Government contracting is a helpful resource if you’re thinking about bringing your business into the field. The government utilizes many contractors, from small and medium-sized businesses to large corporations. As a business owner or employer, you may be looking to take your enterprise to the next level. Government contracting can do that, but there are things to keep in mind before starting.
The pros and cons — plus the process itself — are a few of many aspects you’ll need to consider before stepping into government contracting. You’ll also have to think about how you’ll navigate this industry during the COVID-19 pandemic. This field can be tough, depending on the availability of contracts and your sector, but it can also bring about great success. Here’s what you should know.
What Is Government Contracting?
Government contracting entails private companies working with a specific government agency in contract deals. Branches or agencies of the government will put out contracts that various companies can then bid on. Once a business gets a contract, they are then working with that agency.
Since the government is one of the biggest customers out there, it will work with almost any business to buy products, goods, and services.
Before you start contracting, there are a couple of key things to consider. Theoretically, the government wants to ensure all competition is open and fair. Additionally, pricing for goods and services should be competitive. Next, you’ll need to make sure the government receives what it pays for — this system runs on precision. Last, individual contractors and the government itself need to comply with the contracting laws involved.
These are the basics you should know when looking into government contracting. Deciding how you want to approach the field is the next step.
Which Businesses Take Part?
Businesses of any size can take part in bidding for government contracts. This path can offer a good source of revenue, especially for smaller organizations. Because of the pay rate, small, and medium-sized companies frequently tend to gravitate toward government contracting.
The government will also make sure a percentage of contracts go to small businesses — so if you run a small organization, you might have a better chance of finding a bid.
Elsewhere, the government designates a portion of the contracts for women-owned small businesses, small disadvantaged businesses, companies within historically underutilized business zones (HUBZone) and service-disabled, veteran-owned small organizations.
As for specific types of companies, the United States government looks for services and goods of all kinds. Think of it as a consumer itself. It will need different businesses to support it and keep it going. Therefore, your company becoming a government contractor will likely create high demand rates.
What Are the Pros and Cons?
Remember to balance the pros and cons of government contracting. Though you’ll have an opportunity to make money, there will be drawbacks as well. Deciding if the pros outweigh the cons is an important step. Many of the advantages involve financial benefits and security, which most companies seek.
Excellent compensation means the government will pay you well for your services. This dynamic is one of the main reasons people get into the contracting field. You’ll also be able to build your business efficiently. While working with the government, you can use digital marketing, word-of-mouth and other advertising strategies to grow your enterprise. Additionally, the government’s long-lasting contracts provide a sense of security and stability.
As for the cons, the guidelines and multi-step process can hinder your progress. The government provides strict rules and regulations for contractors, which can be hard to navigate. Additionally, the competition will be steep, and bidding might become difficult. Therefore, getting a bid and starting your contract can take some time. If the agreement isn’t stable enough, it can fall through, too.
Another main disadvantage that’s specific to the current times is COVID-19. While it won’t be impossible to work through this pandemic, it will be difficult. The coronavirus brings certain compliance and financial considerations as well. However, government contracting could be a lifeline in this unprecedented pandemic.
How Can You Take the First Steps?
If you’re looking to get started, you’ll need to figure out the first steps. You’ll want to register your business on the government’s System for Award Management (SAM) page. Doing this includes your company within the database for agencies to find.
You’ll also want to do your research and figure out what type of contract you’re looking for and what agencies you can see your business working with. For example, The Centers for Disease Control and Prevention (CDC) lays out the types of contracts it uses. You can use the CDC as an example of what’s to come in terms of legal agreements.
Finally, you must be able to sell your business. To stand out in the crowd, you want to make sure you’re going above and beyond to provide a unique angle the government will notice. From there, you can start down the path of becoming a government contractor with this knowledge.
Starting the Path to Government Contracting
Use this advice to begin your journey of becoming a government contracting company. In due time, you can start making money by providing highly valuable goods and services to the government.
By: Caleb Danziger, BOSS contributor