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.

 

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.

 

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 

 

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.

 

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.

 

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 passionate about helping our government contracting customers and partners better understand current market conditions affecting the government contracting business to help the companies navigate the market and forge a path ahead in shaping the future of GovCon.

Perspectives on current government contracting trends and market conditions are captured in Deltek’s Clarity 2023: Government Contracting Industry Study that surveyed more than 700 firms across the U.S. and Canada that do business with the public sector. In the published report, government contractors shared that over the past three years, the COVID-19 pandemic presented grave economic challenges, but opportunities also arose for government contractors in the form of new government initiatives, legislation and increased funding.

Today, new challenging economic conditions continue to unfold – from international conflict to supply chain struggles to an inflationary environment. Through these challenges, the government contracting industry has developed tools and strategies to drive their business forward and can look back at an overall positive 2022 while looking to 2023 and beyond with optimism.

Diving into data and insights from a wide variety of companies by size, location, and specialty, as well as functional areas within each, the following high-level themes emerged:

• Similar to other markets, such as architecture and engineering, government contractors’ 2022 performance and outlook for 2023 and beyond remains positive. Public sector revenues are growing as new funding sources and budget allocations continue to come online, a trend that’s expected to continue.
• That said, small disadvantaged businesses are more vulnerable to challenges in the industry and broader economy, particularly inflation. However, it’s worth keeping in mind that their survey results are still positive, even if lagging behind their larger competitors.
• With the external environment more volatile and out of one’s control, government contractors are looking inward to ensure the strength and efficiency of their businesses. Optimizing business processes is an area of emphasis across functions, at or near the top of initiatives from business development to finance and audits to manufacturing, as well as contract management.
• The labor market remains challenging, with headcounts shrinking slightly due to voluntary departures*. Wage inflation continues to put pressure on service providers’ pricing strategies, making it harder to offer the best value on a contract, which would increase win rates while also protecting margins. Aside from compensation, human capital professionals also note remote work and inclusive culture as barriers to attracting top talent.
• Like in previous years of the study, compliance and evolving requirements remain a challenge, with costs expected to (continue to) increase. Again, though, there’s plenty of positivity in the industry, including high confidence around interpreting and tracking complex contract requirements.