The federal government is a huge potential customer for small businesses. A federal contract can be a good opportunity to boost revenue for your business, especially since the government is obligated to award a large percentage of contracts to small companies.
Here’s how to prepare your business to bid a government contract.
Understand the type of solicitation
Government contracts come in different forms, and the type of solicitation issued will give you insight into what the government agency expects from your proposal. There are three main solicitation types you’re likely to see from the federal government:
- Request for quotation (RFQ): Typically used for contracts under $150,000, this vehicle is relatively simple and seeks information on price, delivery or other information for planning purposes.
- Request for proposal (RFP): For larger acquisitions, applicants need to provide details about how they would perform a specific project or supply a specific product.
- Invitation for bid (IFB): Similar to an RFP, the IFB or ITB (invitation to bid) is for projects over $100,000. It represents a sealed solicitation for government procurement, meaning there is no negotiation between agency and vendor.
Each of these solicitations requires a strategic approach to pricing. In an RFQ, for instance, your business is likely to compete with others to see who can offer the best value or lowest price. Responding to an IFB, conversely, takes careful consideration to ensure you’re setting a fair price; there will be no room for negotiation if you overshoot the bid or leave out key details.
[Read more: How to Bid on a Federal Government Contract]
Actively market your products to the government
The government is just like any other customer; while it would be difficult to target the government with an ad campaign, you can market your offering to different agencies. Market your small business directly to a government agency or prime contractor by learning what the agency needs.
“Many federal agencies have what’s called an Office of Small and Disadvantaged Business Utilization (OSDBU) or an Office of Small Business Programs (OSBP). These offices work to identify opportunities to contract with small businesses,” wrote the Small Business Administration. “Each agency releases a procurement forecast that includes contracting opportunities for small and disadvantaged businesses.”
[Read more: How to Get Certified as a Small Disadvantaged Business]
Read the forecast and contact the agency’s small business office to put your venture on their radar. Typically, offices will also host training and networking opportunities. Participate in events as much as possible to help the agency get to know your business. For more ideas, check out this resource from the FDIC, which provides guidance on marketing to the federal government.
Each agency releases a procurement forecast that includes contracting opportunities for small and disadvantaged businesses.
The Small Business Association
Subcontract with an existing contractor
If you’re not sure if government contracting is right for your business, or you want to learn more before you bid, explore the option of subcontracting. Many large businesses look for small business partners to allow them to bid on opportunities allocated for boosting small businesses. Your partnership is valuable for these prime contractors. Likewise, you’ll be able to learn the ropes with an established contractor who has the systems and relationships in place.
To find subcontracting opportunities, look to the SubNet database to see opportunities that large contractors post when they are looking for small businesses to serve as subcontractors. Likewise, the SBA maintains a directory of federal government prime contractors with subcontracting plans. Look for someone in your area or niche who wouldn’t be considered a direct competitor.
[Read more: How to Boost Your Small Business by Becoming a Government Contractor]
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
Follow us on Instagram for more expert tips & business owners’ stories.
CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.
