What is government contracting, you first need to understand the government small business contract market and that thousands of buyers make up the government procurement process.
“A government contractor is a person or business who enters into a contract, or is bidding on such a contract, with any agency or department of the federal, state or local-level government and is paid, or is to be paid, for services, material, equipment, supplies, land or buildings with funds appropriated by Congress or other governmental agency.”
What is government contracting
Unlike grants and cooperative agreements, which are assistance mechanisms, a federal contract is a procurement mechanism. This means that the principal purpose of a federal contract is to purchase property or services for the direct benefit or use of the US Government.
If you think of the federal government as a business, it is the single largest buyer of goods and services in the world. Everything they use, everything they need, from Adhesive tape to Zip ties, everything must come from somewhere, and that place is the private sector.
Capitalizing on Government Contracting Opportunities
The federal government spent over $600 billion in procurement contracts last year and approximately 25% of that is mandated to go through government small business contracts. Additionally, annual state and local-level government procurement spending equals that of the federal government.
So, if you have a product or a service that is valuable in the commercial world, there’s likely a place for you in the government small business contracting market. Think of this as a parallel sales opportunity for your existing business.
If you’re trying to sell your product or service to the government and you’re not getting anywhere, the reason maybe you do not meet their basic requirements. Government buyers will not just purchase anything from anybody. There are certain steps and requirements you must meet.
What is government contracting: How can I get my piece of this pie? At the federal level, your preliminary requirements are registrations through SAM (System for Award Management) and DSBS (Dynamic Small Business Search).
These are your business and marketing profiles that need to be complete, compliant, and optimized. These registrations can also help to legitimize your business to state and local buyers. (Each state and local government may have their own separate registration as well.)
Secondarily, you need to investigate if you qualify for a socio-economic certification for special set-aside government small business contracts. In addition, your finances and operations need be in good order so that you can show your ability to sustain and fulfill government procurement awards.
Once you have established this foundation, you need to address these three questions:
How can I best showcase my products or services and capabilities to government buyers?
How do I create relationships with government agencies and contracting officials?
What is the best way to find opportunities – published and unpublished?
Strategic Insights: Unveiling the Unseen Landscape of Government Contracts
While published federal opportunities can be found on SAM.gov, the large majority of government small business contracts never sees the light of day in the form of public solicitations. It is estimated that as few as 10%-20% of the actual government small business contracts market ever gets posted in the form of an open solicitation. Many awards are via government credit cards, purchase orders, sole-source set-asides, GSA Schedule awards, renewed awards, and many other closed award procedures.
As the SBA (Small Business Administration) points out about identifying your market, first determine if you’re a good fit and if you are able to meet the requirements. The next step beyond your registrations is to then determine who your buyers are and how to get your foot in the door.
Government small business contracts can provide a stable source of income, even in a down economy. They also lend credibility and visibility to your business and an opportunity to create relationships with other federal, state, and local buyers, as well as other contractors. Winning government small business contracts opens doors to new markets, allowing you to diversify your revenue stream.
In Conclusion: In the realm of government small business contracts, the majority lies beneath the surface, rarely surfacing in public solicitations on platforms like SAM.gov. Unveiling opportunities beyond the 10%-20% showcased in open bids requires strategic insights. The SBA advises market fit assessment and buyer identification beyond registrations.
Government contracts offer stability, credibility, and networking opportunities, even in economic downturns. Winning these contracts is not just about income; it’s a gateway to new markets, ensuring a diversified revenue stream and sustained business growth.
