What is GovCon?

The government uses four main types of government contracts to acquire goods and services.

• Fixed price contracts: Fixed price contracts mean that the government pays a certain amount for each task regardless of how much time it takes to complete the job.
• Cost-plus contracts: This contract type allows the government to determine the project's total cost before awarding the contract. Once the contract has been awarded, the contractor can charge the government an additional fee based on expenses incurred during the performance period.
• Time and materials contracts: These contracts make it possible for government purchasers to acquire goods or services based on the cost of direct labor hours and materials used.
• Indefinite delivery/indefinite quantity (IDIQ) contracts: The federal government can often be uncertain of the amount of a product or service it will need to purchase. To account for this, they occasionally use Indefinite Delivery Indefinite Quantity (IDIQ) contracts that provide flexibility regarding exact quantities. This contract type is becoming more common.

Guide To Government Contract Types

Learn directly from Deltek’s government contracting industry experts as they examine each of the four different types of government contracts.

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If you want to get started as a government contractor, here's what you need to know.

First, you'll need to find a contracting opportunity. There are many ways to search for new government opportunities. You could use your personal contacts, look through trade publications, or even post a request on social media sites like Facebook. But your best resource is to leverage industry-leading opportunity aggregators like GovWin IQ.

Once you've found a potential opportunity, you'll need to submit a proposal. Proposals explain why your company should be chosen to receive the contract. Your bid will include information about your experience, qualifications, and past performance. It may also include details about your financial stability and ability to meet deadlines.

Once you've submitted your proposal, you'll need to wait for a response from the government. If they award you the contract, you'll need to sign a formal agreement. After signing this document, you'll officially begin working on the project.

Find and Win Government Contracts with GovWin IQ

With the federal government contract industry growing rapidly, there are plenty of opportunities for companies to win more contracts using GovWin IQ.

GovWin IQ helps contractors who sell to the federal government by providing them with early awareness of new opportunities, deep planning intelligence, potential teaming partnerships and the strategic insights they need to be able to compete for more federal governmental contract bids.

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Learn how the leading market intelligence platform can help you find and win more government contracts.

Find More Contracts

Each government department has its special language for contractors. However, acronyms may vary from department to department. Consult your local authorities if your question concerns an issue specific to your region.

• The United States Government Manual: Commonly Used Acronyms
• Acronyms and Abbreviations published by the General Services Administration (GSA)

Here are some common acronyms and abbreviations that you might hear when talking within the GovCon Industry:

• ACQ - Acquisition Contracting Officer
• AR - Administrative Record
• CDA - Contract Disputes Act
• CR - Contract Review
• DCAA - Defense Contract Audit Agency
• DFARS - Department of Defense Federal Acquisition Regulation Supplement
• FATCA - Foreign Account Tax Compliance Act
• GSA - General Services Administration
• LOA - Letter of Award
• OFCCP - Office of Federal Contract Compliance Programs
• PA - Procurement Activity
• PD - Purchase Decision
• PP - Preferred Provider
• RCFC - Rule Changes For Contractors
• REA - Request for Equitable Adjustment
• RFI - Request for Information
• RFP - Request for Proposal
• RFQ - Request for Quotation
• RFR - Request for Reconsideration
• RFS - Request for Schedule
• SO - Statement Of Objection
• SP - Statement of Protest
• ST - Statement of Terms
• UF - Unfulfilled Requirements
• UR - Unresolved Requirement
• VC - Vendor Certification
• VD - Vendor Declaration
• VOSB - Veterans Owned Small Business

Federal agencies award billions of dollars’ worth of contracts every year. These contracts are awarded to businesses that meet specific requirements set forth by the government. Some companies bid on multiple contracts; however, some specialize in one type of work.

A federal GovCon contractor is defined as anyone who enters into a contract with any branch of the federal government. These organizations include both large corporations and small businesses. Contracting companies must follow the rules set forth by the Office of Federal Procurement Policy, which oversees procurement policies for federal agencies.

Both federal government contractors and subcontractors are expected to comply with anti-discrimination laws. Companies cannot discriminate based on race, gender, age, sexual orientation, religion, disability, and veteran status. They must also hire employees from historically disadvantaged groups, such as women, minorities, disabled veterans, and Native 

Free Guide: Federal Contracting 101

Download your free guide to understand the different types of government contracts, how to register to do business with the federal government, and ways to capture new federal sales opportunities.

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If you are interested in selling to State and Local Education (SLED) Agencies, follow these simple steps. To begin the process of going after government contracts and winning more business from SLED government agencies, determine which levels of government they want to sell to and which territories are the best fits for what their business offers.

Next, businesses should register to do business with those agencies by registering the company on their procurement portal. It's important to note that the registration may differ from agency to agency. Because of this, businesses should be targeted on which agencies they want to sell their offerings to. You can use tools like GovWin IQ for SLED Contractors to identify best-fit agencies and opportunities for your business to focus on. This will help you maximize your win rates and effectively use limited resources.

What is State/Local Contracting?

How GovCons Can Win State and Local Government Contracts

With this understanding of how to find state and local agencies that best align with a business's product or service, companies can get ready to start selling to SLED governments and win valuable contracts.

There are several vital steps that a business should take to prepare to sell to the state, local, and education markets effectively:

• Target and research the agencies by studying past procurement habits, identifying upcoming contract renewals, and zeroing in on future spending by looking at budgets and planning documents.
• Organize and fill the sales pipeline with near-term and long-term opportunities to effectively balance the short and long-term business outlook.
• Collect important agency contact information, such as job functions, email addresses, and phone numbers, and make sure the sales representatives know who to reach out to at which agency.
• Understand the agency's goals, recent initiatives, and if they prefer local vendors. The better an understanding of how an agency operates, the better organizations can position themselves to meet their needs.
• Determine if the target agency has opportunities for teaming or if any opportunities fall under set-aside categories.
• Start connecting with decision-makers before the release of a bid or RFP. These established relationships will make it easier to collaborate with decision-makers and improve the chance of winning the work.

