How to Bid On Government Contracts and Find Federal Contract Bids
One of the most important steps on your journey to win federal government contracts is simply determining how to find opportunities and bid on them. There are many types of contracts the government may write, each of which has advantages and disadvantages for both the contractor and the government customer.
Below, we’ve outlined the basics that businesses new to federal contracting need to understand to learn how to bid on government contracts, including the most common types of bids and opportunities that exist, and the next steps that your business should take.
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How the Federal Government Acquires Goods and Services
Once a federal government agency has determined a need for a particular good or a service, it conducts program management activities and develops an acquisition strategy. Part of this strategy involves determining which contract type will best suit the government’s needs. Most government contracts over $250,000 go through a competitive bidding process overseen by a contracting officer.
This process can be conducted either through sealed bidding or negotiated procurement. The federal government generally posts its competitive bids on sites like beta.SAM.gov.
The Two Major Categories of Federal Contract Bids and Opportunities
Government contracts belong to two general categories: fixed price and cost-reimbursement. The contract type defines the expectations, obligations, incentives, and rewards for both the government and the contractor during an acquisition. The contract type also determines:
- The degree and timing of the responsibility assumed by the contractor for the costs of performance
- The amount and nature of the profit incentive offered to the contractor for achieving or exceeding specified standards or goals
Fixed-price contracts are used by all federal agencies and generally provide a firm price for the work completed or items supplied. However, an adjustable price level is sometimes used for a ceiling price, a target price (including the target cost), or both.
Cost-reimbursement, or cost-plus, is a type of contract where a contractor is paid for all of its allowed expenses up to a set limit, plus additional payment to allow the company to make a profit. Cost-reimbursement contracts carry additional obligations for the contractor in how they account for the costs they are seeking for reimbursement.
Other Ways of Selling to the Government
There are a number of other contracting methods and vehicles that are commonly used by the federal government. Some methods will be a better fit for some businesses depending on the types of products or services that they offer. Two of the most commonly-used methods are Indefinite Delivery/Indefinite Quantity (IDIQ) contracts and opportunities offered as a part of the GSA Schedules long-term government contract vehicles (sometimes called Multiple Award Schedules or Federal Supply Schedules).
The Steps to Take to Bid on Government Contracts – And Win
Once you’ve identified the types of government contracting methods and vehicles that are out there, your next step will be to identify the methods that best suit your business.
You should also determine which socioeconomic categories, if any, fit your business, such as women-owned (WOSB), service-disabled veteran-owned (SDVOSB) or minority-owned (MOSB). These categories can give you a big advantage. For many types of contract, agencies are often required to set aside part or all of a contract for one or more of these categories of business. Similarly, large prime contractors are often required to submit subcontracting plans that require them to utilize small businesses of various socioeconomic categories in carrying out their contracts.
With your focus areas identified, you’re all set to actually identify the opportunities on which your business wishes to bid. You can find those through tools like GovWin IQ, the industry’s leading platform to help you find federal contract bids and gain awareness of upcoming opportunities well before the solicitation is even released.
Looking for more information to help you get registered and ready for federal government contracting? You can download our free report, Federal Government Contracting 101, to understand how the market works at a high level and help you feel more confident in your ability to bid on government contracts.
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