Why government contracts?

If you are a small business owner and your goal is to grow your business, then selling to the government is the best thing to do. Small businesses typically have a 5% chance of earning $1 million in sales. If those small businesses went to the US government, that 5% increases to a 48% chance of generating $1 million in sales. The government market is the best opportunity to grow your business.

How good is it to sell to the government in practice?

The United States government has small business goals that they must meet. When looking at how private sector companies award contracts, most look for the cheapest option that can complete the job. However, because it is in the government's best interest to have a strong economy, the cheapest option may not necessarily be the best option for the US government. That is why the government has created different categories depending on the type of business owner you are.

These are some of the categories to which the government can grant.

• WOSB (Women-owned small business)

• DVOSB (Disabled veteran owned small business)

• HUBZone small business (Historically Underutilized Business Zone)

• 8(a) Small Business

We'll discuss this in a later post, but what the government does is create a set-aside for these categories. One reservation is for the government to state "We will reserve this contract specifically for x category", which means that no other category can compete for the contract. This is how the US government maintains market competition while meeting its annual small business targets. These small business targets and Considering that the federal, state and local governments buy just about anything from toilet paper to grounds maintenance service. You CANNOT ignore this market.

punctual payments

Unlike many private sector companies, the government always pays its bills. By law, they must pay within 30 days of presenting the invoice. There are early payment clauses in the contract that oblige them to pay within 30 calendar days. If they don't, companies can start accruing interest. And in certain cases, even file claims.

preference programs

The government levels the playing field. Sometimes in business, a very large company can squeeze the small company by taking a loss on a contract and the small company cannot afford to do so. That doesn't happen in government contracts because the federal government levels the playing field by setting goals that small businesses must meet annually.

The big ones are doing it

• The biggest companies are doing it.

• AT&T - $3,528,000,000

• Boeing - $28,089,000,000

• General Electric - $3,528,000,000

• IBM - $1,111,000,000

• Lockheed Martin - $48,666,000,000

In general, it is more difficult for large companies to win a contract with the government. There are many incentives for the government to meet the goals of small businesses. However, large companies like the ones mentioned above are still competing for a government contract. They understand the value behind government contracts. Although these large companies generate millions in revenue each year, they were once a small business and now continue to do business with the world's wealthiest customer.

Why don't people do business with the government?

Many people think that it is difficult to do business with the government. They have the perception that the bureaucratic government process makes it a pain to deal with a client. Although this may be true in some cases, generally once you've done the initial legwork, doing business with the US government becomes easier.

Fear and excuses speak volumes, but they have never achieved anything great. Registering with SAM and searching for government contacts can be tedious work, but in the end it is rewarding.

In my experience working as a contract administrator for the federal government, I have seen contracts awarded to different types of companies, as long as they can meet the requirement, there is no reason the government should not award them a contract. Initial registration may be timely to complete, but once you're fully registered, doing business becomes easier.

In my experience working as a contract administrator for the federal government, I have seen contracts awarded to different types of companies, as long as they can meet the requirement, there is no reason the government should not award them a contract. Initial registration may be timely to complete, but once you're fully registered, doing business becomes easier.