Small Businesses Have a Good Shot at Winning Lucrative Government Contracts; Should Make a Play for Them

You should give serious consideration to the idea of doing business with the government if you’re a small business and aren’t already a public-sector vendor. Why? Because the government could potentially be your biggest and best customer.

That’s certainly the case with a great many small businesses. There’s no reason it can’t be so for yours as well, for scattered across the U.S., are more than 110,000 federal, state, and local government agencies that want to hear from you with regard to the products, services, or solutions you offer. Those 110,000-plus agencies have at this very moment over 78,000 active requests-for-proposals or bids posted and awaiting responses from small businesses like yours.

Here at BidPrime, we see all of those bids/RFPs and can tell you that many represent potentially lucrative business deals. Accordingly, we have many clients relying on public-sector business for a small but nevertheless critical portion of their revenues—and many more clients for whom government contracts represent a substantial part or even the entirety of their sales portfolio.

The Rationale for Pursuing Government Contracts

You’re good at what you do, right? Of course you are. And that’s why the government is interested in doing business with you. From the website of the U.S. Small Business Administration (SBA):

“The government prefers to work with established, reliable businesses…those that have a track record of delivering quality goods and services on time and within budget, along with having a strong industry reputation.”

OK, so you know the government has opportunities for you. But why should you make the effort to pursue those opportunities? What’s the rationale for identifying and working towards winning government contracts? The answers:

1. Money.

U.S. governments are the "number one customer in the world." They are a potential customer-base impossible to ignore.

An Aug. 1 Federal Times article by Andrew Eversden (“New Data Show the Soaring Cost of Government Contracts”) cited Bloomberg Government's 8th annual Top 200 contractors report to detail the rise in Pentagon spending on federal contracts during fiscal 2018. According to that source, defense accounted for “about $373 billion of $559 billion in overall contracting spend from federal agencies.”

More pertinently, the SBA at the end of 2018 announced that the federal government met its small-business federal contracting goal for the fifth consecutive year, having awarded 23.88 percent of federal contract dollars to small businesses— up $5 billion for a total of $105.7 billion. According to the SBA’s press release, this marked the first time more than $100 billion in prime contracts had been awarded to small businesses.

2. The advantage is yours.

By law, U.S. government entities must award to small businesses a certain percentage of contracts. That gives you a big advantage right out of the chute.

Visit the Federal Procurement Data System—Next Generation to research and track the success of various agencies as they attempt to meet their small-business contract award targets.

And you may have other advantages in your corner. For example, your chances of winning a contract improve if your business qualifies for a special designation, such as Women-Owned Small Business (WOSB), Service-Disabled Veteran-Owned Small Business (VOSB), 8(a) Small Disadvantaged Business, or HUBZone Certified Business. And those are just at the federal level.

Unsure of your next step or steps? The Small Business Administration is a tremendous resource, as is your local Association of Procurement Technical Assistance Centers (APTAC) office.

3. Bid/RFP info is easy to access.

Especially if you’re a BidPrime client.

The old saying that “knowledge is power” is never truer than when it comes to the pursuit of government contracts. The reason is that public-sector entities have vastly less flexibility in making purchases than do their private-sector counterparts. Government agencies must widely announce that they’re in the market for a specific product, service, or solution and invite bids from all interested parties. They must award the contract to whoever turns in the most competitive bid and meets any stated qualifications. In other words, you enter the bid process armed with a lot of strategically invaluable insights and assurances. Knowledge is power.

But because of the ready availability of government bid/RFP information (particularly when compiled and analyzed for you by BidPrime), you’re able to position yourself ahead of the competition by being in the know about who is buying what, when, and with how much of a spend. (A word about what we do at BidPrime: we spare you the laborious effort of manually sifting through all those government announcements in order to find the most attractive or most “get-able” bids/RFPs—and, in the process, we save you time, money, and stress.)

Success Tips

Here’s how to position yourself for success as a as small-business pursuer of government contracts:

Contact the SBA and/or APTAC for help mapping your path. These agencies can tell you about state and/or local government policies and programs designed to help you land contracts. They will also help you properly present your business and cultivate important relationships with influential people and decision-makers in government.

Recognize your strengths. Review the materials, solutions, and services you offer, and identify those that will (or can be) a good fit for provision to government agencies. Make sure that whatever you offer is something you can timely and fully deliver if awarded the contract. The SBA, APTAC, or other local business-support resource (such as the Chamber of Commerce) can help with this important step.

Don’t worry if no contracts come your way immediately. You need to go into this with the understanding that it’s likely going to take time and investment to get your foot in the door and win that first award. I mentioned that the public sector lacks the flexibility of the private sector, but something both share in common is how highly they value positive relationships. As such, you may find it wise to start small so that you can have an easier, surer shot at delivering on your promises. Succeed at that and you’ll begin building a positive track-record, which will translate into government agencies trusting you with progressively bigger and more lucrative awards.

Tap into the experiences of others. Consult with peers, friends, and associates—even competitors on occasion--to learn from them how the world of government contracting works and what are the best-practices you should adopt.

Register and certify. Make sure your business is properly registered with all applicable agencies and/or in all applicable jurisdictions. Also be sure to obtain applicable certifications (such as those from the SBA and APTAC, as mentioned earlier). Be thorough. Check and double-check.

Cultivate relationships with contacts in the public sector. Also mentioned earlier was my view that relationships are as important in the public sector as they are in the private. Therefore, you should seek out contacts with a reputation for trustworthiness, reliability, attention to detail, and communicativeness.

Plan and pursue. One reason why it’s so important you learn at the earliest possible moment of newly announced bids/RFPs is that bid time-frames and deadlines are shrinking, thanks in part to government’s ever-expanding use of information automation. Once you find out about an opportunity, thoroughly read the bid/RFP documents before you begin constructing a response. Know exactly what the issuing agency wants. Check and double-check your understanding against the issuer’s documents. Don't make assumptions about anything, not even the optional stuff. Get answers if you have questions.

Permit me to close with this word of caution: Don't fall into the costly habit of pursuing each and every remotely interesting bid/RFP that comes your way. You’ll waste cash, manhours, and focus if you chase without restraint—and, on top of all that, you’ll experience gobs of frustration. Avoid this trap by meticulously evaluating your capabilities and then matching them to the requirements spelled out in each bid/RFP you receive. Respond only to those bids/RFPs where your capabilities and the issuer’s requirements fully align. For questions about a bid’s/RFP’s specifications or about how to submit a competitive price, you should contact the originator of the request, consult with peers and partners in your industry, and research the agency and its requirements.

Supplying goods, services, and solutions to the public sector isn’t a fit for every small business. However, the notion of becoming a vendor to government isn’t something that should be dismissed out of hand. It’s a potentially viable market for many small businesses. Give it some consideration. You might discover it to be a viable one for you too. Very viable.

To review bid/RFP information, to include the applicable bid documents, call 888.808.5356 or visit BidPrime.