The Federal Government is the single largest customer in the world.
Hundreds of billions of dollars per year are spent on products and services. The Federal Government purchases these products and services in a different manner than in the private sector, thus a familiarity with their processes is essential to succeed in this marketplace.
If a purchase of a product or service is over $100,000 (which is the small purchase threshold), the government will issue a solicitation requesting proposals or bids competitively. Oftentimes the lowest bidder is awarded the contract, however sometimes the contract is awarded to the company which provides the best value – which means that price, quality, experience and past performance are all weighed in the final decision.
At times, the government will award contracts directly to companies without a request for proposal or a bid request. This is typically done if the product or service cannot be procured from any other contractor. This is called a Sole Source contract. These contracts are rare because typically many companies have the same capabilities and therefore have the ability to compete.
The government is mandated to award a certain percentage of contracts to certain categories of businesses as set-aside contracts. Examples of set-aside contracts are small business set asides, 8(a) set-aside contracts, Women-owned, Veteran-owned, Native-American owned and HUB Zone set asides. These contracts can be awarded as sole source contracts if the government has had previous experience with one of these contractors and feels confident that they can perform satisfactorily. 8(a) contracts are awarded either through 8(a) competitive bid or sole source.
The government can also award contracts through GWACS (government-wide acquisition contracts). These contracts are awarded to multiple firms – all within a competitive range – to perform on future contracts. The competition is limited to the pre-selected GWAC contractors. Examples of these contracts are GSA Schedule contracts and Job Order Contracts (JOC).
The above is simply an overview of Federal Government contracting and does not cover everything you need to know going forward. But as you can see, this marketplace requires knowledge of the processes in order to gain the ability to successfully win contracts.
Government Business Technology Consultants (GovBizTech) is here to show you how to navigate the complexities of government contracting and we will work to help you achieve success.