FAQ About Government Contracting

What does the government buy?

Federal, state and local government agencies buy everything from toothpicks and cleaning services to spaceships and cancer research. The key is to determine which government agencies buy the products and/or services you sell and to develop a focused marketing strategy targeting those agencies. The Government Contracting Center Small Business Development Center can help you identify potential government customers and learn how to approach them.

Does the government always award the contract to the low bidder?

No. In many instances the government awards the contract to the company that provides the best value, and this does not necessarily mean the company offering the lowest price. Other factors such as technical capability, past performance and quality may also be considered. The Government Contracting Small Business Development Center can help you interpret a request for bid or proposal so that you understand which evaluation factors will be used in determining who gets the contract.

Does the government pay on time?

Provided your shipping and invoicing documentation is correct and complete, you can expect a timely payment. In fact, federal agencies offer a prompt payment in return for a discounted price, and prefer to pay by Electronic Funds Transfer (EFT) to speed up the payment process. Federal agencies also pay interest on the amount they owe you if they delay payment past the stated terms of the contract. The Government Contracting Small Business Development Center can help you with your paperwork and also help you register to be paid electronically.

Do I need to be on a GSA schedule in order to do business with the government?

No, although it may be beneficial to you in the long run. Think of the General Services Administration (GSA) as a buying activity for other federal government agencies. GSA awards “schedules” or long-term contracts to vendors who provide certain goods and services required by those agencies. Then, when the agencies have a need for a particular product or service, they can buy it from one of the vendors on the schedule for the pre-determined price. A vendor might get lots of business by being on a GSA schedule, but there are no guarantees. The Government Contracting Center Small Business Development Center can help you determine if your company is a good candidate to apply for a GSA schedule as well as help you through the application process.

Do I need to be certified in order to bid on government contracts?

No. Except for certain “set aside” contracts, the government does not require any type of certification for a company to be eligible to bid on contracts. However, being certified as a woman-owned, minority or otherwise disadvantaged business can level the playing field and provide more opportunities for you to bid. Since federal, state and local government agencies have different certification programs with different eligibility factors and application processes, you should first determine which agencies you want to do business with, and then look into the applicable certification programs. The Government Contracting Center Small Business Development Center can help you determine if you are eligible for certification and help you apply.

What are the SBA’s small business programs and where can I find additional information concerning these programs?

Currently there are five social-economic programs managed by the SBA. They are:

  1. 8(a) – The SBA’s 8(a) Business Development Program – named for a section of the Small Business Act, is a business development program created to help small disadvantaged businesses compete in the American economy and access the federal procurement market. Visit SBA’s 8(a) Business Development Program website.
  2. Small Disadvantaged Business (SDB) – While the 8(a) Program offers a broad scope of assistance to socially and economically disadvantaged firms, SDB certification strictly pertains to benefits in federal procurement. 8(a) firms automatically qualify for SDB certification. Visit the Small Disadvantaged Business Certification Program website.
  3. HUBZone – The HUBZone Empowerment Contracting Program was adopted to stimulate economic development and create jobs in urban and rural communities by providing federal contracting preferences to small businesses. These preferences go to small businesses that obtain HUBZone (Historically Underutilized Business Zone) certification in part by employing staff that live in a HUBZone and maintain a “principal office” in one of these specially designated areas. [A principal office can be different from a company headquarters]. The program resulted from provisions contained in the Small Business Reauthorization Act of 1997. Visit the HubZone website.
  4. Women Owned Business – America’s 9.1 million women-owned businesses employ 27.5 million people and contribute $3.6 trillion to the economy, yet women continue to face unique obstacles in the world of business. The SBA is doing more than ever to expand opportunities for women entrepreneurs. Visit the Online Women’s Business Center website.
  5. Veteran and Service Disabled Veteran – Veterans and service-disabled veterans may qualify for certain preferences by providing proof of service and/or service disability classification. You must have Visit the Service-Disabled Veteran-Owned Small Business Program website. You can also visit www.vetbiz.gov.

The 8(a), SDB and HUBZone programs require companies to be certified by the Small Business Administration (SBA).

Are there web sites where I can see what the government is buying?

Yes, the federal government posts many of its contracting opportunities online. The primary site is http://www.fedbizopps.gov, where all federal agencies are required to post contracting opportunities that are estimated to be valued over $25,000. Most agencies also post acquisition forecasts, which are lists of the purchases the agencies expect to make in the coming months, on their home pages. The Federal Acquisition Jumpstation provides links to most federal agency home pages. State of Texas bid opportunities can be found through the Electronic State Business Daily program. You can also visit the Federal Procurement Data System-Next Generation at www.fpds.gov