Many small business owners feel that working with the federal government is difficult, filled with paperwork, and impossible to manage. Although breaking into this market can be tough, it can also be very rewarding. Below are 10 solid reasons why it makes sense to pursue contracting opportunities with the government.
1. $200 Billion annual procurement. The federal government averages about $40 billion annually with small businesses. It must, by law, spend at least 23% of its prime contract dollars with small businesses. In addition, 5% goals also exist for minority and woman-owned businesses.
2. Buys almost any product or service imaginable. You build it or provide it and it’s almost certain that the federal government, the biggest customer in the world, has a need for it, and is already buying it from one of your competitors. Even the Department of Defense (DoD), which accounts for about 60% of all procurements, buys everything from food services, to management consulting, to software, to guard services.not just guns, planes, and ships.
3. Advertises its needs well in advance. The federal government is about the only client you’ll ever meet that describes what they need, when they need it, who to talk to about it, how much they’re thinking about paying for it, and when they’re going to buy it! Most of the major agencies have annual procurement forecasts, web sites, and online procurement bulletin boards to help you identify business opportunities.
4. Purchasing ground rules are clearly specified. Whether you’re dealing with NASA, the Air Force, Treasury, or any other federal government agency, they all follow the same rules-the Federal Acquisition Regulations (FAR). The requirements, advertising, procurement, selection, payment, and other steps are spelled out in these documents, and you don’t have to learn everything from scratch as you do in other markets.
5. Customers can’t refuse to see or listen to you. Federal government workers, whether they’re Generals, Admirals, or GS-7’s all work for you and other American citizens. They want to hear from you, and if you approach them professionally, they can’t avoid your “sales-pitch”. When was the last time that you could say that about a commercial customer?
6. Many organizational friends available to help you. The Small Business Administration (SBA)Offices of Small and Disadvantaged Business Utilization (OSDBU) in every federal government location, Small and Disadvantaged Business Specialists, Procurement Center Representatives, DoD’sProcurement Technical Assistance Centers (PTAC), and even your local Congressional representatives are paid to help you succeed in business. You only have to ask!
7. Pays for work progress along the way. The federal government, through progress payments, milestone payments, and the SBA’s various working capital, and other loan guarantee programs helps you finance the contracts you’ve won.
8. Credit card purchases and simplified purchasing available. Traditionally, federal government purchases of up to $2500 could be made with a government credit card which is just like a regular Visa or MasterCard purchase. Recently, the limit was increased to $250,000, although the ruling is still under scrutiny. This presents a huge opportunity for small businesses that can accept credit card payments, especially because these purchases do not have to be competitively bid.
9. Non-competitive as well as limited competition advantages available to selected businesses. As a certified minority contractor in the 8(a) Business Development program, you can seek and be awarded a contract of up to $5M (for manufacturing) or $3M (for everything else) without having to compete, in the normal sense. If you compete in a set-aside that is open only to minority-owned firms, your competition looks very much like you and not the “big guys”. As a Small Disadvantaged Business (SDB), your price can be up to 10% higher or you can enter a contract competition with up to a 20 point (out of 100) head start. These programs can level the playing field for small, woman- and minority-owned businesses.
10. Rewards large business for working with you. The federal government even provides incentives to the so-called “big guys” to contract with you in full and open competitions. You see, if they do, they are also eligible for the up to 20 points in proposal evaluation credits. Being certified just makes you a more attractive teaming partner with those “big guys