The following is an updated Q&A I originally wrote for Louisville Business First in 2014. It has been updated to reflect some changes since then and I've added some additional thoughts as well.
Question: I own a small business that I'm trying to grow. I hear a lot about other companies getting contracts to sell their services to the government. How can my business get a government contract? We have never done business with anyone other than private companies.
Answer: It goes without saying that businesses need customers. And for businesses looking to grow, finding new customers (as opposed to just selling more to their current customers) is a solid plan.
Governments consume just about every product and service imaginable from consulting services to toilet paper–and a few I bet you have never imagined. In fact, the U.S. federal government is the single largest purchaser of goods and services in the entire world–talk about a whale of a client to land! But its not just the feds, governments of all levels buy a tremendous amount of goods and services. And governments tend to be fairly open about what it takes to establish a business relationship with them–as long as you understand the language government procurement personnel use. In my experience, the bigger the governmental entity (e.g., municipal, county, state, fed's) the more straight forward the process is to offer your services to them.
Register with the government
As with most things, start by doing online research. Google is a great first step. For example, the federal government solicits suppliers and contractors through the website, In fact, the fed's are in the process of rolling out a new, much more streamlined, website: beta.sam.gov . (there is a new version coming 4/26/21; you can download a guide or watch a video overview by clicking here).
The new website offers helpful instructions to businesses that want to sell products or services to the federal government. It also provides detailed information about how to get signed up to view opportunities and register to do business with the government.
Bid (or submit) on a contract
Before you can get a government contract with the feds, you have to register with SAM. Once you are fully registered through SAM, you are ready to start biding on any contract you qualify to perform–you will find the contracts you can compete for through beta.sam.gov. That's right: bid. Most government contracts are competitively bid on and not negotiated–there are, however, many, many contracts that are negotiated, especially where the service requires expertise or is deemed critical and, therefore, less of a “commodity” type offering. If your business offers, for example, engineering or architectural services, you won't be bidding. You will be submitting proposals, much like you do when going after any other project. But beware, if you have not negotiated with the fed's before, you will want to familiarize yourself with the process or at least the framework. Click here for an overview of negotiating a federal contract. Click here for an interesting read regarding the negotiating techniques employed by DoD.
The traditional method of bidding on government contracts involves an initial invitation to bid, or ITB–if you're not used to a lot of acronyms, hold on because government contracting is the Vegas of acronyms!–and a set of specifications that describes what the government is trying to procure. The ITB will include a date and time the bids are due. Unless they are changed formally, the bid date and time are hard deadlines you cannot miss. If a bid is late, even by a few seconds, it will not be considered. Period. Read the last two sentences again, because I can't stress how key this is for the uninitiated.
After the deadline elapses, the government will typically open the sealed bids and select the lowest bid that was responsive to the ITB–if you are submitting to a state or municipality, the opening or standard for award may differ, but is almost always stated in the ITB. Once the bids are opened, the low bidder is often referred to as the apparent low bidder until an “award” or formal contract is executed.
Satisfy any pre-award requirements
Generally, there is a process that occurs after the bids are opened and an apparent low bidder is selected. During this period, the apparent low bidder probably will be asked to provide information about the business to the specific agency or their ability to provide the service called for in the ITB.
There are several purposes for this interim period. First, the purchasing agent or contracting officer must ensure that the apparent low bidder is a responsible bidder. A responsible bidder is a business that is eligible to bid on the contract and is fit and capable of performing the contract. Second, the purchasing agent must ensure the product or service was responsive to the ITB. A responsive bid is an offer of a product or service that meets the requirements of the ITB.
Finally, the interim period provides a bit of a cooling-off period to allow the dust to settle after the bidding. During this period, the apparent low bidder should review its bid to ensure that no errors were made in calculating the bid and start locking in any pricing from suppliers that were not locked in prior to the bid opening. If you find a bid mistake, you may … may … have the ability to ask for relief from the purchasing agent. Note, that you should never expect relief, but, for example, in the event of a mutual mistake or ambiguity in the ITB, you may (I can't stress the importance of my use of may enough) have the ability to get some relief at this point.
If after reviewing the bid the purchasing agent finds the apparent low bidder is the lowest responsible and responsive bidder, the contract will be awarded in accordance with the standard for award published in the ITB (almost always) or the standard that agency is required to follow by law. The award is typically synonymous with the formal execution of the contract though sometimes agencies still require you to put pen to paper on a physical contract.
Notice to proceed
Generally, after the award is made the business will receive a notice to proceed, or NTP–and the acronyms just keep coming–requesting the business begin performing as offered in the bid. Usually, the first step in performance will involve a laundry list of administrative functions, such as submitting additional product data, more information about your business, insurance certificates, labor rates (with overhead cost calculations), etc….
One thing to remember, especially when dealing with the federal government, is that the specifications might not explicitly state all of the contractual requirements you will be held to. Instead, the contract might simply reference requirements by a section number–or even omit certain requirements all together! Welcome to the underbelly of government contracting.
In federal contracts, you will likely see reference to numbers that correspond to the Federal Acquisition Regulations, or FAR. While the FAR applies to all federal agencies, each agency has its own nuances, and a business bidding on government contracts must ensure that exactly what that agency will require is understood. There are a lot of resources for government contractors–especially with respect to doing business with the feds–and if the contract carries significant labor, equipment, or material risk, you should be acquainted with the requirements of the FAR. Here is link to some classes offered you may want to consider.
Consider retaining a consultant
The final and often most worrisome question that most business owners ask is: What about all that red tape? The fact is that doing business with any government body involves a lot of rules and regulations. At the same time, it can be financially rewarding.
The best advice any business new to government contracts can get when deciding whether to bid on a government contract is to sit down with a consultant familiar with government procurement rules and discuss these issues and any other concerns in the context of a specific government agency and contract. To be clear, Jones Law is a law firm and provides legal advice but does not provide marketing or other consultant type services. However, we can give you some referrals. The author has represented numerous government contractors who have had great success using consultants and we are happy to refer you to some of these consultants. You should be aware, though, that there are also a lot of consultants who employ tactics and recommend approaches to government contracting that should not be followed and can result in severe repercussions. As such, you need to do due diligence before retaining a consultant to help you enter the government contracting arena.
If I haven't scared you off yet, you're probably ready to take the plunge into a whole new world. And it can be a very rewarding world. Just remember, when you contract with a government, you are dealing with a customer who has a lot of buying power and the resources to bury you if you fail to perform as required. As such, you need to have a relationship with a law firm capable of helping you navigate the legal issues that will arise. From reviewing opportunities and helping you understand the legal requirements to bid on and perform, to helping you maximize revenue through equitable adjustments and contract modifications once performance is underway–to the extent you have such rights. And that's what Jones Law can do for you with respect to selling your services to the government.
