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Government Contracting: What You Need to Know

by Scott Stanberry, CPA

Just about every businessperson knows that the federal government (a.k.a. Uncle Sam) has an enormous impact on business. But you may not know that the government provides a variety of programs and services to assist small businesses, including procurement opportunities, technical assistance, management assistance, and financial assistance. In fact, the policy of the U.S. government is to give small businesses the maximum practical opportunity to participate in federal contracting, and Congress has enacted numerous laws and regulations that promote the participation of small businesses in the federal contracting process.

Look at it this way: There are currently more than 300,000 government contractors, receiving more than $200 billion worth of contracts each year—$40 billion of which goes to small businesses! In addition, the government either initiates or modifies over 350,000 contracts each year, two-thirds of which it grants to contractors outside the Washington, D.C., area. The key to sharing in these contracting opportunities is to understand how the federal government does business.

The Small Business Administration (SBA) has taken the lead in providing a variety of programs and services that assist small businesses in learning the procedures of government contracting. These programs and services include:

    Business development assistance
    Procurement assistance
    Minority small business assistance
    Advocacy
    Financial assistance

Up-to-the-minute information about SBA programs and services can be found on SBA's web site. SBA also provides funding and support to the Small Business Development Centers, who offer counseling services to business owners or potential business owners on all facets of small business matters, including government procurement. Locate the SBDC nearest you for assistance.

Contract Opportunities

The government purchases every type of supply and service, ranging from high-technology, like the Y2K (Year 2000) conversion programs, missiles, ships, aircraft, vehicles, and telecommunication systems, to more mundane items like office furniture, repairs and maintenance services, shoes, computers, food, janitorial services, video equipment, paper, accounting services, and real estate. You name it and the government probably buys it!

prenotazioni migliori alberghi SorrentoEach department within the federal government has a buying office (or contracting activity) that buys whatever the department needs. Currently, the government has more than 2,500 buying offices located throughout the United States. To market successfully in the large and diverse federal marketplace, a contractor must focus on a specific area that offers the greatest opportunity for success based on available resources.

There are several ways to become aware of the buying needs or contract opportunities of a buying office. These include:

Commerce Business Daily (CBD)
The Department of Commerce issues the CBD to notify the public of upcoming purchases or procurements, contract awards, surplus supply sales, and overseas business opportunities. Published Monday through Friday, the CBD contains synopses of proposed contract actions that exceed $25,000. Each edition contains about 500 to 1,000 notices.

Procurement Marketing and Access Network (Pro-Net)
Pro-Net is an electronic gateway of procurement information for and about small businesses. It is a search engine for contracting officers, a marketing tool for small firms, and a link to procurement opportunities and important information. Pro-Net is a virtual one-stop procurement shop.

Federal Procurement Data System (FPDS)
FPDS provides information on federal expenditures for various products or services during the previous quarter or year, the agencies that made those purchases, and the contractors selected. The FPDS compiles statistics on all federal contract awards over $25,000.

Bid Boards
Buying offices must display solicitations between $10,000 and $25,000 on bid boards and, in many cases; the buying offices also include solicitations over $25,000. Bid boards, which work exactly like a bulletin board, are maintained in public locations to allow contractors to review the current solicitation offerings.

Federal Agency Acquisition Forecasts
Each federal agency must compile and make available one-year projections of contracting opportunities that small and small disadvantaged businesses can perform. Most federal agencies announce their acquisition forecasts on the Internet.

Keep in mind, each buying office will use different procedures for purchasing supplies and services; therefore, the best way to market your supplies and services is to contact specific departments to determine exactly how their procurement processes work. Virtually every buying office will supply information on its purchasing activities upon request.

No other industry provides more opportunities for small businesses than government contracting. Anyone looking for more customers or thinking about starting a new business should consider the federal government as a prospect. If you learn the system and are patient and persistent, you can make good money, even big money, doing business with the federal government.

This is far from a complete guide to doing business with your government; see the book Federal Contracting Made Easy for a more complete source, published by ManagementConcepts.com.

> See also: Government Procurement




hotel rooms YorkScott Stanberry, CPA, is an independent consultant with nearly a decade of experience working in government contracting. As a consultant, Stanberry has helped all types of companies land profitable contracts, and in doing so, he has developed and perfected a method for getting noticed, winning the job, and managing the contract from beginning to end.

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