How to Successfully Bid on Government Contracts

how do government contracts work

This article explains how to find government contracts, how to prepare your business for bidding, how to bid for contracts, but most importantly – how to successfully bid for federal government contracts.

Read first: how do government contracts work?

Does my small business have a chance to sell to the Gov’t?

U.S. Government is the largest buyer in the world. Although it has specifics, landing a contract with the government is desirable by thousands of small businesses. Yet, most of them will never be able to work for federal agencies. Why?

Not because of government, mind you. In fact, the government encourages small businesses to apply for contracts. Moreover, federal agencies are obliged to award a certain amount of contracts to small businesses. This is done for multiple reasons:

  • Small businesses are the driving force of economy
  • Small businesses provide a large fraction of jobs nationwide
  • The government wants to make sure small businesses are not trampled by corporations
  • Small businesses often bring up innovations
  • Small businesses, being small, react to market fluctuations faster providing up-to-date and contemporary solutions to the government

That being said, still 90% of small businesses won’t have a chance to successfully bid on government contracts. Some of them – because they cannot offer competitive prices. Others – because they are not qualified enough for such contracts. A large portion of firms will talk about finding government opportunities to bid, but will never go further than that. And don’t forget the majority of company owners who don’t know how to sell to the government, but are not willing to learn either.

A fact: to win a federal government contract, you must understand how these contracts work in the first hand, and then just prepare accordingly.

How does the contract system work?

General Services Administration (GSA) is responsible for supplying federal agencies with goods and services they need. The range of such goods and service is not all-encompassing, but still is wide enough to cover the majority of spheres and industries. Basically, the government needs almost everything.

The vehicle to purchase goods and services for the federal agencies needs is called Schedules. A schedule award opens up contracting opportunities for a business. Bidding for such opportunities and winning the bid effectively signs the contract between that business and the government.

And learning how to bid is a significant part of your success in doing business with the largest customer in the world.

Comprehensive guide on government contract bidding

First steps: getting ready for contracts

Register your business at SAM

This must be done before you even attempt to bid for government contracts. In order to become a government contractor, you need to register at System for Award Management (SAM). This is free, but requires certain preparations. For instance, you need to get you DUNS number, get a Taxpayer identification number and the NAICS code.

The complete step-by-step guide on registering in the SAM system can be found here.

Get on a Schedule

A tricky task by itself, winning a Schedule award is nevertheless necessary to get access to bidding opportunities from federal agencies. Briefly, you need to collect all necessary documents and submit them to GSA, then wait until a procurement officer reviews your submission and either approves it (woohoo!) or declines it. A range of documents is rather wide, and there certain requirements to every document you submit and to your business as a whole, so the process requires a lot of attention and effort to complete in one go without errors. You can refer to this article to learn more on how to become a federal government contractor. Also, read our material on GSA contract requirements.

With the first steps complete, you can start hunting for opportunities to bid on federal contracts.

Finding government contracts to bid on

There are several ways to find federal government bid opportunities. Some of them are more efficient than others, but make a habit to periodically check all of them.

Search for bidding opportunities at SAM.gov

Previously, the main source for contracting opportunities was Federal Business Opportunity website, or fbo.gov. Now, the FedBizOpps is obsolete, and all the juicy government business opportunities can be found at Sam.gov instead.

The main reason why sam.gov is crucial for locating open government contracts is that federal agencies are obliged to publish all contracts above $25,000 there. Which means a lot of contracts are advertised at any given time.

And what about contracts below $25,000? They are put on a government charge card, so you will need to contact with a procurement contracting officer directly to find out when the bid is open.

Ask for help at your local PTAC

Procurement Technical Assistance Centers or PTACs provide varied assistance in government contracting, all for free. There you can find out if your business meets the criteria to work with the government. You can get help certifying your business as 8(a), WOSB or HUBZone. And sure enough a PTAC can help you identifying bid opportunities that your company is eligible to bid.

Use Dynamic Small Business Search

An indirect way to find a contract is to fill in your business data at Dynamic Small Business Search. Federal agencies use this website find small businesses to fulfill their contracts. So having a well-filled profile here can certainly help.

Use third-party bid searchers

Services like govspend.com provide professional bid evaluation and a bunch if supplemental information that can help you placing your bids with the highest win chances. For instance, GovSpend offers automatic notifications, competitor analysis, bid history, government market analysis tools and more. The service is paid, but if you are serious about breaking into the federal agency market, this could be very worthwhile.

Become a subcontractor

Another way to get gov contracts is subcontracting. The GSA publishes a list of prime contractors already holding a Schedule, that are in need for subcontractors. Making a research in that list using the SubNet directory can help you find some rewarding deals.

Preparing your bid

Ok, now you’ve found a bid that your company is seemingly eligible to bid on. Don’t hurry! You need some preparations, before actually making a bid.

Choose a proper type of solicitation

A federal agency publishes a solicitation when it offers government contracts for bid. There are four types of solicitations with different conditions and terms. Identifying the type of a solicitation and placing a bid only on the appropriate types is crucial.

  1. Request for Quotation (RFQ). This type is for contracts below $150,000 with a simplified acquisition procedure.
  2. Request for Proposal (RFP). This type of solicitation asks vendors to make a proposal in response to the government 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.
  3. Invitation for Bid (IFB). The “lowest bid wins” or “sealed bid” type of solicitation. No discussion or price negotiation is implied here.
  4. Request for Information (RFI). This is mostly to research the market and evaluate interest and capabilities of contractors in a specific niche.

