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Writer's pictureKen Larson

10 Misconceptions About Small Business Federal Government Contracting


“SMALLTOFEDS” By Ken Larson


“Federal government contracting is not a quick process; but for many it can provide a steady cash flow and potential growth.


To succeed, a carefully constructed, relationship-driven, marketing and business operations program must be developed, tailored to the federal environment.”

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1. It is easy to become established in the federal marketplace by founding a start up in small business contracting to the federal government

Very few do so. The principle reason for this is lack of past performance records either commercially or as a registered government contractor. Past performance is a major factor in awarding government contracts: The Small Business Federal Government Contracting Past Performance Challenge Small enterprises who succeed in federal government contracting usually have a sustaining commercial business as ongoing support while they learn federal contracting bid, proposal, and pricing, industry teaming and marketing techniques. Your Entry Points Into Small Business Federal Government Contracting


2. Federal government contracting is just like local and state contracting

It is not. Every local and state government agency has their own set of rules and contracting techniques. Although states must meet federal law with regard to interstate trade, EEO and similar matters, they are given wide latitude by the federal government. Most state and local or municipal agencies are very dissimilar in the specifics of how they conduct procurements and are strongly influenced by community ordinances and state law. Federal government contracting has its own set of specific rules (The Federal Acquisition Regulation (FAR) and Cost Accounting Standards (CAS) which cross all agencies. Small business must understand how these rules affect their doing business at the federal level. What Small Business Should Know About FAR and CAS


3. Business can be conducted at the federal level without significant process changes from commercial practices

To succeed in federal contracting the small enterprise must implement processes such as GSA pricing, job cost accounting, forward pricing rates and related matters that are not common in the commercial venue. This takes research, time and process/business systems implementation that many firms overlook until they realize, through hard experience, that they must develop them on the fly to succeed. Federal government contracting is not rocket science but it is different than commercial contracting. A Framework For Federal Government Service Contracting Small Business Systems

4. Federal government contracting can begin immediately after registration

This is a hypothetical possibility but not realistic. Registration simply self-certifies a small business to compete, establishes a Registration Number and a Federal CAGE Code for the firm. Agencies do not go looking for registered firms to do business with them. A niche must be located by the prospective contractor in the form of an agency requirement that fits the company. Or the company must locate industry team member (s) that can use capabilities available from the newcomer. Very small enterprises achieve these objectives to a large scale degree within their first year of pursuing contracts with the federal government.”Marketing to Achieve a Small Business Set-aside Government Contract


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