Want to Compete for Federal Government Contracting? Here are some guiding principles.

The United States federal government is the single largest customer in the world, allocating hundreds of billions in funding to the Department of Defense and Federal Civilian Agencies for products and services. If you’ve ever considered competing for a federal contract, whether as a subcontractor or prime, here are a few things to keep in mind:

Relationships are essential.
Companies that bid successfully on federal government contracts have worked for years to build relationships at the agencies they hope to serve. Those connections ensure that you’ll have insights into how the organization works, what’s going on in their world, and updates on the timing for new contract solicitation.  There are professional organizations such as Professional Services Council (PSC) and National Defense Industrial Association (NDIA) among others that hold regular industry events for government contractors to connect to agencies and hear about their priorities.

Define your lane and stay in it.
Federal procurements generally require capability and experience in a specific service or product for a defined purpose or population. Specializing in what you do best is critical. It’s best to put your energy behind winning work from one government agency in one discipline. It’s easy to get distracted by a request for proposal (RFP) for work that is tangential to your niche, but it’s more likely to waste time and pull focus away from pursuing one that you’re most suited for.

Plan on a ramp-up time of one to three years.
For companies that are new to bidding on federal contracts, it can take anywhere from one to three years to become a capable contender. Start by reading the business requirements in RFPs for the size and scope of contract you’d like to pursue. There’s a searchable database at the U.S. government’s free site, sam.gov, where you can find contract opportunities by keyword or agency.

While there are timelines for each contract, delays are very common.
The issuing agency controls the pace, and they can issue updates to the content or timing in the original RFP, including requirements to submit additional documentation or complete “challenges” to demonstrate your capabilities in a tangible way. And even after the award, any protests must be reviewed, so winning a contract in May might mean waiting until September for payments to begin. From start to finish, procurements can take anywhere from six weeks to 18 months or longer. It’s a good idea to keep your banking partner updated on any contract delays as bank financing might be a crucial piece during the delay.

The federal government aims to award a significant percentage of its contracting dollars to small businesses, including woman-, minority- or veteran-owned business.
There are resources available to companies in these categories, and the Small Business Administration’s website is a great place to start.

Lauren Shields and Masha Loughlin are financial advisors with Pinnacle’s National Capital Region team in Tysons, VA. They can be reached at [email protected] and [email protected].


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