Why government contracts?
Government contracts are a tremendous financial opportunity for small businesses.
The U.S. government is the largest customer in the world. It buys all types of products and services — in both large and small quantities — and it’s required by law to consider buying from small businesses.
The government wants to buy from small businesses for several reasons, including:
How to find federal contracts?
These tools can help you find contract opportunities that are right for your business:
Learn how your business can search and compete for contract opportunities with states and local governments, and U.S. territories:
The process of requesting proposals, evaluating bids, and awarding contracts should take place on a level playing field. The government should consider a bid from any qualified business.
Federal agencies must publicly list their contract opportunities. Some of these contracts are set aside exclusively for small businesses.
In some cases, these so-called set-aside contracts might consist of certain types of tasks on larger contracts. In others, entire contracts may be reserved for small businesses. When a contract is set-aside for one specific small business, it’s called a sole-source contract.
The government prefers to work with established, reliable businesses. Do you have a track record of delivering quality goods and services on time and within budget? Is your reputation within your industry strong?
Not only can it take a long time to win your first government contract, it can take a significant amount of money. Some businesses spend between $80,000 and $130,000 to earn their first contract.
Also, it could take up to two years to start making a return on your investment. You’ll need to have enough cash flow to sustain your business. Maintaining a diverse list of private-sector clients can help offset any potential initial losses.
Being e-commerce savvy is very important in government contracting. For example, if you want to work with the Department of Defense, you must be able to invoice and receive payments electronically.