Have you ever thought about why you should consider doing business with the federal government? If not, was it because you weren’t sure where to start or you thought it’s just too complicated?
Well, the federal government is the largest buyer of goods and services in the world. Last year, federal government procurement spending was well over $600 billion and a quarter of that spending was allocated to small businesses. In fact, total government procurement more than doubles when you add the spending at the state and local level to over $1.2 trillion.
As you can see, based on these procurement dollars, you should consider doing business with the federal government, as well as your state and local government. Government contracting presents a tremendous opportunity for small businesses to participate in lucrative award opportunities.
Government contracting work presents many opportunities if you know where to look and how to network. It’s important that you are prepared in advance and have an established commercial business.
You need to make sure your government registrations are current and compliant. That starts with your SAM (System for Award Management) registration, followed by your DSBS (Dynamic Small Business System) registration with the SBA. These are just starting points and should be followed by a carefully crafted capability statement to outline your core competencies and past performance.
Government agencies are looking for good vendors with a solid track record of success. Even if you are a new business but experienced in your industry, you can qualify as a government contractor.
A good way to start is as a subcontractor to a larger, more established government vendor. For example, a large prime contractor such as Lockheed Martin needs smaller contractors as part of its government contracts to meet certain socio-economic spending goals with small businesses.
Another important consideration is that government contracting can provide you with stability and consistency in your workflow. This can help you to maintain a steady stream of business even during a period of economic downturn.
For instance, during COVID-19 the federal government was one of the largest spenders of money during that time frame for personal protective equipment and supplies. Often, in soft economic times, government stimulus helps to keep the country growing.
Government contracting should also be considered as part of your long-term business development strategy. Creating relationships within the government can grow branches as your contacts move up and vertically from agency to agency. The same goes for relationships you establish with other businesses as a subcontractor or through teaming partnerships.
Once you get your foot in the door with one government agency it makes it easier to work across agencies and develop more business. It also establishes credibility on the federal, state, and local level, as well as with commercial clients.
Much like your commercial business, government contracting really is a relationship business. The advantage in federal contracting is that with a little research you can know exactly who buys what your sell and how much they paid. This is all publicly available information, but it takes some digging to find.
Good databases are out there. You just need some time and patience to look. Sometimes a paid service can help you accelerate this process and arm you with the information to put you ahead of your competition.
Don’t be intimidated by the paperwork. That’s just part of government contracting. You’ll want to make sure you dot your i’s and cross your t’s. It’s a process, but one that can be easily learned. In fact, starting as a subcontracting is a good way to walk before you run.
Doing business with the government is also like a seal of approval or a stamp of credibility because you have passed the test of the maze of paperwork and met certain quality standards required in government contracting. This can help you win bigger business not only within government agencies but also to your commercial clients.
Remember, the government wants to use you as a vendor. Part of their job is to help small business, which in turn helps to create good jobs and grow our economy. Don’t be intimidated. You should consider doing business with the federal government. It’s just good business.
