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.
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, if managed correctly, they can help you grow substantially and rapidly.
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.
Simplified Procedures
In 1994 the Federal Acquisition Act or 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 on 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.
Consolidated Purchasing Programs
Just like any other organization, the federal government has common purchasing needs such as petroleum products, carpets, furniture, perishable goods, and standard office supplies.
For this reason, it made sense to centralize the purchasing of various types of common products and services.
Some new procurement models for acquisition include multi-agency contracts and government-wide acquisition contracts or GWACs. These types of contracts help obtain long-term vendor agreements with fewer vendors. The GWACs have become very popular because they allow government buyers to quickly fill requirements by issuing orders against existing contracts or schedules without starting a new procurement action from scratch. Agencies can now competitively award several or multiple task order contracts to different firms for the same products and services. This practice allows federal buyers to issue orders to anyone or a combination of several firms with relative ease.
What is FAR?
The FAR is a standardized set of regulations employed by all federal agencies in making purchases. It provides procedures for how to maneuver in the procurement process. It takes you through the need for the product and service to the award of the contract.
Government Contracts Can Be Very Lucrative For Small Businesses
The United States government issues 500 billion dollars in federal contracts every year. They also set aside 23 billion dollars specifically for small businesses. However, many small businesses find the process of winning government contracts daunting and give up before even really trying.
To do any business with the federal government, you must register your business in the System for Award Management directory. The government will not hire any type of business (large or small) that has not registered in the SAM directory.
Please read one of the helpful blog articles on our site like Everything You Need to Know About SAM for Small Businesses. These blogs will help give you all the information you need to understand how we can help make the process very easy for you. Sam Directory will happily guide you through this often confusing process.
Sam Directory will guide you through the process of writing a successful government contract proposal. We are invested in your success and want to help you succeed in winning a lucrative federal contract.