Friday, September 23, 2011

Lesson #98: Securing a Government Contract

The U.S. government is the largest buyer of products and services in the world.  In 2009, the federal government set aside $422BN to spend with small businesses.  But, only $96BN (22%) was actually awarded to small businesses (the rest going to large corporations), given the lack of properly registered and qualified small businesses to work with.  So, if your product or service can be sold into the government channel, it only makes sense to properly register your business to do work with the government.  Especially, given how large government contracts can be, in terms of driving material revenues for your business.

In order to qualify as a small business to do work with the government, you need to: (i) have done at least $25,000 in annual revenues in the last two years; (ii) not employ any W2 government workers; and (iii) not source any of your products or services outside of the U.S., unless such countries are listed on the approved U.S. trade partners list. 

If you qualify, then you need to file a U.S. Federal Contractor Registration (CRR) and negotiate preferred, 5-year government pricing with the U.S. General Services Administration to get on its GSA schedule.  The government typically does not work with any vendor that is not on a GSA schedule.  And, unless you pay up to expedite the process, it can take months or years to get through the entire approval process.  So, the sooner you start, the better.  You can learn more about the GSA approval process from this useful tutorial from Contracting Services Group, a third party consulting firm that can assist you through the process.  There is also useful government contracting information on the Small Business Association website.  For CRR registration consulting assistance, check out US Federal Contract Registration.

Once you are approved, you will be added to the GSA Advantage website, an easily searchable database of all GSA approved vendors, that government employees use to find vendors by product or service.

But, you don't want to be reactively waiting around for government leads to come in.  Given the heavy competition to get these contracts, you need to proactively go after these government leads.  One place to look for such government contract leads is at the Federal Buying Opportunities website, which has a database of over 40,000 active federal contracts, easily searchable by product or service.  There are also independent websites, like B2Gmarket.com, Bloomberg Government and GovDirections.com, that may be helpful to you here.

So, now that you better understand the government contracting process, you can hopefully tap into this huge market.

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