Small businesses earns government contract.
Roughly one quarter of all government contracts are designated for small businesses. — Fizkes / Getty Images

Government contracting is a great way for small businesses and startups to take advantage of funds set aside for government purchases. Many different types of companies are eligible for government contracts, but it's important to fully understand the process before bidding on one, especially during a pandemic.

What government contracting opportunities are available to small businesses?

Federal, state and local government contracts are open to businesses across most industries. As the largest purchaser of goods and services in the world, the United States government spends hundreds of billions of dollars each year on its contracts, and roughly one quarter of them are designated for small businesses.

Once your business is registered with the U.S. government’s System for Award Management (SAM), you can begin searching for contract opportunities. You can filter your searches by keyword and specifically seek out contracts that are set aside for small businesses. When you’ve found a viable opportunity, you can prepare your bid for the contract.

Keep in mind that it typically takes 30 to 120 days for the government to review submissions and select their contractors, though it can take longer to get started.

“It's not a quick process,” said Sundee Peterson, assistant program manager of the Eastern United States at Strategic Resources, Inc. “You don't just fill out an online application and start doing contract work. It takes time to really get to know a particular organization, build relationships and go through the application process.”

[Read: How to Boost Your Small Business by Becoming a Government Contractor]

How has COVID-19 impacted government contracting?

The COVID-19 pandemic has impacted businesses and organizations across all industries, including the U.S. government. Here are a few of the impacts of COVID and how they could potentially affect contractors.

Contract changes and cancellations may occur due to shifts in supply and demand

Contracts that were approved prior to the pandemic or in the midst of it may need to be altered due to the changing needs of government employees. For example, with offices being closed, janitorial services, water delivery and paper services have been minimized until physical office locations are reopened. As a result, small businesses in industries with low or changing demand right now may see this reflected in available contracting opportunities.

Many government employees are working remotely

If you do win a government contract, you likely won’t be meeting face-to-face with your contract officer or performing services on-site. If you win a service-based contract, you may be subject to the government agency’s telework policies.

Contractors should communicate changes to their ability to fulfill obligations

The communications sent to the government need to be put in writing and directed to the correct departments. If a response is not received from your communications, be sure to follow up. It’s important that your communications include details that support any changes to your timeline or scope of work.

“Contractors should always be looking at their risk management,” Peterson said. “Start looking at different ways of doing business and be proactive by preparing backup plans so that when you meet with the government representative, you can start working through some of those solutions.”

Doing research, taking advantage of contracting databases and seeking subcontracting opportunities are good ways to get started.

What small businesses should know before bidding

Bidding on your first government contract? Here’s what you need to know.

Take advantage of government contracting job databases

There are numerous online resources available to research current open government contracts and demand for your products/services. Some of the biggest include:

Research the contract before bidding

Before bidding on any government contract, it’s important to know exactly what the contract requires and whether your business can fulfill those needs.

“Oftentimes, companies will go after a contract without fully investigating what type of work it is that they're going after,” Peterson said. “The more you know about the type of work being done, the better able you are to meet the deliverables specified in the government contract.”

You can file a protest if you don’t win a contract

If you lose a contract but believe you should have won, you can file a protest to appeal your bid. A bid protest challenges the contract award. Protests can be filed with the United States Government Accountability Office and can be filed against procurement actions by federal government agencies, according to the office. Protests cannot be filed against procurement actions by nonfederal government agencies.

There are subcontracting opportunities available

Small businesses can subcontract with larger companies that have already won federal contracts. In fact, some government contracts stipulate that large companies subcontract some of their work to small businesses.

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Published September 29, 2020