Is Your Business Ready to Bid on Government Contracts?
This is a question many nonprofits and small businesses come up against as they seek new sources of revenue. Government contracts can be incredibly worthwhile, but they can also be competitive, time consuming, and confusing to navigate—both during and after the bidding process.
What is a government contract?
A government contract is an agreement between a provider of goods and/or services and a local or federal government entity. The provider of goods and/or services may be a nonprofit organization, a company, or an individual. Contracts are the means by which governments procure the products or services they need, and they are typically initiated through a competitive request for proposals (RFP) and a selection process designed to ensure fairness and responsible allocation of taxpayer money.
What does RFP stand for?
An RFP (or Request for Proposals) is a document that government entities issue when they’re looking for contractors. For people like me who specialize in developing proposals, the RFP is our north star! This document typically outlines everything you need to know about the bidding process, including the scope of work, project timeline, required application materials, and submission instructions.
Bidding on a government contract means responding to an RFP and submitting all the materials requested by the RFP. An RFP may request items like:
A cover letter and/or signed offer letter
A narrative response that demonstrates your organization’s methodology and/or approach to the scope of work
Financial documents such as a project budget and fiscal year operating budget
Resumes/bios of key staff
Signed certifications and disclosures form(s)
Once your team submits a bid, your proposal will be evaluated against the bids from other competing organizations. Usually, the RFP will contain a rubric that details how your bid will be evaluated.
The pros and cons of pursuing government contracts
The competitive bidding process.
Pro: Government contracts enable smaller businesses to compete. A competitive bidding process will put your organization in the same arena as some of the larger entities within your industry. Many government offices award priority points to small, local, women-owned, and/or minority-owned businesses, which might work in your favor.
Con: A competitive bidding process is…well…competitive! It’s important to consider the time, effort, and expense of simply preparing a proposal, and to weigh those costs against the likelihood of a positive outcome. Fortune may favor the bold, but the time needs to be right for your organization.
The financial considerations.
Pro: These contracts often pay well. Government contracts can be incredibly lucrative sources of revenue. Creating a winning response to an RFP can be your organization’s avenue toward a well-paying project.
Con: Payment is usually not immediate. Government offices are somewhat infamous for being slow (shocking, I know). This can sometimes translate into delayed payments on completed services
The strict regulations.
Pro: Following regulations builds company reputation. Winning government contracts (and executing on them with fidelity) is a great way to build reputation within the community and will help pave the way for bigger and better opportunities down the road.
Con: There’s so much paperwork! Winning a contract is only half the battle; maintaining compliance with government rules and regulations is a whole other beast. Before responding to an RFP, be sure your organization has all its compliance ducks in a row, plus the capacity to report on performance during the project period.
Your checklist for contract readiness
What does it look like to be ready for government contracts? Use the following questions to help determine your readiness. (Check out a free, downloadable version of this checklist on our website!)
Financial Stability
Is my organization financially stable?
Does my organization have historical financial data to demonstrate evidence of financial stability and sound accounting practices?
Do we have a robust accounting system in place that allows us to track all our expenses?
Capacity
Does my staff have the time and resources to carry out the work we’re proposing?
Does my staff have the time and resources to report on progress and important milestones as the project progresses?
Will we need to hire additional support to complete the proposed project?
Is there an experienced writer on staff who can develop our proposal? Do we have the funds to outsource proposal development to an expert?
Experience & Qualifications
Is our organization’s expertise well-aligned with the RFP?
Do we have a history of successful performance that can serve as evidence of our qualifications?
Compliance
Are we in compliance with city, state, and federal rules and regulations?
Do we have the permits, licenses, certifications, and insurance requirements appropriate for this project?
Do we have a clear understanding of the requirements outlined in the RFP?
Do we have designated personnel who can monitor the organization for compliance?
Nuts and Bolts
Is my organization registered as an authorized vendor (for local government contracts)?
Does my organization have a Unique Entity Identifier and registration with Sam.gov (for federal contracts)?
Does my organization meet the definition of a small business? And/or is our organization certified as a woman- or minority-owned business?
Ready to take the next step?
Bidding on contracts is a tedious process, and certainly not one to jump into without preparation. However, when done well, securing and actualizing on government contracts can be extremely rewarding for your company’s reputation, impact, and bank account.
For further information or to request support, please check out our website at https://thenewleafcollective.com/. One of our expert writers would be glad to assist you.
