Successfully Bidding on a Government Contract: Start By Thinking Like the Government

In order to get a government contract for your small business, there are certain steps you should take. Understanding how the goverrnment does business is a vital starting point.

What does a small business owner have to do to actually sign a contract deal with the government? You might imagine that the first thing you should do is get out there out and look for all those government buyers and bid opportunities, right?

Not so fast. Before you take any action at all, there is one thing you need to do that will greatly increase your rate of success in finding opportunities and winning contracts: Learn to think the same way the government does when it does business.

The government thinks of your business as the provider of an end product. therefore, by thinking in terms of output, and not process, you'll be more likely to make a connection leading to a deal.

A commercial company and a government buyer may need the same item, but their approach is very different. For example, when a commercial company looks to buy an item, the buyer is very familiar with the item being bought and knows exactly what type of process—be it welding or stamping or extrusion or metal finishing—is used in making the particular item. Therefore, when it is looking for a supplier of that item, it thinks in terms of the process and looks for a welding company or a stamping house or metal finisher, as the case may be.

On the other hand, when the government buys, it knows the item it needs (e.g., a gear, a resistor, a coffee cup, a spring, a bolt, a pencil), but it does not know the process or type of company that makes the item. The buyer is merely given a requirement (one or more items of some kind) and the technical data package and puts them out for bidding. Therefore, when the government is looking for a supplier, it thinks in terms of the item and looks for companies that have indicated that they can produce that item.

Think about it this way: In the commercial world, a buyer usually has a good idea of what they are buying, what the processes are, what machines are used, etc. On the other hand, government buyers, while very good at getting the job done - on time, in budget and when needed - are acquisition specialists first and not engineers. In other words, they buy the product, not the process.

At a recent congressionally sponsored government procurement conference, the owners of a company that made various items for the railroad industry were disappointed in the event because there were no government offices at the conference that bought railroad items.

Eventually they began to realize that they could use their same equipment and skills to make items for the military, such as tanks and off-road vehicles. They went over to the Army booth and found there were indeed some opportunities for them to support the Army's needs for heavy equipment. It turned out to be a good conference after all!

As you look for contracting opportunities, it is crucial that you think the same way. Think of your business in terms of your output; the products or items that you make and, perhaps more importantly, the items that you are capable of making. Think of how you can use your same equipment and process to make things that the government needs and wants; perhaps things you never even considered before.

If you think in terms of your process, for example, if you think of your company as a screw machine shop, you will be facing a much bigger challenge in trying to find government opportunities. Why? Because the government does not purchase items described as "screw machine products," it buys nuts, bolts and screws.

How you think of your business can affect your success more than you imagine! What are your company's capabilities? Now take that one step further and think one or two levels above you. If you're a subcontractor, what does your customer make? Now think about all the parts and pieces that go into the project and what is your part? What can you work on with other companies to give your customer a "total" package? Do you think they might be interested?

Before you can address what the government is looking for, identify what you really want to offer. We have counseled more companies than we would care to admit that come in and want to know what the government wants because they can provide it. That is not a good business plan. Target what you can do best and go for it.

A Step-By-Step Approach to Successful Government Contract Bids

Once you learn to think about your business the same way government does, you're ready to move along the process that leads up to a successful contract bid. To keep things organized and facilitate this process, you can break down the actions you need to into steps. Keep in mind that although the actions you need to take are presented in a step-by-step fashion, it does not mean that they need to be done one at a time or in the order presented. They can be done simultaneously or in a different order, depending on your circumstances.

Identify Your Customers: The buying offices of the federal government don't know you're out there, but you can find them if you know where to look..
Get Registered: Before you can start actually bidding on contracts, the government needs to know who you are and what you do. A mistake or omission at this point could severely hurt your chances of landing a contract.
Find Bid Leads: The government is required by law to inform all potential contractors of what they're looking for, but are you listening? There are a number of outlets for this information, and one is best for you and your company.
Get the Bid Package: You've got the lead, now you need to get your hands on the specifics. You need to find out how to get the bid package and how to understand its particular pricing arrangement.
Review the Bid: The solicitation you've just received has the potential to be a binding contract. Know what to read and how to read it to maximize your chances for success.
Get Technical Data: To successfully complete your bid, you'll need to do some research. You must understand what types of specs may apply and how to get the correct data to comply with the order.
Price It Out: In a competitive bidding process, price is the determining factor. And if your bid is accepted, it will literally make or break your company, so know what factors to consider.
Write Your Proposal: This is a formal procedure that must be completed exactly, line-by-line.
Submit Your Bid: Submission of your bid is the final step in a contracting process full of fine print. Know the best ways to keep your bid from being kicked out at the last second.