Are you looking for a way to expand your business? Government contracts can be very lucrative, offering exposure and the potential for future work. However, they can also be complex to navigate and it helps to know the lay of the land before you start. Let's walk through the things you should know before submitting your first bid.
First Things First
1. What's a subcontractor?
Generally speaking, the large government contracts are given to large companies. Don't despair, though, if you're not a big fish just yet. These large contractors, or prime contractors, will use smaller companies, or subcontractors, to help them fulfill the contracts. As a subcontractor, the prime contractor will use your services or products alongside other subcontractors.
Why do they do this?
There are several reasons for using a subcontractor, mostly revolving around supply chain and convenience. If they have been hired to build robots for the government, they will need screws, circuit boards, and wires. If you sell those items, that's where your company would come in. They may also need computer programs for the robots and delivery service upon completion. While they could hire and train people to program the robots and ship them, it's much faster to hire a company that already has the services down to a science.
Spreading the work amongst several companies also helps to mitigate risk. A large project often requires capital to start and there may not be an allowance for payment before delivery of products or services. Financing the project through a bank or approaching a factoring company that specializes in factoring government contracts is an option, but you can ease the start-up costs by spreading them through multiple companies.
If you are just getting starting in the world of govcon, or government contracts, you will most likely be a subcontractor for your first few projects.
2. Are you certifiable?
Government contractors are legally obligated to employ a certain percentage of qualified minorities, women, persons with disabilities and covered veterans as a part of affirmitive action. To claim these statuses, you may need to certify your business as being run by a person who meets those qualifications. The certification processes can take time, so you'll want to start as soon as possible.
3. Do you have all your business information readily available for the application and bidding processes?
A large part of the process is filling out forms and providing statistics on your company. If you're not organized, not only will this be painful, but you may not be able to provide needed information in a timely fashion, if at all. Making sure that you have a good understanding of your business's processes, resources, staff and capital will not only help you with paperwork, but it will also provide you with a knowledgeable base for deciding what projects to bid on. Documents such as a financial capability letter will help you in the bidding process. This demonstrates to government contracting officers that you possess the financial ability to complete your contract. We can help you prepare for these. Click here to request a financial capability letter.
With these business documents on hand, you may find that you are a match for more contracts than you anticipated.
4. Do your research.
So, who needs what your business offers? Government contracts are available for all manner of services and goods that need to be delivered. Whether you specialize in janitorial supplies or social media marketing, you can find a fit. There are online sites that specialize in these searches, but you should start with your best asset: you. Work your contact list to see who you know and who they know. These connections to other business owners and decision makers can lead you to projects that you might not have heard about.
Learn more about getting started in government subcontracting here: Starting Out in the Government Contracting Market
5. What is the scope of the project? Do you meet all requirements for the project?
Now that you have your target government customer, what is the project that they are looking for assistance on? Find out all the details on the project and the specific requirements. This can be anything from location-specific vendors, specific material types, turnaround time, past performance and systems used. If you don't meet a requirement, you might be able to partner with another company that does, resulting in a win-win for everyone.
Learn more about teaming up with a prime contractor here: 4 Secrets to Become a Successful Veteran Government Contractor
6. Have you reached out to the contracting office?
Before you submit a proposal, or bid, it's a good idea to talk to the person in charge of the project. It's also a chance to ask questions before you fill out the paperwork and provide feedback on the project itself. That personal connection is a great way to showcase the mettle of you and your company. These little things, like speaking to the contracting officer before applying, are often the things that stand out and give you the competitive edge.
Submitting the Bid
7. Filling out the paperwork
Just like there are so many different projects, there are so many different ways to apply. Some will use a system called FedBizOps, which will ask you to print out a pdf and send in a package of forms. Others may use online only systems. With all of these options, you'll be very grateful for all the work you did earlier to have your information at your fingertips. Read all the instructions and make sure to answer all the forms.
After applying, it's a wise choice to keep a system that will give you quick access to previously submitted bids. You'll find that a lot of the information requested is the same, which will help in filling out future applications. It's also a good idea to keep track of who, when and where you've sent bids to for follow up. GovTribe is a great tool to help manage your government sales pipeline.
8. Make sure you give the right amount and right kind of information
After a career in the military, you should be used to a certain amount of redundancy and seemingly irrelevant information requests in dealing with the government. The application process may ask you for things that don't appear to immediately pertain to the contract or for the same information on different pages. It's very important that you provide the information as requested and where requested to make sure your bid is not rejected for lacking it.
At the same time, you don't want to overwhelm the contracting officer. Reams of sales data when it's not asked for can be off-putting and cause your application to end up in the trash.
9. Submit your bid BEFORE the final date
Why is this so important?
What if you make a mistake? What if they have a question? Sending the application a few weeks before the cut-off gives both you and the contracting officer breathing space in the process.
After the Bid
10. Follow up
There are many opportunities that are lost because the person didn't follow up. A quick call or email to the contracting officer to check on the status of your bid helps to build relationships with that officer. This can be vital for understanding what went wrong and what went right, in addition to getting a status update.
11. Be ready to move when you win with the right financing
Did you win? Congratulations! Now, you have to start producing. If you find that you are rich in contracts, but lacking in cash flow, one option is to pursue government contract funding. This can be a loan from a bank or you can reach out to companies that provide cash advances against future invoices for a small fee. No matter how you decide to fund the work, now's the time for you to do what you and your company do best. Click here to apply for invoice financing.
12. Be gracious and willing to learn if you don't win
Did someone else win this time? Congratulations! It sounds funny, but you've got an opportunity to learn how to make a better bid for the next contract. Reach out to the people who helped you find the project and bid. Ask them how they experienced you and your company. Above all, maintain those relationships and offer value to everyone you meet. You never know who will be the person who connects to your next bid.
Are you ready to take the next steps? We've created an informative eBook that goes into depth on government contracting. Download The Government Contractor's Handbook and get dozens of resources and step by step guides to help you optimize your business and navigate the crucial steps you need to take to be successful.