Contracting & Bidding Information

Small Business Guide to Government Contracts

For companies that provide goods or services that their state or the national government can use, government contracting can be a big opportunity, not only by driving revenue and growth but also by opening the door to new contracts. If you’re not sure where to start with government contracting, keep reading to learn what government contracting is, how to get started, how to successfully place a bid, and tips for winning.

Before you get started as a government contractor, there’s much to learn and prepare. In this guide to government contracting, you will find some tips and tools that can help you get started.

What Is Government Contracting? And What Are Public-Sector Contracts?

Government contracting is the process of getting and fulfilling contracts with state or national governments. For many products and services, the US government is the biggest buyer on the planet. Contracting with the government can be a lucrative opportunity for your business, but it also comes with drawbacks.

The government is highly regulated, and you will have to be in strict compliance with its rules and regulations or risk suspension or debarment from contracting. However, contracting with the government may open the door to even more types of contracts. If you can show that you meet the government’s high standards, other companies may trust your business more.

Often, the term “public contracts” or “public-sector contracts” is used to describe government contracts. Government contracts are considered “public sector” because they are owned by the government and therefore funded with public money, i.e., taxes. Conversely, private-sector contracting deals with commercial entities such as retail businesses or corporations. Construction is one industry where contracts are often available for both sectors, since both public agencies and private companies often lead development projects.

The Benefits of Government Contracts for Small Businesses

While government contracting may be more complex than other forms of contracting, the investment of time and resources can be worth it for some small businesses.

If you choose to specialize in government contracting, you can hone a unique skillset that can give you an advantage over other bidding contractors. When you begin to build a portfolio of government projects that you have completed, you can build trust with government agencies, which can make it easier for you to win contracts down the line. Further, since government contracting can be considered a niche industry, you begin to make connections with subcontractors and others in the industry which can also help you build a reputation and increase trust with industry partners.

Since government contractors market to a much smaller pool of potential clients than, say, marketers of consumer products, specializing in one particular area like government contracting can reduce costs. Depending on the type of work you do, your main focus may be on hiring technical staff and on building relationships with government agencies and subcontractors. This, plus the work of submitting bids and proposals, may be specific areas of focus for you, allowing you to narrow down your spending to where it truly impacts your business’s cash flow.

Finally, some public sector duties are necessities that may not slow down when the economy does. For example, roadways may still need repairs, and schools and hospitals stay open. While it’s true that public funds may be reduced in times of economic uncertainty, it is rare that public agencies close or file for bankruptcy.

Getting Started as a Government Contractor or Public-Sector Contractor

Getting started as a public-sector contractor is similar to getting started as a corporate or retail supplier. You may want to follow three main steps: Do your research, consider getting certified, and consider building your business credit. For contracting with the government, you may also want to get a free Dun & Bradstreet D‑U‑N‑S® Number, as it can be required for many government contracts. You should also consider talking with a lawyer about common compliance issues in order to help keep your business safe. Find more information on all of this below.

Does your business have what the government is looking for? If you can’t answer “yes” to this question and back it up with numbers and facts, you may need to do some research. Things to look into can include: Is any other business currently supplying the same product or service to the government? How can your business outshine them? Maybe you can offer lower cost, faster turnarounds, or superior quality. Or maybe you have stronger business credit and more reliability. If you don’t do your research though, you may easily miss out on landing a contract because you weren’t prepared to sell your business well.

The government has high standards for the businesses it contracts with, and there tend to be consequences for non-compliance. Before contracting with the government, you may want to seek legal guidance and make sure you understand what will be required of you in terms of cyber security, human trafficking laws, and more.

Register with SAM today – Businesses that wish to compete for federal government contracts must first register with the System for Award Management (SAM). SAM is a government-owned database used to gather, validate, and distribute information about contractors to federal agencies and procurement officials. You must be registered in this database before you can begin bidding on federal contracts.

How to Bid on Government Contracts as a Small Business

Government agencies cannot appear to be biased when awarding contracts. By law, they must usually draft a request for proposal (RFP) and circulate it publicly, giving contractors as fair a shot as possible at winning a contract. An RFP will often outline the project requirements and specifications, the requirements and specifications for your proposal on the bid, and sometimes a sample of the contract you will be expected to sign should you win the bid. Here are three steps for how to bid on government contracts.

1. Identify bids where your firm may have a strategic advantage.

Bidding on a public-sector contract requires a certain amount of time and resources, so work with your project team to identify contracts that you are likely to win or that will improve your firm’s position in the market if you do. Networking at public government contracting events is a great way to meet contacts that may be involved in the projects you might bid on and hear their thoughts and ideas. The bidding marketplace itself is typically online, each bid with its own unique requirements and deadlines. At the bottom of this page, you will find several online resources that can help you locate bids specific to your industry.

2. Complete your firm’s proposal and any other outstanding requirements.

Your proposal on a government or other public-sector project should highlight your strengths as a company and differentiate your business from your competitors. The knowledgeability and experience of your staff, your firm’s history of completing similar projects on time and within budget, and your understanding of the client’s needs and objectives are great things to focus on, and it’s likely that RFPs will ask about these things specifically. Depending on the industry and your level of direct competition, you may want to incorporate graphic design elements or think of other creative ways to make your proposal stand out from the others.

