![]() |
Image: Yourstory.com |
By Kayleigh Alexandra
If you run a startup, the thought might never
have crossed your mind to seek out contract work with the government. After
all, it isn’t the conventional way forward, and you might well figure that
federal contracts will invariably go to companies with well-established
government links.
But are you missing out by not making an
effort to seek out federal contract work? Let’s go through some reasons why you
might want to give it more consideration.
You can’t get what you don’t
apply for
The notion that government contracts will
always go to giant corporations is something of a self-fulfilling prophecy, as
it spurs small enterprises to hold back from applying for them. Despite this
impression, it’s generally quite viable, especially since the Federal
Government sets a goal every fiscal year for contracting a percentage of its
work to small businesses.
In 2020, the Federal Government awarded 26.01 percent or $145.7 billion in contract work to small businesses, exceeding the yearly goal of 23% and at a $13 billion increase from the previous fiscal year.
Given this ongoing commitment to diversifying
the awarding of government work, now is as good a time as any to pitch for
available contracts. If you succeed in getting one, you may be able to parlay
it into an ongoing working relationship.
The field is becoming more open
The main difficulties with landing federal
contracts are not technical but procedural and organizational, and the problem
with high-level bureaucracy is that it’s incredibly difficult to dislodge. The
flexibility in approach, then, must stem from the applicants.
While this is undoubtedly a frustrating notion
to small businesses everywhere, consider that it also wards off a lot of
possible competition, and that the benefits of securing federal work are
extensive.
Another thing worth noting for programs set
aside for small business is that medium and large businesses are both precluded
from assuming prime roles and limited in their participation as subcontractors.
The government’s mandate for a small business set-aside contract caps
participation by firms other than the small business prime awardee at 49% of
the project effort (factoring in work scope, cost, and time). While this does
mean that a small business must demonstrate (during the proposal and site
survey phases) the ability to carry out 51% of the work internally to win a
contract, it does ensure that a majority of the work genuinely goes to small
business workers.
The advantages of government work
Even disregarding the intimidating process
involved in securing government work, a lot of startups may well think that it
isn’t the right fit for them, particularly given the common perception that
federal contracts are dull, expensive, or overly complicated. Brand image is
very important in the social media age (and more important than people think for contract bidding),
and pitching to popular brands might feel like a better option.
The big advantage to working on government
contracts is that it lends your company a great deal of credibility and cache.
People understand that it’s a difficult marketplace to operate in, and will
view your ability to do so as an indication of your professionalism.
Here are some more advantages:
●
Scheduling Consistency
○
A lot of contract work extends to
substantial periods of time, meaning you plan your financial year around it and
allocate your resources efficiently.
●
Industry Networking
○
You’ll have the chance to meet
people in very important positions in your industry, providing you with the
opportunity to network and establish useful contacts.
●
Financial Certainty
○
Government payments will always be
issued on time and in accordance with the agreed terms. You will never face the
prospect of chasing them for payment.
Meeting the requirements for
contractors
There are specific requirements that
prospective contract work suppliers must meet in order to be granted
consideration, and meeting those requirements is the most challenging part of
the process (with the possible exception of formulating the pitch).
Typically, you’ll need to ensure that your
business system meets government standards for job cost accounting (each job is
unique and must be costed accurately), be fully prepared to deal with thorough
audit requests, and have the capacity to produce project proposals of a
sufficiently-high quality and that your business system meets government
standards
You’ll also want to make sure your company has
adequate insurance. Basic commercial insurance likely won’t cut it— you
should pursue a suitable custom policy that covers everything needed, such as Defense
Base Act insurance if you use overseas employees. The government is
very risk-averse in awarding contracts and you won’t stand a chance if your
proposition seems a little rocky.
To navigate those murky waters, it’s generally
best to consult a specialist. This website offers a great deal of information
for free, but there are also paid consultants you can hire to help get your
business ready to be viable for contract bidding. Here are a couple of you can
consider:
●
Judt Bradt: https://www.linkedin.com/in/judybradt/
●
Mark Amtower: https://www.linkedin.com/in/markamtower/
Working with a prime contractor
Given the complexity and expense involved in
becoming a government contractor, it’s often worth considering the option of
working as a subcontractor for a prime contractor. A prime contractor is a
business that has been granted full control of a government contract, allowing
it to delegate parts of the work should it wish to.
If your startup isn’t ready to battle with
much larger companies for huge contracts, subcontracting work could be a great
first step to take. Most of the advantages we covered earlier still apply, as
well, so it gives you the chance to make some influential contacts.
In summary
It isn’t easy to acquire a government
contract, especially if your business is just getting started, but it isn’t
impossible, and the benefits can be substantial.
If it’s an option you’d like to pursue in the
future, make an effort to begin preparing your organizational structure to meet
federal requirements, and seek out subcontracting work to help you establish
the connections that could help you in the right direction.
ABOUT THE AUTHOR:

No comments:
Post a Comment