Government contracts can be fertile ground for a small business to grow but earning their business takes a little education and legwork. The first and most important step to obtaining government contracts is to do your homework.
Different government entities have varied processes and rules for bidding. For federal contracts, the Small Business Administration provides a solid overview of their policies and procedures. The National Center for Small Business Information offers courses to entrepreneurs on government work at all levels.
In order to even bid on federal government contracts, a small business must register with the Central Contractor Registry, which is an electronic system that provides automatic payment transfer when a contract is awarded. The registry requires a business to submit a brief profile summarizing capabilities, etc. so it is important this is the best it can be.
Preparation is also key to winning government contracts since the bidding period can vary. Sometimes, the open bid period is less than a month. Not streamlining your paperwork can result in you losing money if you have to “reinvent the wheel” advises Greg Brooks of West Third Group, a Plattsburg, Missouri consulting firm.
Brooks also advises that procurement and contracting officials do not necessarily accept the lowest bid and in fact, is pretty low on their list of considerations. It is more important to demonstrate experience since past performance is scrutinized much more so than price.
Networking is also a big component of not only winning government contracts but good business period. Gary Beckert of the NCBSI says that most small business get their start in government contracting by teaming with someone else. He advises, “A small business isn’t going to succeed without a network of peers, economic development organizations and other contacts.”
And don’t expect a major windfall from government contract work. Many contracts set a 15% profit limit and some are as low as 10%, which is nothing to dismiss but not the golden egg some might expect.
Government contract work can be very beneficial for your small business if you know the basics and are prepared.