The United States Government Is A Very Powerful Client With Deep Pockets
The Federal government usually spends around 500 billion dollars a year on goods and services. This makes the U.S. government an extremely attractive client. There are few other organizations with this type of spending power and clout.
The government also tends to buy goods and services in bulk. If your business has the infrastructure to handle large orders, then the government can help you grow substantially at an accelerated pace.
Government agencies also buy goods and services in large quantities. Large orders can be a double-edged sword for small businesses. However, they can help you grow substantially and rapidly if managed correctly.
Understanding The Marketplace
It might at first feel like working for the government is very unpredictable. Contractors can be affected by a variety of factors such as budget cuts, regulatory pressures, change of administration, and stringent accounting rules.
However, all marketplaces can be volatile and change rapidly according to the whims of consumers. A company needs to make sure that they have a deep understanding of the end buyer and why they want to use their products and services.
This is also true for the United States Government. You will need to develop relationships and cultivate trust that allows you to showcase your competitive advantage. Strategically managing the right relationships might guarantee you the federal government as a solid client that can assure your business of a bright future.
Simplified Procedures
In 1994 the Federal Acquisition Act FASA simplified the buying procedures of the government.
Many of the more harsh restrictions on government purchases were removed for any purchase that was less than $100,000. Now agencies used much simpler procedures for analyzing and soliciting bids up to the $100,000 amount. However, the government is still required to advertise all purchases over $25,000 at www.fbo.gov.
These simplified procedures mean that approval levels are lower, there is much less documentation, and administrative details are not as complex. The government now has to reserve purchases that are between $2,500 and $100,000 for small businesses. The exception is the contracting officer cannot obtain offers from two or more small businesses that are competitive in price and quality
Purchases that do not exceed $2,500 individually or through the combination of multiple items are considered micro-purchases. These do not require competitive quotes but are not limited to small businesses. Micro-purchases are often made using government-issued purchase cards or typical credit cards.
Specifications
As of 2001, the United States Federal Government began to utilize Federal Business Opportunities (FedBizOpps) to list all procurement opportunities expected to exceed $25,000. FedBizOpps is how the government communicates its buying specifications to potential contractors.
The specifications are quite exact for most of the products and services that government agencies buy regularly. Your contract will contain extremely precise specifications that must be followed meticulously. The specifications-which describe the government’s requirements were contained in the invitation for bids or requests for proposals on which you based your bid or proposal.
If your company is awarded a contract, you are bound to deliver the product or service described in the specifications. A company is bound by the terms of these specifications, as well as the basic specifications. Failure to deliver a product meeting these terms will result in the termination of your contract for default. So, it is extremely important to understand all specifications before bidding on a federal contract. The government prefers contractors that are reliable and pay attention to the smallest details.
Bidding
The government usually makes sure contracts are competitive through the use of sealed bidding. First, the agency makes sure that its requirements are accurate and complete. Then an Invitation For Bid or IFB is issued. The IFB will describe the type of product or service that is being procured by the government. It also includes:
- Preparation Instructions
- Conditions of Purchase
- Packaging
- Delivery
- shipping
- The payment with contract clauses to be included
- Submission Deadline
The sealed bids are opened in public at the purchasing office at the time designated in the invitation.
The bids are read aloud and then recorded. The contract will be rewarded to the bidder who has the most competitive pricing and can meet the government agency’s requirements.
Government-wide IFBs can be found at FedBizOpps which provides a direct link to the invitation. Potential contractors can search the Central Contractor Registration to identify qualified small business opportunities. Any small business that wants to sell to the government should be registered on CCR.
Make Sure You Are Organized
Having solid financial records and a clear thought-out process goes a long way to impress government agencies that you can handle the job. It presents a professional demeanor that is quite impressive.
The Key To Winning A Government Contract Is To Pay Attention To the Guidelines
You must read closely what the request for proposals or RFPs wants in your bid. Make sure that you are aware of deadlines and who is handling the requests. Usually, small businesses have 6 to 8 weeks to submit a bid but this can vary, depending on the agency.
Make Use Of Government-Provided Free Tools.
You can identify contracting opportunities online by utilizing tools such as this forecasting tool that lets you see what opportunities are available. You can study the government contracts that are a couple of years old to see what requirements are needed to win the job. This puts you in an excellent position to have all your research completed when the contract is about to expire and you put in your proposal.
SAM stands for System Award Management.
In order to do any business with the federal government, you must register your business in the System for Award Management. The government will not hire any type of business that has not registered in the SAM directory.
How Do You Get Started Working With The Government?
For example, the following are the steps to apply for a federal grant:
- Step 1: Obtain a DUNS Number
- Step 2: Register with SAM
- Step 3: Register with Grants.gov
You might be wondering what SAM means and how do you register with the site. Go to sam. directory to find people who are willing to make this as easy as possible. Be sure to also check out our informative article Everything A Small Business Needs to Know About the SAM Directory, which should easily answer most of your questions.