Many small businesses rely solely on the public sector’s contracting prospects, but few take advantage of the lucrative business opportunities within their local and state government via government contracts. For those that don’t know, the government—local or federal—posts contracts which are bid on by businesses, just like in the private sector. The business that wins the bid gets the job.
To win a bid, your business must have the lowest bid with the right qualifications to fulfill the contract. So, if you’re a bus service wanting to get a contract with a school district, you must bid lower than your competitors and still be able to provide all the services that the school district requires.
In the past, the lowest bidders usually got the contract regardless of qualifications. That led to low wages and even poorer work conditions. But many state and local governments are working on “responsible contracting” to make sure that business that has the lowest bid can fulfill the terms of the contract while maintaining acceptable work conditions and decent wages.
Working with the federal government for contracts can be cumbersome because it is the largest buyer of goods and services in the entire world; it can be especially difficult for a small business. That’s why many small businesses are choosing to work instead with the state or local government, which typically is more pleasant and manageable because they deal with goods and services on a smaller scale. Also, state and local governments usually set aside contracts that are less regulation-ridden for small businesses in particular to take advantage of.
How to Work with State & Local Government
To begin government contracting in your area, register your business with the state procurement office. This office will usually provide helpful instructions for your business’s relationship with the state along with a list of present contracts. Once you register, you are not guaranteed a contract or a bid on a contract. Like most business ventures, success in government contracting requires networking and marketing.
Once you register, and before you start bidding, your business must get a Dun & Bradstreet Number, more commonly known as a D-U-N-S Number, which can be acquired here. This number identifies the physical location of your business utilizing a unique nine-digit number. It’s also free, which is always good news.
When you register your business, you will only be notified of formal procurements, so it’s important to do your research on the state and local government’s market, the agency awarding contracts, and potential competitors. It’s also important to be aware of any and all contracts available to bid on. There are electronic bid notification services that can alert you to updates on new government contracts.
Once you’ve got the ball rolling with government contracts, it’s important that your small business observes industry size standards as regulated and established by the U.S. Small Business Administration (SBA). Often the size standards are judged on number of employees or average annual receipts over time. But there are other standards, as well. Those are worth looking into to ensure your small business is and stays qualified to bid and acquire small business government contracts.
Once all of these steps are followed, you are ready to start bidding on government contracts. Stay tuned for Part 2, which goes over helpful tips to remain competitive in the government contracting market.
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