You can learn more about solicitation types in this article.

Important: accepting the RFP and IFB solicitations results in a signed contract with the government. This means you are now legally obliged to fulfill the terms of the federal contract you bid on. That is why it is important to…

Read the solicitation thoroughly

A solicitation package may contain a number of documents, specifications, attachments and requirements: technical conditions, delivery volume and terms, required certifications, what documents you need to submit, and so on. With hundreds of government contracts out for bid, you should still remember that every opportunity is different, and carefully read all the attached documents. Missing a bid opportunity is bad, but much worse is to bid on the contract you have no way to complete.

If you have questions – ask! Typically, a contracting officer is willing to clarify details about the solicitation, so don’t rely on wild guesses when bidding. Make sure you understand every single point of the solicitation you bid on. Also, you may need to read the corresponding FARs (Federal Acquisitions Regulations) that govern the solicitation you are to respond to make sure you know the regulations and requirements.

Bid competitively

When the federal government has contracts for bid, it awaits fair and reasonable pricing based on the MFC (Most Favored Customer) principle. Apparently, you cannot win if you bid too high, but bidding below the ground level is also wrong. Remember: you will need to prove your prices later on by providing actual Price Proposal and Price Narrative documents.

The best way to put a competitive bid on a federal contract is to research past winning bids. You can use official resources like USASpending.gov or compare your offer versus competition bids using third-party services (govspend.com).

Important: if you are a full-time government employee yourself you cannot bid for government contracts. You are not allowed to work for or affiliate with a government contractor. You can, however, work for a contractor on positions that are not related to the products or services being sold to the government and that do not result in conflict of interest.

Submit documents

When you have read the solicitation thoroughly and determined the competitive bid, you can submit the requested forms and other required information. For most federal government contracts under RFP and IFB solicitations, there are standard contracting forms you should fill. As for required documents, they are listed in the solicitation. Our guide on contract preparation can help you familiarize yourself with government requirements.

Important: when submitting solicitation documents make sure they are signed by the person who is legally authorized to sign documents related to your business.

After submission

Now, heave a sigh of relief. You have submitted your offer, and whether this bid opportunity will turn into a government contract or not is now dependent on how well you did your homework and on the Contracting Officer.

Typically, your submission takes 30 to 120 days to review. The Contracting Officer evaluates many factors including financial figures of your business, how long it has been on the market, past performance report, and, of course, if you pricing is competitive.

Whether your proposal is accepted or rejected, you will receive a response from the Gov’t. Sometimes, the Contracting Officer requests some more information or asks you to clarify some issues.

If after 120 days you still haven’t got any response from the government, send a follow up yourself to the contacts of the Officer listed in the solicitation.

Rejected? Get the facts straight

Even if your bid was rejected, there is still work to do. Get back to the Contracting Officer and ask questions: what you did wrong, how you can avoid being rejected in the future, and what specifically you can fix in your proposal to make it more winnable next time. No hysteria – remain professional. Show that you are serious about fixing the problem your business has.

Finally, you can appeal.

Submitting an appeal

If you feel that the winning business has won the bid unfairly – due to misrepresentation, wrong business size or socio-economic status, you can file a protest to SBA. The Office of Hearings and Appeals at SBA handles protests and appeals submitted by interested parties.

How to improve your odds for successful bid

Put effort into self-education

Doing your homework prior to submitting a bid means you clearly understand all internal processes and regulations of the federal acquisition system. Which in turn means you can submit a more thought-out offer with competitive prices and well-prepared requested documents.

Here are a number of resources where you can distill a lot of useful information that helps you place your bids for government contracts more successfully.

Establish relationships with procurement officers

While “Government” may sound very depersonalized, in fact there are real men of flesh and blood behind every accepted and rejected bid – Contracting Officers. Building relationships with Officers can indeed help to secure a contract.

Communicate with the officer assigned to the solicitation you bid to. Send a follow up after a week or two after submitting your bid. Send another one if you didn’t get the answer. Make sure to communicate professionally and benevolently. Yes, the fate of your submission depends on this particular man or woman, but that does not mean he or she owes you anything. Simply show your sincere interest in the solicitation and demonstrate your professionalism.

With everything else being equal, your good relationship with the procurement officer may become the final decisive factor in whether you win the bid or not.

Hire a professional agency

The procurement process has many pitfalls, sometimes very tricky ones. Nothing that you could not handle, of course, but losing a bid for any reasons means you simply wasted a lot of time and now need to start from the beginning. And then may be again. And again.

Hiring a professional means you are protected from numerous novice mistakes right from the onset, save time and effort, and greatly improve your odds on winning. Experts in GSA consulting know very well how to bid on government contracts to make the bid look sound and hale. An expert can also provide a number of tips and advices that can be extremely helpful in composing your proposal.

2 thoughts on “How to Successfully Bid on Government Contracts

  1. Peter says:

    Everything looks like it’s really hard to figure out without a consultant. Thank you for the detailed instructions, but are there any statistics about how successful the interaction with you has been?

  2. J. K. Smith says:

    I will definitely add your detailed article to my bookmarks. It’s hard to imagine how much time and effort was spent on its preparation.

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