Free Guide: State & Local Contracting 101

The SLED contracting market is full of opportunity. Discover how your business can succeed in selling to SLED government agencies across the country.

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Canadian government contracting has similar processes to those in the U.S., making the Canadian market highly accessible to U.S. government contractors. Like in the U.S. public sector market, achieving success in Canadian public sector sales requires knowing how to find the right opportunities, connect with procurement officials or teaming partners, learn about the market, and, most importantly, how to win Government of Canada contracts.

Every government across the globe must secure the goods and services essential to serving its citizens and communities. To do so, they enter into agreements with businesses that can provide the products and services the government needs.

Governments in Canada are no different; whether they are federal, municipal, provincial or territorial governments, they still need to provide what their citizens need. The Canadian government The Canadian government contracting process differs depending on the type of contract or the government entity involved.

The Canadian government market is particularly accessible for vendors based in the U.S. For example, U.S.-based vendors receive 25% to 35% of all Canadian public sector spending, making the U.S. Canada’s top foreign vendor. This is due in large part due to notable trade agreements between the two nations.

Although Canada is open for business to many countries, the agreement relevant to U.S. companies is the World Trade Organization Agreement on Government Procurement (WTO GPA). Under this agreement, U.S. suppliers have access to procurement conducted by most Canadian federal departments, including ten Crown corporations, as well as all ten provinces and three territories. On July 1, 2020, the United States-Mexico Canada Agreement (USMCA)

– known as the Canada United States-Mexico Agreement (CUSMA) to Canadians – came into force, replacing the North American Free Trade Agreement (NAFTA). However, unlike NAFTA, Canada is not a party to the government procurement chapter in USMCA, which pertains only to Mexico and the United States. Canada will maintain government procurement commitments with the United States through the WTO GPA.

When a trade agreement applies to a procurement, the procurement delegation authority must consider a bid from any vendor based in a country that is a signatory to that agreement. The bid must be given equal consideration as all other qualifying bids submitted. Where a procurement does not fall under a trade agreement, a foreign supplier may still submit a bid with no guarantee their bid will be considered. The monetary thresholds above which contracts by Canadian entities are subject to free trade agreements vary by entity as well as by agreement. These thresholds are usually expressed in U.S. dollars.

Free Guide: Candian Government Contracting 101

Discover how your business can get started and expand its sales to federal, provincial, territorial and municipal agencies across the Great White North.

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Contracts are an integral part of the economy. When you buy something at your local grocery store, you're paying for it through a series of contracts. The grocer buys food from farmers, wholesalers, manufacturers, distributors, and retailers. Each step along the way requires money to be paid to someone. Contracts allow businesses to get their hands on these funds.

This process is no different within the U.S. federal government, which awards more than $1 trillion in contracts yearly. That's about 15 percent of the total value of all U.S. economic output. The federal government spends more money on contracts than combined education, housing, transportation, law enforcement, and environmental protection. Furthermore, the U.S. state, local and education (SLED) government awards an average of $1.5 trillion in contracts annually and Canadian government procurement spending is estimated to be worth at least $200 billion Canadian Dollars (CAD) annually, or approximately $150 billion U.S. Dollars (USD) with the current exchange rate.

In addition to being a significant source of income for many businesses, government contracts have other benefits:

1. They create jobs. According to the Bureau of Labor Statistics, over 1 million people were employed by federal contractors in 2016. Today that number is much higher.
2. They promote innovation. A recent study found that new products and ideas often come from small businesses working under government contracts.
3. They can provide access to capital.
4. Small businesses that receive government contracts may qualify for low-interest loans.

At Deltek, we are committed to helping our government contracting customers and partners navigate the evolving market conditions and forge a successful path ahead.

Insights into current government contracting trends and market conditions are captured in Deltek’s Clarity 2025: Government Contracting Industry Study, which surveyed nearly 900 firms across the U.S. and Canada engaged in public sector business.

This year’s Clarity study continues over 16 years of trusted trend analysis, tracking key metrics and industry developments. The results come from a diverse range of government contractors, spanning various sizes and sectors, revealing key overarching themes, including:

• Impact of New Administration: Contractors are facing increased scrutiny on contract performance and need to be more agile to address challenges in 2025.
• Strong Performance in 2024: Despite some metrics falling short of the highs seen in 2022, the outlook remains positive for 2025.
• Efficiency to Combat Inflation: Inflation continues to impact labor and goods costs, with firms focusing on improving internal efficiencies to overcome these barriers.
• Accelerated AI Adoption: More respondents are actively using AI to augment operations, automate workflows, and enhance process optimization efforts.
• Talent Market Pressures: Engaging and retaining talent, attracting quality candidates, and competition in the talent market remain key issues. Cross-training the current workforce has increased in importance.
• Growing Compliance Costs: Compliance costs are expected to rise, driven by Cybersecurity Maturity Model Certification (CMMC) requirements, new cybersecurity tools, infrastructure upgrades, and developing compliance policies.
• Challenges for Small Businesses: Small businesses face distinct challenges, including fewer resources to invest in AI and automation tools, making it difficult to compete with larger firms.

Discover the GovCon Clarity Report

In a time of shifting market dynamics, staying informed is more critical than ever. Gain exclusive access to the key findings from the latest Deltek Clarity Government Contracting Industry Study. This comprehensive report reveals the trends, challenges and opportunities shaping the government contracting industry. Learn how contractors are navigating uncertainty, adapting to change and positioning themselves for success now and in the future.

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