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How To Bid On Government Contracts

May 17, 2021, by Michael Diener

business people negotiating a contractEvery year, the United States government awards hundreds of billions of dollars in federal contracts, making it the largest purchaser of services and goods in the world.

Many of these contracts go to small businesses. In fact, the government has set a goal to award at least 23 percent of its federal contracts to smaller businesses.

What To Do Before Bidding On Government Contracts

Businesses can take advantage of this potentially lucrative source of work by bidding on government contracts. However, before placing a bid, there are a few steps that companies must take to be prepared.

Determine Business Classification

Small, minority- and women-owned businesses can take advantage of special opportunities in government contracting. Each industry has its own set of standards for classifying a business as small.

Retrieve NAICS Codes

One of the first steps in the bidding process is determining your North American Industry Classification System code (NAICS), which classifies businesses by type of economic activity and is used by governments and businesses in Canada, Mexico, and the United States.

A research tool is available on the NAICS website that helps businesses determine which codes apply to them depending on the type of work they complete.

Hire a Government Contract Management Firm

Government contractors can hire government contract management firms such as Diener & Associates to help with the bidding process and ensure compliance.

Steps To Bidding On Government Contracts

1. Search For Available Contracts

There are several resources that businesses can use to find contract opportunities as requests for proposals are released by the government. Here are a few of the top resources:

file folder with documents and papers

  • The Contract Opportunities Search Tool at beta.SAM.gov: At this official database of federal contracting opportunities, businesses can create profiles and place bids.
  • FedBizOpps.gov: Government agencies are required to advertise all contracts of more than $25,000 on this website.
  • Dynamic Small Business Search (DSBS): Government agencies use this database, which is maintained by the SBA, to search for small business contractors for their upcoming contracts.
  • GSA Schedules Program: Under this program, a contractor can sell to any government agency with just one source, instead of having separate contracts with each agency.
  • SubNet: Subcontracting opportunities can be found in this database that allows larger enterprises to find small business partners for government contracts. This can be a great way for small businesses that have never worked on a government contract to learn about the process from an experienced enterprise.

2. Find The Contracts Your Organization Can Service

Federal government contracts are published on the FedBizOpps website. Companies can register with the website to receive notifications about opportunities that may be a good match for their business.

For contracts at the state, county, regional, or municipal level, it is necessary to check bidding portals, county purchasing departments, and municipal administration websites. Most of these portals will require some form of registration.

Evaluating contracts to determine suitability can be a time-consuming process. Some businesses dedicate an individual solely to this purpose or enlist the help of outsourced accountants.

3. Determine Your Bidding Method

Businesses must determine the bidding method that will be used for the contract opportunities that interest them. This may come in the form of a Request for Quote (RFQ), Invitations for Bid (IFB), or Request for Proposal (RFP).

These different methods of solicitation require vendors to provide different responses, so it is important to be familiar with the guidelines before bidding.

4. Perform Research On Similar Bid History

Taking a close look at closed contract information can provide valuable insight into how much other vendors have charged for similar services and what kind of competition a business may be facing for a particular contract.

5. Read through The Submission Guidelines Carefully

notary workplace with laptop closeupIt is essential to read through the submission guidelines very carefully and follow them to the letter for the best chance at success.

Government agencies reject bid proposals that do not meet the submission guidelines, so make sure that every rule has been followed and that the proposal is submitted before the closing date and time.

6. Submit The Bid When It Meets All The Requirements

It is important to double-check that everything has been completed thoroughly and accurately before making an official submission. Once all the requirements have been met, the bid can be officially submitted.

7. Wait For The Final Decision

Once a bid has been submitted, the buyer evaluates all offers. The time this takes may vary depending on the type of bidding process used and the number of bidders, but it could take several months for a final decision.

About Diener & Associates CPAs LLC

Diener & Associates CPAs LLC has been a leading provider of professional CPA services in the DC metropolitan area since 1989. We offer a range of consulting/advisory, outsourced accounting, and tax services to assist businesses with their most challenging processes. Regardless of your industry of operation, Diener & Associates CPAs LLC can maximize your organization’s efficiency, scalability, and profitability.

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