How to Learn Contract Bids
Selling to a government agency can provide a significant revenue stream to your business. The U.S. government spends billions each year on everything ranging from furniture to consulting services. It also requires that at least 23 percent of its purchases be fulfilled by small businesses. Many companies learn that government contract work can be steady and reliable if they follow the guidelines and present a clear case of why their company is the best choice.
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Instructions
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Understand the bidding process. Make sure you understand the whole process of government contracting so you know what you're getting into and can be well-prepared. Talk with counselors at the Small Business Administration. For female and minority business owners, join Women Impacting Public Policy to gain a comprehensive understanding of the contracting process.
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Learn from professionals who are successful in the field. Learn how other business owners succeeded in government contracting. This may help you determine how suited and prepared your company is for pursuing government business.
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Lay the groundwork. Prepare your company to support the government's needs. Identify skill sets that could be leveraged once you begin doing business with the government. Improve workflows to ensure that the right systems and processes are in place to deliver as promised.
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Register for a D-U-N-S Number. Dun & Bradstreet (D&B) provides this identification number for each physical location of your business. Visit the D&B website to learn more about D-U-N-S Numbers and how to register. They have a special section for U.S. government contractors.
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Register with the federal government's Central Contractor Registration (CCR). This is a database of vendors doing business with the federal government. The CCR website provides an online registration process for new vendors.
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Fill out an Online Representations and Certifications (ORCA) application. This provides additional information about your company and its business activities. Visit the Business Partner Network website to complete the online application.
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Obtain an NAICS code. The code classifies the economic sector, industry, and country of your business. You can obtain an NAICS code on Census.gov. On the website there is a search box where you can enter a keyword that best describes your business. You may also search the NAICS list by reviewing their drill down chart. Finally, if you have an SIC (Standard Industry Code), you can convert it to an NAICS code on the NAICS Concordances page.
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Tips & Warnings
Become a subcontractor. Some small businesses begin their government contracting careers through subcontracting. It allows them to gain government experience while preparing to bid on their own contracts.
Consider contracting to the local government. State and local governmental agencies actually purchase more goods and services cumulatively than the federal government. Because of size and scale, local government contracting sometimes makes better sense for a small business. For example, it's easier to maintain computer equipment for a school district than for the Department of Homeland Security.
Network with others. It can be difficult for a small business to win a government bid because it is limited to what it can do. Some get their start by teaming up with other businesses. Partner with other small businesses looking to do work with the government.
Be prepared before you bid. You may have to act fast --- some bidding deadlines are as short as month. Have your business information ready so you can add whatever specifics may apply to a particular bid.
Don't expect a windfall. Many contracts with the government stipulate a maximum profit of 15 percent (sometimes even as low as 10 percent).
References
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