How To Bid On Government Contracts

When submitting a bid on a government contract, it is essential to understand what the target government entity is looking for and how your company can best meet its needs. This guide explains the basics of how to bid on government contracts and what your company needs to know to pursue government contracts for bid.

A government bid can be any bid, proposal, quote or offer made by one or more companies to do business with the government. If a government bid is accepted, the parties will enter into a government contract.

Government bids are typically issued through a competitive process that requires potential vendors to submit offers and qualifications in response to an invitation to bid (ITB). This process can vary depending on the government entity issuing the ITB and the type of government contract that is being proposed.

Government Contracting 101

When you go to bid on a government contract, you will generally be pursuing one of two types: fixed-price contracts or cost-reimbursement contracts.

• Fixed-price contracts are used by most government agencies. These opportunities generally provide a set price for the work completed or items provided. However, governments can sometimes use an adjustable price level which could contain a ceiling price, a target price (including the target cost) or both.
• Cost-reimbursement contracts, also known as cost-plus contracts, are types of contracts where a government vendor is paid for its allowed expenses up to a set limit, plus additional payment to allow the company to profit from the work. Cost-reimbursement contracts carry additional obligations for the contractor to properly account for the costs they are seeking to be reimbursed for.

Other types of government contracts for bid can include indefinite delivery/indefinite quantity (IDIQ) contracts or time and materials (T&M) contracts. These are less common, though in certain circumstances they can make sense for both the government and the vendor.

Types of Government Contracts

If you are looking to find government contracts on which to submit a bid, there are a few different routes you can take depending on the type of contract you are seeking. Here are three actions to consider taking:

1. Leverage market intelligence. Often contractors, agencies, and other entities post details about government contracts online, including current contract awards, sample contracts, contracting plans, contact information and other valuable data. An easy way to locate this information is to subscribe to the GovWin IQ market intelligence platform. With tools like GovWin IQ, you can quickly access information on government contracts that fit your business.
2. Use your network. Do you have friends or colleagues who have worked as government prime contractors or government subcontractors? Use them as resources for leads and insight on government subcontracting.
3. Talk to large prime contractors, particularly if you are looking to bid on a government subcontract. A small number of government prime contractors control a significant percentage of the government contracting market. Often, these primes have materials explaining how to do business with them.

Find Government Contracts

When you are preparing to submit a bid on work in the public sector market, ask yourself these questions to determine how ready you are and to give yourself the best chance to win government contracts.

1. What are your company's strengths and weaknesses?
2. Where is your company most efficient and cost-effective?
3. How well known are you within your industry and with the government entities that you are trying to do business with?
4. How highly do you prioritize customer service and support, and will you be able to deliver a quality experience at all stages of the government contract lifecycle?
5. Can you demonstrate to government entities in your target market that your products or services are of the highest quality?

If the answers to some of these questions aren’t satisfactory, you may consider making the effort to improve your business capabilities or leveraging market intelligence resources to better prepare your business. Additionally, it may be a good idea to consider working as a government subcontractor or entering into a teaming agreement to become more well-established in the government contracting world before submitting a government bid on your own.

Once a solicitation has been released, a government contractor must prepare its proposal to win the business. Deciding to submit a proposal is not a decision government contractors take lightly. The amount of investment needed, in terms of both time and expense, can be considerable, so if your business is submitting a bid, it needs to take the time to do it right.

Knowing how to respond to the invitation to bid or request for proposals (RFP), who to partner with if necessary, and how to articulate past experience to help secure the winning bid are all important elements in proposal preparations. Relying on fact-based information and detailed analysis is crucial: If the analysis and data is not accurate about an opportunity, vendors will be ill-prepared and less likely to respond appropriately and win the contract award.

Steps to Bid On Government Contracts

1. Select the right type of government contract for your business. Determine whether you are best suited to pursue an opportunity as a prime contractor or serve as a subcontractor on a larger opportunity.
2. Determine which socioeconomic categories, if any, fit your business. These might include designations like women-owned (WOSB), service-disabled veteran-owned (SDVOSB) or minority-owned (MOSB). Aligning with one or more of these categories can make your business more competitive on opportunities.
3. Identify the opportunities your business wishes to bid on and build relationships with the government entities with which you wish to do business.
4. Research your target project and be prepared to submit a quality bid. Make sure to arm yourself with information about the services your business can provide and gather intelligence on both the potential competition and the government that you are aiming to work with.
5. Submit a quality proposal within the given timeframe. Share relevant certifications or awards you may have, highlight your company’s expertise and put your best foot forward.

How To Win Government Contracts

In order to bid on government contracts, you will need to know where to look for the latest opportunities, and the market information that can help your team put forward a winning proposal. GovWin IQ is the go-to for government contractors aiming to bid on government contracts. With more than 7.1 million tracked opportunities and bid notices across U.S. and Canadian governments, GovWin IQ is helping thousands of customers find and win more business.

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