Government Contracts: 5 Steps for Starting Out

It’s not uncommon for small businesses to successfully bid on and land government contracts. The first important thing to think about is how much of a workload your company can handle, given its current capacity. Do you have the capital to take on more work? Are you going to need services such as government contractor lending? Once you have answered these questions, you will need to zero in on a government agency’s needs that fit your business’s strengths well.

Government Contracts: Similar to Commercial Contracts

The Statement of Work or SOW for a government contract is similar to that of a commercial contract. It lays out the specifics of the work to be performed, including deadlines and other requirements. Also, given that this is the government, you can expect a thick coating of regulations on top of these expectations. Government organizations typically anticipate that businesses will receive about 15 percent profit on their work. 

Here are 5 steps that can help you secure a government contract.

  1. Do Your Homework 

First, you must prepare thoroughly before preparing your bid for a contract. A large area of the Small Business Association’s website is devoted to educating business owners on how to qualify for government contracts. It gives valuable information on improving competitiveness in this market and fulfilling the SBA’s many requirements once they have been awarded a contract.

  1. Build Relationships

Relationships are essential in business, as they are in any endeavor. Identifying the key decision-makers in your area of interest can help you build relationships and demonstrate your company’s worth when the time comes to bid. In addition, it’s recommended that you contact the contracting officer to discuss any issues you have while preparing your bid. This is because he or she is obligated to be as open as possible with information on the contract’s criteria. You may also use this opportunity to let them get familiar with your business.

  1. Learn the Importance of Subcontractors

One great way to learn the ropes of government contracts is to get employment as a subcontractor for an experienced government contractor. Many experienced business owners recommend this method. In fact, subcontracting is a common practice among multinational corporations nationwide.

  1. Finding more information

Remember that the SBA has a whole section of its website devoted to teaching people about contracting. You may find information on everything from registering your business to receiving assistance when seeking contracts.

The local or regional Chamber of Commerce is an excellent place to start if you want to find out more about the contracting process.

The Federal Procurement Data System is another useful tool for beginners. Data on all government contracts above $25,000 are available on this site. By sifting through this data, you may find out which organizations have contracts and with whom. This will give you a general idea of the kind of contracts for which different government bodies accept bids. is a comparable website that focuses on federal procurement spending.

To aid small businesses in the federal procurement process, the Federal Office of Small and Disadvantaged Business Utilization Directors Interagency Council organizes outreach events and other initiatives. This group’s website offers access to a wealth of information, such as a schedule of community outreach activities.

  1. Plan for Financing a Government Contract

When it comes to securing working capital loans for their businesses, government contractors have a host of possibilities. Payroll, new hires, inventory, and unexpected costs can all be covered, and choices exist for businesses of all sizes and types, regardless of credit history sometimes. 

There are several contractor financing options. These include bank loans, secured and unsecured lines of credit, SBA loans, equipment financing, alternative loans, accounts receivable financing or government invoice factoring, and the government contractor cash advance. These options make fulfilling a government contract both possible and beneficial for businesses that work with them. 


Overall, bidding on a government contract might seem daunting and impossible, but once a small business is awarded the contract, it can lead to growth and success. The possibility of steady income, increased visibility, access to market growth, and trustworthiness are benefits that all small businesses are looking to achieve. But it is important to carefully evaluate the costs and benefits and ensure that the company is prepared to meet the requirements and demands of the contract. 

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