Start bidding for government contracts

July 18, 2008: 11:15 AM ET

A step-by-step guide to finding government contracts and going for them.

Brian Hall, Westerville, Ohio
I'm a veteran and a minority small-business owner. How do I get more information on bidding for government contracts?

By Blake Ellis, Fortune Small Business contributor
Dear Brian: While potentially very rewarding, procuring government contracts can be a complicated, confusing process. Fortunately, there's a wealth of resources available to help you compete.

Your first option is to seek help from intermediary companies, which are specifically designed to help small-business owners like yourself enter the wide, often intimidating world of contracting - for a fee.

Here's how it works: you register, and they assess your company to see what you have to offer, how your company differs from others, and how you can best match your strengths with the government's needs. They'll help you target upcoming contracts for you to bid on. They will also help you with the daunting task of determining a price to bid on a given project.

While these for-profit companies may claim to have the best success at finding jobs for contractors, Chris Isleib, the Pentagon's spokesman for small-business programs, warns that such Web sites are prone to scams, so go only with a reputable agency, and beware of big, vague promises.

Tiffani Clements, a public affairs specialist for the Small Business Administration, agrees, explaining that the SBA provides the same services as intermediary agencies, but for free. On the SBA Web site there are links that will guide you through the process and help you find opportunities, price jobs, and place bids.

Partnering up

If you decide against paying an agency to help you through the contract bidding process but are hesitant to go it alone, pairing with another company could be beneficial. That way, you'll have the experience and skills of two companies to propel you along. Even if you think you can handle contracting without an intermediary's assistance, partnering may still be a good option for you. Winning government contracts is competitive, so the companies with the best, most relevant references and experience are most likely to be chosen.

Isleib recommends participating in the DoD's Mentor-Protégé Program, which helps small businesses find larger companies to pair with. You can also search within the Central Contractor Registration database and find contact information for any larger company you may be interested in joining with.

Another way of getting your foot in the door of government contracting is to start out as a subcontractor. This way, you build experience and get your name out in your industry.

Who needs your help?

After you have identified your strengths and areas of interest, you can begin searching for clients. The Small Business Administration'sWeb site is a good place to do this, as it lists local agencies and their current needs. Clements says you should also be checking www.fedbizops.com and the U.S. General Services Administration schedules, which each provide different types of opportunities for federal contracting.

Make contact

Once you find agency opportunities you are interested in, contact the agency to find out what paperwork is required to bid for the contract and what else you need to do to proceed with the application process. Before approaching agencies, devise a plan of attack - prepare questions that will allow you to find out what each agency needs from a contractor, what they are having trouble with, and what, specifically, their goals are.

Try to build personal relationships with people in the agency by providing helpful, organized information about your services. Offering free demos or trials can help prove to the agency that you are capable of undertaking the job. Also, keep in mind that the people at this agency are not the only ones you want to impress. A good reputation is key to procuring contracts, and the more you talk to people in your industry, the more they will talk about you.

Register your company, get certified

After finding the jobs your company is best suited to bid for, you will want to register with the Central Contractor Registration. Since you stated in your question that you are a veteran and a minority small-business owner, Clements says that it would be advantageous for you to become certified as such, which can be done by visiting the Small Business Development Center website's "SDVOSB Opportunities in Contracting" page. Isleib says that the DoD also has a very successful program for veteran-owned and service-disabled-veteran-owned small businesses; the agency has set aside around 3% of its $330 billion annual contracting budget for these companies. The DoD and the SBA both provide resources for other minorities and women who desire to become certified as well.

One worry many small-business owners have when getting started with government contracting is the potential for being audited or investigated. However, this is a rare event for small businesses, as the government is usually only concerned enough to audit or investigate a vendor on very expensive jobs.

Give us your advice: Check out recent "Ask & Answer" questions.

Related links:

The SBA and set-asides: How they work

Cash and a strategy for growth

A tiny telecom startup calls for help

Cracking the federal procurement market

Preferential contracting made easy

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