can quickly obtain these nine-digit numbers for free at the Dun & Bradstreet website.

 

You will also need to register your company in the government’s System for Award Management (SAM). Registration is free, and setting up a user account allows you to track the status of your bids. You can also view how many of your industry competitors are already doing business with the government. Visit the SAM User Guide to learn more about this part of the process.

Be Selective

For the federal government alone, there are at least 31,000 contracting opportunities. Combing through all of them is not practical. Once you have selected the government agencies you want to work with, there are a handful of websites where you can find contract solicitations and opportunities. Those sites include USAspending.gov, and FedBizOpps.gov. The General Services Administration’s web site has information on upcoming and long-term contracts. Marketing resources like ONVIA or ImmixGroup can also help you find the right kind of government work for your company.

Bring Your “A” Game

Bidding on federal contracts is a strict, rigorous process that can take several months. To be considered, your company will need to write an engaging bid proposal, present a viable solution and participate in negotiations over the contract. Depending on the agency, there may be several steps to the process, including Request for Proposal (RFP), Request for Quote (RFQ), and Invitation for Bid (IFB). Because you will be working with the government, be prepared to share more financial information about your company than you would when bidding on a commercial project.

Each agency of the U.S. government has its own procurement arm. Once you select the agency you want to work with, you need to familiarize yourself with how that agency handles the bidding process. As with any business proposal, it helps to understand the agency’s pain points. What kind of expertise or product is needed and how can your company address that need?

Consider Becoming a Subcontractor

You do not have to do business directly with the government. In fact, becoming a subcontractor for a larger company will spare you much of the time and paperwork that goes with government bidding. Large government suppliers have their own data networks and you may have to register with them to become a subcontractor. Another resource is Supplier Connection, an IBM-powered website that connects small businesses with major government suppliers like AT&T, Du Pont, UPS and more.

Emphasize Your Advantages

Over the years the federal government has taken several steps to even the playing field in the bidding process between larger and smaller companies. In addition to committing nearly a quarter of its contract business to smaller companies, the government also reserves opportunities for traditionally disadvantaged groups. These include companies that are owned by women, minorities and disabled veterans. Companies that are based in economically troubled regions under the government’s HUBZone program can also gain an advantage in the bidding process.

If your company falls under any of these categories, be sure to use them to your advantage in the bidding process. To learn if your company qualifies as a HUBZone business, visit SBA.gov.

Go Local

You may find that your company has more of a competitive advantage when bidding on contract work that is closer to home. To do business with a particular state, county or city, you will need to understand the procurement process that particular jurisdiction uses. For most states, that usually starts with a visit to the state’s department of administration or general services website.

One advantage of bidding on state and local contract work is you may have more face-to-face contact with key decision makers. Relationships are just as important in government contract work as with any other business opportunity. In addition to completing all the paperwork involved in the bidding process, look for opportunities to meet and network with government officials whenever possible.

Seek a Mentor

Before you delve into the bidding process, it helps to learn from professionals who have experience in marketing their services to the government. If you do not know anyone who can guide you through the process, the government provides two mentoring programs for companies that want to do contract work. The General Services Administration’s Mentor-Protégé Program matches business owners with experienced government contractors. The Small Business Administration also provides information and mentor programs that help companies get started as contractors for the government.

Sources: U.S. Federal Government, Small Business Administration, Quickbooks.com, Inc. magazine, Forbes, LInkedIn