Our reply is published below for those who may be interested in the cost aspects of entering the government contracting venue.
"Is it too costly to do business with the Government? $89,000 per year and 19 1/2 months on average to win first government contract according to Amex Study . . . is it worthwhile to pursue government contracts?"
If it was too costly to do business with the government, 302,315 companies and some of the largest corporations in the world would not be involved in it. See the below link to contract awards and amounts in 2010 to large enterprises:
Top 10 Contractors FY 2010
1. LOCKHEED MARTIN CORPORATION - $34,288,619,722
2. THE BOEING COMPANY 19,358,512,809
3. NORTHROP GRUMMAN CORPORATION 15,472,742,729
4. GENERAL DYNAMICS CORPORATION 14,903,216,900
5. RAYTHEON COMPANY 14,880,453,061
6. L-3 COMMUNICATIONS HOLDINGS, INC. 7,629,644,919
7. UNITED TECHNOLOGIES CORPORATION 7,330,023,190
8. OSHKOSH CORPORATION 7,197,520,183
9. SAIC, INC. 6,595,330,339
10. BAE SYSTEMS PLC 6,587,705,335
23% of the above amounts must be awarded by the larger businesses on subcontracts to small companies under Federal Acquisition Regulations and large businesses must submit regular data to prove they have met their annual small business contracting goals.
Among the pool of small, small veteran-owned, small minority-owned, HUB Zone and small women owned businesses we have assisted over the last 15 years there have been many who have developed a sound approach to entering the field and managed the expenses quite well.
These enterprises have a good commercial services practice or product which they continue in a commercial cost center of the company. They establish a government contracting cost center and seek teaming arrangements with industry partners and long term government contracts.
They recognize that except for certain unallowable expense items, much of the operating expenses for government contracting can be included in the prices charged to the government and that as a small enterprise they can bill progress payments as often as twice a month.
The benefits in cash flow and stability are obvious once underway.
For more details at a free web site through SCORE assisting companies to enter government contracting, please the below link:
For a recent grants and teaming program recently announced by the SBA and a new set aside program for woman-owned business please see the below links: