What Is Government Contracting?
Government contracting is when specific government agencies contract with private companies for specific goods or services. The agencies usually put out a contract or often a request for proposal (RFP) and various companies can place bids for the project. Once an agency selects a particular business, a contract is signed, and that business is now considered a government contractor.
Why Work For The Government?
There are many compelling reasons to work for the Federal Government. We will go into in-depth detail about how a small business can benefit greatly from being a government contractor.
Small Business Administration Certifications
A Small Business Administration certification is a great way for your business to stand out in the marketplace. Certifications can help you gain access to specialized funding and scholarships, allow you to compete for set-aside contracts, and can be a great bonus to potential clients. Here are some certifications to consider for your small business:
- Women-Owned Small Business Federal Contract Program (WOSBs)
- 8(a) Business Development Program
- The Service-Disabled Veteran-Owned Small Business Concern Procurement Program(SDVOSB)
- Historically Underutilized Business Zone Program (HUBZone)
Small Businesses Are Given Special Consideration When It Comes To Government Contracts
In many markets, small businesses are often outcompeted by larger organizations that often have access to almost unlimited resources. This set aside actually might increase a small business’s chances of winning a lucrative bid.
The federal government is required to set aside at least 23 percent of its total spending specifically for small businesses. Several small businesses have made a fortune just on federal government contract awards. However, many small businesses fail to realize that the government has an abundance of websites to help them find these government contracting opportunities.
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.
Do Your Research
Once you have selected some agencies that need your goods and services, it is very important to research your customers. Luckily, nowadays you can find out a lot about an organization online.
At the end of the day, the United States government is a customer just like any other. However, this customer has deep pockets and unlimited needs. A small business can cater to the government by following a strategy in which the customer’s needs always come first. Identify what the government agency’s pain points are and then offer them your innovative solutions to their problems. This type of discipline always wins big points with the government. Here are a couple of examples of how you can find the information you need to win lucrative government contracts:
- Inquire about the vendor Outreach Sessions and when will they be held
- Inquire how your company’s products/services could help with the agency’s missions
- Request meetings with Agency Program managers leading the contract requirements you’re pursuing
If you would like to do additional research, you can also check www.fbo.gov, an online listing of government contracts that detail all contracts with a value exceeding $25,000. Another available resource is www.usaspending.gov, a site that details how government money is spent, what agency is issuing awards, and who the federal government is buying from.
Amazing Benefits
The Department of Defense is known for providing excellent benefits. Here is a list of some of the great perks of working with this organization:
- Paid Time Off that can increase every year
- Tuition Reimbursement
- Short and Long Term Disability
- Life insurance with family options
- Great Medical and Dental benefits
Job Security And Work-Life Balance
Startups might sound glamorous but they are far from secure. The statistics say:
- 90% of new startups fail.
- 75% of venture-backed startups fail.
- Under 50% of companies make it to their fifth year.
- 33% of startups make it to the 10-year mark.
- Only 40% of startups turn a profit.
- 82% of companies that fail do so due to income problems.
- The highest failure rate occurs within the information industry (63%)
In defense contracting, you are under a pressure cooker to get a product to market and under the control of nervous financiers. Instead, you have a fixed timeline and a payment schedule that is already in place. This means no insane 12 hour world days to meet ridiculously impossible deadlines. This allows the government to better manage employees by having realistic milestones that are attainable.
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.