3 Tips to Prepare for the Bid Process
Photo Credit: Abbe Lyle
Have you thought of applying for government contracts, or does the prospect seem a little daunting? There is no doubt that that the federal government will continue to spend money no matter the state of the economy. Government contracts are certainly a great deal for any sized business but for a small business that meets requirements it can be a stable source of income.
The government will ALWAYS pay its bills which means consistent work and consistent payment once you are set up to bid.
There are many elements involved in becoming set up to bid, but three key items stand out to become eligible to apply for government contracts:
1. Understand the policies and procedures required to do business with the government.
The U.S. Small Business Administration (SBA) provides a great short video showing how to sell to the federal government as a small business. A great tip is to always bid competitively, generally expect to make 15 percent profit.
2. Register with the Central Contractor Registry (CCR).
All businesses are required to register with the Central Contracor Registry to do business with government agencies. You are required to set up a System for Award Management (SAM) profile. Registration for SAM is free, and will facilitate automatic payment should your company be awarded the contract.
3. Make sure you have an online presence.
A website is a must. No government department will do business with you without a web presence. There are plenty of free or low cost hosting services for your website. Just search for "website hosting companies" in your internet browser to find a hosting company that meets your needs.
Once you are certified and can start bidding, you can check Invitations for Bid (IFB) through various government agencies. IFB’s are posted online at Bidnet. The details of each contract will be listed, and you can determine if your company is a good match for a particular bid. Bids should be realistic, so make sure you spend plenty of time researching and planning. Your first successful contract will provide you with the promise of more contracts in the future.
Don’t forget the financing element.
The financial capacity to bid on government contracts should not get lost in the process. For example, you do not want to lose the bid because you are unable to obtain extended payment terms from your supplier who may well want to be prepaid prior to shipping product. A great solution is invoice factoring. Factoring will finance your purchase as soon as the order is fulfilled, based on the invoice to the government that will be paid 30 days later. There are obviously a number of options for financing and you should consider what works best for your company.
Go ahead, get certified and start looking at available contracts. The government spends over $500 billion each year on goods and services!