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How to Obtain Government Contracts in Manufacturing, Distribution and Wholesale

Posted by Steve Barthol on Fri, Feb 20, 2015 @ 08:00 AM

Selling to the government means understanding the intricacies of the process. The rules are continually changing. The unique requirements for the distribution and wholesale companies are worth considering. 

Financing Government ContractsThe good news is that the General Services Administration (GSA) helps connect the private sector with federal agencies and fulfilling their business needs. The marketplace is extremely competitive, so it really helps to understand the process.

The Small Business Administration (SBA) also offers advice on how to get started, and guides small businesses through the process. 

Each year, the SBA, on behalf of the government, negotiates ‘agency goals’ to ensure the different agencies within the federal government award contracts to small businesses. The SBA establishes the small business size requirement also. The most prevalent size standard for manufacturing industries is 500 employees. For distribution and wholesale services it is $7 million in average annual gross revenue over the last three fiscal years. This seems large, but the aim is to encourage small businesses to grow. However small business size standards can alter according to industry, and these changes are consistently updated on the SBA site

The SBA helps explain all the policies and procedures, but a couple of requirements to bear in mind is that it is necessary to register with the System for Award Management Assistance (SAM) in order to bid on any government contract, and you should also have a strong online presence. 

Government contract compliance can be daunting. There are many things to consider, among them: 

  • Cost rate and structures are regulated so the marketplace remains competitive
  • Federal regulations must be followed to the letter
  • Audits must be completed in accordance with U.S. Government auditing standards 

This is just the beginning, but as we have mentioned, there are many resources available to help. From a financial perspective, it is worth remembering that the government will always pay! The downside is that they can be incredibly slow to pay. Once you have put the time and effort into the bidding process, you want to make sure you have adequate cash flow to provide the goods or services. Bay View Funding specializes in providing financing for government contracts, with a team of experts who have a deep understanding of how to navigate through the tough process of government contracting. Combine this with experience in financing for manufacturing, distribution and wholesale and your company will have the help it needs to cover cash flow and start bidding for those lucrative Government contracts.

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Topics: Manufacturing and Distribution Financing, Government Contract Financing, Wholesale financing

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