3. Understand and comply with the next steps outlined in the RFP.

These will vary depending on the type of contract and the number and quality of bids the government or other public agency received. Typically, the request for proposal will include a timeline of events for when you can expect to be informed of your proposal’s status. Sometimes, if the project received multiple bids, interviews may be scheduled with project teams to determine the best firm for the job. Sometimes a cost proposal is requested along with the original proposal, but other times a cost proposal is only requested if your firm is selected for further consideration. In some cases, if a project doesn’t receive enough bids, the government or other public agency may be required to list the project publicly again before making an award. So keep an eye out for a second RFP – you may be able to tweak your original proposal and resubmit it.

4. Follow up on the results of the RFP.

If your firm was rejected for a bid on a public project, you should consider contacting the awarding agency and ask why. Making sure that you fully understand the reasons for your rejection can help you understand what you can do to improve your next bid proposal. The winning firm’s proposal should be publicly available as well, so take a look at it to see if there are identifiable opportunities to improve on your next bid.

How to Win Government Contracts

Balancing numerous proposal requirements while maintaining current projects and managing client relationships can sometimes feel like a juggling act. Proposals on public-sector work often have hard deadlines, varying degrees of involvement, and different content from one to the next. Below are six tips for how to get government contracts that will help make your proposals more appealing.

  1. Take advantage of supplier diversity programs. Many state and federal agencies require that a percentage of a contract be carried out by a “disadvantaged” business to meet their own funding goals. If you are a small woman-owned, veteran-owned, or minority-owned business, you may qualify to gain a competitive edge on these contracts by becoming certified. Certifications by third-party agencies such as the Women’s Business Enterprise National Council or National Minority Supplier Diversity Council can also lend to your credibility. There may also be programs that can help you get ahead in your specific industry, such as the Department of Transportation’s Disadvantaged Business Enterprise program.

    Consider getting certified through one or more of these third parties before you start bidding on contracts:

  2. Make sure all of your i’s are dotted and t’s are crossed. Public agencies are more vulnerable than most to liability. They often set forth a very specific set of requirements that contractors must meet in their proposal in order to win a contract. Make sure that you read RFPs carefully and meet each and every specification they require. Even if some of these requirements seem redundant or out of place, often they are often born out of necessity or past experience. Many times, the people reviewing your bid want to see that you will follow every instruction and produce thorough, high-quality work with no mistakes or missing information.
  3. Build your network of prime contractors. Partnering with larger firms is a great way for a small business to get experience working on large, big-budget projects. Taking advantage of supplier diversity programs can be an effective way to boost your appeal as a subcontractor to large firms who don’t qualify for disadvantaged status. Industry events can be a great place to meet prime contractors and find out about upcoming bids. Consider sending your most experienced team members, who can speak with authority on the work you do.
  4. Diversify your project portfolio. While it may be tempting to build on your success in an area you are already proficient in, it’s important to branch out and get experience working on different types of projects with different agencies and in different locations. The more diverse your project portfolio, the more attractive you can be to both prime contractors and government agencies. Consider allocating a portion of your resources toward developing new areas of competence.
  5. Make sure your staff have opportunities for continuing education. The laws surrounding public work are constantly evolving, and it’s important to have staff who are knowledgeable of the latest challenges and innovative solutions. Make sure your team members are aware of organizations and conferences they can participate in to build their network, their skills, and their knowledge base both within and without their primary area of expertise.
  6. Get a D‑U‑N‑S Number and start building business credit. Getting a D‑U‑N‑S Number is the first step in building your business credit. Not only do some federal agencies require you to have one to do business with them, but having a business credit file can assist you with getting work from state and local agencies, as well as prime contractors. Anyone contracting with you will want to know that your business is in good health and that you will be able to deliver a project to fruition. You can use D‑U‑N‑S® Manager to request updates to the basic information in your business credit file for free or CreditSignal® to get free alerts when there are changes to or inquiries about your business credit file.* You can continue to build your business credit file by purchasing a CreditBuilder product.

Bidding on Federal Government Contracts

The federal government may have different funding goals and compliance requirements than some state or local agencies. Therefore, the qualification process for federal contracts is often more complex and the requirements more stringent:

Another thing to note is that you may experience increased competition. Compared to state or local contracting, federal contracting opportunities often attract a larger pool of qualified applicants.

Industry-Specific Resources

Aerospace, Combat, Marine

Aerospace:

Combat Systems:

Marine Systems:

Information and Tech, Databases

Information Systems and Technology:

Databases:

Business Research Data

Business Research Data:

Other

Other Resources

 

 

* CreditSignal only shows certain of your Dun & Bradstreet scores for 14 days, then provides directional changes to such scores. It also indicates the number of individual request(s) for information, which may include but is not limited to credit information, by a unique external customer(s) on a D‑U‑N‑S® Number. To view additional scores and ratings, view scores and ratings following the 14 day period, or learn about what industries are making such requests, we recommend that you upgrade to one of our paid credit monitoring or credit building solutions. Please note, due to the proprietary nature of these inquiries, we do not provide the names of the companies inquiring on your business credit file– only the industries in which they reside.

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