Winning Government Contracts: Five Things You Need to Know

Author Pauline Vega

Posted Feb 26, 2023

Reads 6.5K

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Winning government contracts can be a game-changer for small businesses, resulting in huge opportunities to grow and expand their customer base. However, procuring government work can be confusing, with many small business owners unsure of how to approach government agencies and government buyers. That's where Maureen Borzacchiello, owner of trade-show display manufacturer Creative Display Solutions learned the ropes - by working directly with American Express Open Victory's Procurement VIP Mentorship Program.

Borzacchiello worked with the program to help land contracts with the federal government, specifically targeting agencies using North American Industry Classification System (NAICS) codes. These keywords are used to identify businesses that produce goods within specific categories grouping similar processes. By ensuring her business was coded properly and pitching her services through creating trade-show displays and storage facilities, Borzacchiello was able to find real opportunities. But it all started with market research.

To register your small business properly for government contracts, you'll need to have a checking account number and a business profile ready for the primary government vendor database: Central Contractor Registration (CCR). This is one of several often-overlooked steps that could greatly increase your chances of finding government-contracting opportunities. Another key resource is the General Services Administration (GSA) schedule - a purchasing process that represents federal and state regional buyers and helps establish long-term contracts for more than 11 million products.

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How to Successfully Compete for Government Contracts

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Competing for a federal government contract can be overwhelming, but the key is to be prepared. Research the contracting agency thoroughly and understand their needs and requirements. Build strong relationships with key decision-makers, attend industry events to network, and demonstrate your expertise through past performance and qualifications. It's also important to have a responsive and competitive pricing strategy and stay up-to-date on any changes or updates in the contract process. By taking these steps, you can position yourself for success in winning government contracts.

1. Register your business

Registering your business is a crucial step in winning government contracts. Government agencies ensure that only official government contractors are awarded federal contracts, and to become one, you need to complete several steps. Firstly, you need to obtain an official nine-digit number known as the Employer Identification Number (EIN) or Social Security Number (SSN) for sole proprietors. This number instantly represents small businesses, corporations or any other form of business entity in the eyes of the government.

Additionally, you must register with the System for Award Management (SAM) registration system which verifies your company's existence and allows it to be listed in the federal contractor database. You will also need to list your NAICS code (North American Industry Classification System), enabling contracting officers to identify what industry your business works in easily. Finally, you should apply for small business certifications if appropriate and obtain a CAGE (Commercial and Government Entity) code - a unique five-character identifier given by Defense Logistics Information Service (DLIS). Obtaining a CAGE code enables government agencies to identify and contact your business efficiently when presenting multiple Cage codes.

2. Get a Schedule

If you're looking to become a government contractor, getting on a GSA schedule is a must. A GSA schedule is essentially a pre-approved list of vendors that federal agencies can choose from when looking to fill their contracting needs. By getting on a GSA schedule, you'll have increased visibility and access to more bidding opportunities with federal agencies.

To get started, you'll need to submit an application to the GSA and meet their requirements for eligibility. Once approved, you'll be able to start bidding on contracts through the GSA schedule. This is an important step in winning government contracts as it allows you to streamline your bidding process and focus on the opportunities that are best suited for your business.

3. Enroll in the Simplified Acquisition Program

Enrolling in the Simplified Acquisition Program (SAP) is a great way for businesses to assist themselves in gaining valuable past performance and breaking into the federal contracting market. The SAP program, which is managed by the Federal Contractor Registration Agency, releases contracts valued between $2,500 and $150,000 that do not require bids. This means that small enterprises have a better chance of winning contracts through this program.

The SAP program is designed to simplify the contracting process for procurement officers and vendors alike. By offering simplified acquisition contracts, the vendor lessens the amount of paperwork required to award a contract. This makes it easier for businesses to provide services, technology or other products to the government. Enrolling in this program can greatly increase your chances of winning government contracts while also streamlining your business operations.

4. Dynamic Small Business Search (DSBS)

Dynamic Small Business Search (DSBS) is a free-to-use website that connects small businesses with government buyers looking to award federal contracts specifically designated for small enterprises. The website is maintained by the Small Business Administration and serves as a valuable tool for small businesses looking to win government contracts.

Small businesses, which are independently owned and operated for-profit organizations and considered small if they meet certain size standards, can use DSBS to create a profile highlighting their capabilities, certifications, and office space situated in the United States to conduct business. This information allows government buyers to easily search for and identify small businesses that meet their needs without having to rely on national monopolies.

5. General Service Administration (GSA)

The General Services Administration (GSA) is a federal agency that helps manage government contracts for other federal agencies. It provides bidding opportunities for commercial enterprises to compete for long-term government contracts. The GSA publishes approximately 11 million commercial items on its websites, making it easier for procurement officers to find the products and services they need.

Before bidding on a GSA contract, it is important to understand the requirements needed to win the bid. One can visit government official websites to research past contracts awarded documents and learn more about specific procurement officers who may be responsible for future bidding opportunities. By understanding the processes involved in winning GSA contracts, businesses can ensure their success in securing lucrative long-term deals with federal agencies.

6. How do you price a government contract?

When it comes to pricing a government contract, there are several factors to consider. First, it's important to do your research by diving deep into the details of the request for proposal (RFP) and any additional information provided by the contracting officer. You can find this information on the above-mentioned websites. Paying close attention to what is being asked for in the RFP will help you determine an appropriate price.

It's also important to remember that federal contracting officers regularly award prime contracts based on quality won, not necessarily the lowest price. So while you want to bid aggressively, you don't want to underprice yourself and end up losing money on the deal. Consider your profit margins carefully and make sure you have previous experience or a strong bidding reputation before submitting a full bid. Don't forget to follow instructions precisely and have a colleague check for spelling mistakes or missing information in your bid template; this will save time in the long term and ensure that you earn valuable past performance credits for future large deals.

Frequently Asked Questions

How do you make a bid?

To make a bid, identify the item or service you want to bid on, research its value, and decide on your maximum bid. Then, enter your bid amount and wait for the auction to end.

How to successfully bid on government contracts?

To successfully bid on government contracts, research the bidding process thoroughly, identify the contract opportunities that match your business, review the contract requirements carefully, and submit a competitive bid that meets all the necessary specifications.

How to create a winning bid?

To create a winning bid, thoroughly understand the project requirements, showcase your unique value proposition, and demonstrate why you are the best candidate for the job.

How to write up a bid?

To write up a bid, gather all necessary information about the project and its requirements, outline your proposed solution and approach, clearly state your pricing and payment terms, and provide any relevant credentials or past experience. Be sure to proofread and edit for clarity before submitting.

How do I request a bid?

To request a bid, simply contact the company or contractor you are interested in and provide them with the details of the job. They will then prepare a bid for you based on those specifications.

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Pauline Vega

Writer at Inside Business

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Pauline Vega is a writer and blogger who loves to share her thoughts and experiences with the world. She has always been passionate about writing, and over the years, she has honed her skills to become an accomplished wordsmith. Her blog is a platform where she expresses her views on various topics, including lifestyle, travel, and wellness.

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