How to Bid on Government Contracts. Each year, the U.S. federal government spends hundreds of billions of dollars purchasing products and services. Of that amount, small businesses receive almost a hundred billion dollars in contracts. With the right preparation, you can submit a well-reasoned bid that might land the government as one of your clients.
Finding Contracting Opportunities
Search the Federal Business Opportunities website (FBO).
Go to https://beta.sam.gov/. Federal agencies use the site to list their contracting opportunities. All federal solicitations worth at least $25,000 are published on this website.
- Be careful of private websites that charge money to access their listings. Carefully review what is being offered before you sign up.
Get on a GSA Schedule.
The General Services Administration (GSA) negotiates price and terms with vendors, and then federal agencies can purchase products or services as needed. Some schedules are set aside for small businesses, so you can try to get onto them.
- Visit the Vendor Toolbox for more information about getting on a GSA Schedule: https://vsc.gsa.gov/RA/toolBox.cfm.
Search for subcontracting jobs.
Many contractors hire other businesses as subcontractors. By working as a subcontractor, you’ll gain experience working on government contracts and building your reputation. Search for subcontracting opportunities at the SUB-Net website: http://web.sba.gov/subnet/search/dsp_search_option.cfm.
- You can begin searching for subcontracting jobs as soon as you open your business.
Work with a bid-matching service.
Your local Procurement Technical Assistance Center (PTAC) should offer bid-matching. Through their database, PTACs can find federal, state, and local solicitations. Depending on your office, bid matching might be free, or you might need to pay a fee.
- Find your nearest PTAC at https://www.aptac-us.org/.
Assess whether your company is a good fit.
You shouldn’t rush to apply for all contracts, hoping to land something. Instead, only apply for those contracts which your business can fulfill. If you are awarded a contract and fail, you probably won’t get another chance.
- Ideally, you should start small. The government will assess your past performance on contracts, so make sure you choose something manageable at first. For example, you can bid on projects worth $3,000 or less
Preparing Your Bid
Create a System for Award Management (SAM) profile.
SAM is the primary database for vendors doing business with the U.S. federal government. You’ll need to upload your tax identification number, D-U-N-S number, and other information.
- Obtain your D-U-N-S number for free at https://fedgov.dnb.com/webform/pages/CCRSearch.jsp.
- Remember to update your profile every 12 months, otherwise it will become inactive.
Draft your capability statement.
This one-page statement provides an overview of your business, as well as your past performance. You’ll include this in your SAM profile. A sample is available at https://www.hhs.gov/grants/contracts/get-ready-to-do-business/sample-capability-statement/index.html. Your capability statement should include the following:
- Company information, such as name, contact information, and website.
- A brief narrative of your business history and your products or services.
- Short biographies of key employees.
- Any certifications or clearances.
- Your D-U-N-S number.
- A list of your business suppliers, dealers, and distributors.
- A list of three years of past performance.
- A list of clients.
Identify the type of bid solicitation.
When the government wants services, they put together a solicitation, called a bid package. You should identify the different types of solicitations so that you can make sure your bid is responsive. Generally, there are four types:
- Request for Quotation (RFQ). When contracts are worth less than $150,000, the government will typically request information and a quote. Your response is not considered an actual offer.
- Request for Proposal (RFP). You will be told what the government needs and what information you should include in your proposal. An RFP ultimately ends in a contract.
- Invitation for Bid (IFB). An IFB is also called a “sealed bid solicitation.” You submit an IFB without much discussion with the government office. Price is usually the most important factor in awarding the contract.
- Request for Information (RFI). The government might reach out to you directly. In this situation, the RFI is used to determine whether you are interested in a particular contract.
Read what you are required to submit.
The solicitation should tell you what information to include in your bid and the date for responding. Read the entire solicitation, including any attachments or schedules. The solicitation should contain all of the information that you need.
- If you have questions, contact the contracting officer for more information.
Research past bids.
You’ll want to submit a competitive bid, so you need some idea of prior winning bids. The website USASpending.gov has a searchable database which will tell you the name of the business earning a contract and the amount of the contract. You can also find bid information at the FBO website.
Respond to each requirement in the bid.
There is no “one size fits all” bid. Instead, read the solicitation and provide all information requested. If you don’t, then your bid will be tossed aside without further consideration.
- The solicitation should tell you where to submit your bid and the deadline. Follow the instructions so that your bid will be considered.
Spend ample time creating reasonable price estimates.
Draw on as much information as possible to come up with a pricing strategy that is attractive to the government but that still allows you to cover costs and make a profit. Consider past winning bids, as well as market research on what are market rates
Ask for a debriefing if you are rejected.
Don’t be surprised if you don’t win your first bid. On average, it can take about two years before you win your first contract. Ask the government agency to go over what you did wrong and how you can improve in the future. Only request debriefing if you are really serious about becoming a government contractor.
- A debriefing session is not the time to get defensive or to challenge the government on why they rejected you. If you think you might get defensive, you should skip the debriefing process altogether.