Who do you think the world's biggest customer is?
McDonald’s? Microsoft? Exxon perhaps? In fact the answer is good Uncle Sam. The United States government spends more on goods and services than any other organization on the planet.
Government contracts can be highly lucrative and for a small business winning a multi-year, multi-million contract can be a game changer. Unfortunately it is estimated that that only 22.5% of federal government contracts are won by small businesses, according to a 2012 SBA study.
Some of the reasons why small businesses miss out on government contracts are unavoidable. Smaller enterprises often don't have the capacity to deliver larger contracts. And the ability to dedicate staff and resources to winning larger contracts can be challenging for a small business.
But, that is not the full picture. The US government wants to help small business win more contracts. The support and information is there if you know where too look. To help you get started the right way, here is what you should do step by step by to start winning government contracts.
Step #1 – Determine What You Will Offer
Unless your business has a single product line, there is probably a variety of things that you can offer the government. Make a list of which goods and services you could potentially provide. Then look at the list of the various federal government agencies and try to match these which would be a natural fit for your business.
If for example, you are offering janitorial services, these may be of broad interest to a large range of federal governmental agencies. If your product is more specific, for example jet engines, then it may only be of interest to certain federal agencies.
When you contact the federal agency you will need to talk to the Procurement Center Representative (PCR). All government agencies have a PCR whose job it is to liaise with suppliers and provide them with the information that they need to bid on government contracts. Federal Agency's will also have their own specific bid boards where you can find information about contacts that are currently open.
You can find a list of all of the Federal agencies and links to their procurement websites here:
Step #2 – Get Listed
You next step should be to register yourself with this Central Contractor Registration (CCR) website. This website is a database of all of the suppliers and vendors which which to provide goods and services to the US government. It lets the government know that you are ready and open to accept business from them. It is also recommended that you list with the Dynamic Small Business Search and the General Service Administration (GSA) schedule. The GSA is a separate department of the US Government charged with providing communications and supplies.
Step #3 - Search The FedBizOpps Website
All government contracts over $25,000 need to be listed on the FedBizOpps website. This makes a great place to quickly determine if there are any relevant opportunities that you might want to bid on. The FedBizOpps website has plenty of training videos and other information for small businesses looking for government contracts. It also has an excellent search engine, which allows you to look for contracts by:
State or Territory
Type of contract
The FedBizOpps website can be found at https://www.fbo.gov/
Step #4 Understand The Bid Package
When you bid on a government contract it is binding. This means that you need to be sure that you understand all of the terms and deliverables. You also need to make sure that you will have the capacity to deliver on the contract. Winning a multi-million government contract could be a fantastic opportunity for your business, but do you have the ability to source the employees with the right skill sets to deliver on the contract? And do you have processes in places to deliver the products or services successfully?
You also need to be careful when pricing the contract. Price is a major component determining who wins a government contract. This means that there can be a temptation to drop your prices as low as possible to win the contract. After all, you might think, having some work is better than no work at all. But, underbidding can actually cause major problems for your business. Especially on a long term, high value contract. Make sure that you understand all of the variable costs involved and have calculated these correctly into your final bid price.
Step #5: Tailor Your Services Or Products
The US government purchases a huge range of products and services. But that doesn’t necessarily mean that they will want exactly whatever it is that you are offering.
You may need to tailor your offerings slightly so that they better fit what there is actual demand for. For example, if you are running a content marketing firm, then there may not be a lot of demand for blog post writing, but writing technical reports may be in steady demand. Widening your product offering slightly can significantly enhance the number of opportunities that are available to you. If you are struggling to find contracts that you can bid on, think a little more laterally about what you could offer the government.
Step #6: Get Additional Help
The process of winning a government contract isn't always easy – especially if it is your first time. That's why you may want to get help. Luckily, there are regular procurement conferences that you can attend where you can learn more about the process as well as have a chance to interact directly with buyers from the government.
Another option is to network directly with PCRs in your area. Forming direct relationships with people in the government who have buying discretion, is one of the best ways of ensuring that you are kept up to date with new opportunities. It can also be a good idea to find a mentor from the business community that has successfully one contracts in the past. Finally, you can hire a professional freelancer who specializes in preparing bid packages to ensure that you have the best chance of success.
The real key to succeeding with winning government contracts, whether local or federal, is perseverance. There is a learning curve to the government contracting process. So, while you may not win the first contract that you try for, the experience of simply applying can be invaluable. The vast majority of people who win government contracts will have bid on multiple contracts. The end rewards can make all the work well worthwhile.
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