Small Business Guide To Federal Bidding
Get The Bid Package
After you have ascertained the government contract that you want to bid on, it is essential to contact the agency and request a bid package. This package is also often called the solicitation package.
After you receive the package, review it carefully. Find out what the purchasing office wants to buy and figure out if your company can meet the requirements.
The Bid Package should contain the following: the buyer’s contact information, including name, address, phone number, and e-mail address, are listed on the bid notice. When you request the bid package, make sure to also ask for amendments.
Where Do You Find Government Contracts For Bidding
Search for opportunities at the following SAM.gov. Federal agencies are required to publish all contracts above $25,000 on SAM.gov. This means that there are many contracts advertised there at any given time.
Contact a procurement officer for information on contracts below the $25,000 threshold for publishing.
Look To Your Local PTAC Office
Procurement Technical Assistance Centers or PTACs provide free assistance in government contracting. They will help you identify bidding opportunities and if your company meets specific criteria to work with the government. You can also find out if your business can be certified as 8(a), WOSB., or HUBZone.
Understanding The Federal Contracting System
General Services Administration, also known as GSA, is responsible for acquiring the goods and services needed by federal agencies. As a result, the United States government needs everything and is a super consumer worth billions of dollars.
The government uses schedules to purchase goods and services. When there is a need in an agency, it is called a schedule award. Small businesses can bid for it. Once the award is won, the winning bid signifies a signed contract between the business and the government.
This means that learning how to bid for these government contracts is extremely important to succeed with this lucrative customer.
What Type Of Contract Is Being Sought?
The three significant contracts that are being sought are fixed price, cost-reimbursement, and unique situation.
These government contracts are used when the scope of work is clear from the beginning, and therefore a price is determined by the agency in advance. There are many different types of this particular contract.
Firm Fixed-Price (FFP)
This contract means that the price is set in stone and the vendor or small business awarded the contract will be taking all the risk. So if the contract is over budget, the small business owner has to pay out of pocket. However, if the project is under budget, then the business will keep the extra profit. This is a great contract for companies that are precise with their pricing and have a lot of experience.
Fixed-Price with Award Fees
A fixed price with award fees contract offers a hard and fast cost for objective performance success. This contract will also have additional awards to incentivize more subjective qualities like aesthetic appearance and technical knowledge.
Fixed-Price with Economic Price Adjustment
The prices are often adjusted at the top of the project to account for changes within the labor cost, materials, or market prices of specific items within the contract. The criteria for these price changes must be defined within the original contract.
Fixed Price Incentive (FPI)
This contract states a maximum price but it also awards the service provider for coming in under budget. So coming under budget in this type of contract allows for a larger profit for the small business provider.
Special Situation Contracts
- Labor hour: Direct labor hours expended are reimbursed at a hard and fast hourly rate, usually including all costs and profits. (See FAR 16.602)
- Definite-quantity: The contract quantity is defined, but the delivery schedule is flexible. Payment is on some sort of fixed-price basis. (See FAR 16.502)
- Requirements: Actual delivery schedules and quantities are flexible during the contract period. Payment is based on a predetermined fixed-price basis. (See FAR 16.503)
- Special Bidding Techniques and Bid Office Terminology
The Federal government has the following type of solicitations for bidding:
- Request for Quotation (RFQ). This type is for contracts below $150,000 with a simplified acquisition procedure.
- Request for Proposal (RFP). This type of solicitation asks vendors to make a proposal in response to the government’s request. You can (and often will) discuss delivery details, technical requirements, and specifications with the contracting officer when you bid on that type of solicitation.
- Invitation for Bid (IFB). The “lowest bid wins” or “sealed bid” type of solicitation. No discussion or price negotiation is implied here.
- Request for Information (RFI). This is primarily to research the market and evaluate the interest and capabilities of contractors in a specific niche.
Read the solicitation requirements carefully. A solicitation package will include documents, technical conditions, attachments, and other things required with the submission. For most federal government contracts under RFP and IFB solicitations, there are standard contracting forms you should fill out. For required documents, they are listed in the solicitation.
How Do You Get Started Working With The Government?
SAM stands for System Award Management.
To do any business with the federal government, you must register your business in the System for Award Management. In addition, the government will not hire any type of business that has not been written in the SAM directory.
We have an article on our site, Everything You Need to Know About SAM for Small Businesses, that gives you essential information about this process.
As a savvy entrepreneur, you have already used our site to register in the SAM directory. Congratulations on taking this essential first step to become a government contractor.
The First Step Is Registering With SAM
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 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. In addition, Sam Directory will happily guide you through this often confusing process.