Contracting With the Government: An Overview

If your goal is to do business with the government, this briefing is for you. We are not going to go down the rabbit hole here. Rather, we are going to guide you through this somewhat daunting but potentially lucrative revenue stream, providing a handful of digestible definitions to navigate through it and help you decide if this channel is right for you.

Overview
As the largest employer in the United States, the federal government manages a project budget in excess of $358 billion dollars. In addition to the federal government, each state and local government executes its own projects under separate budgets. At all levels of government, the assessment of department and agency needs for goods and services as well as the hiring of contractors to execute the work is the role of contract officers (aka procurement officers). The contract or procurement departments of the many federal agencies are mandated to award 23% of this fiscal year’s project budget to small and disadvantaged businesses. This 23% is called a set-aside. At the state and local level, set asides are also mandated to ensure that underrepresented groups of business owners are guaranteed to receive contracted government work.

To do business with the various levels of government, your small business must be certified under at least one of the qualifying Small Business Administration’s programs. These programs include the Minority Business Enterprise, Women-owned Small Business, Minority & Women Business Enterprise, and Disabled Veteran Enterprise. Eligibility criteria are straightforward and include having:

S. citizenship status
A registered EIN number
For the WBE and WOSB certifications, women must own at least 51% of the business

After receiving your certification(s), you can then register for the System for Award Management—aka SAM—which is the system that houses the contract opportunities with details of the available contracts.

Here is where the complexity of working with the government comes into play. There are different levels of procurement in the federal government:

Micro purchases: Those value at no more than $2,500.
Simplified acquisitions: These are described as being in a simplified bidding process that is not subject to a formal bid evaluation process or requires a scoring of bids received. The value of a contract in this category is capped at $250,000.
Regular purchases (which are all acquisitions not labeled micro or simplified) are valued at over $250,000, therefore highly competitive; the request for proposals (RFPs) or bids are scrutinized to a more detailed degree. These contracts are not just listed in SAM but must be prominently advertised in that system.

Prime contractor’s vs subcontractors

Primes are the lead contractor responsible for submitting the RFPs, signing the contract, hiring and managing the team, and making sure the deliverables are of good quality. Once prime contractors are awarded a contract, they bring on subcontractors to perform the work. Becoming a subcontractor is a good way to break into government contracting.

Types of government contracts

Most contracts fall into two categories: Fixed price or cost plus (aka cost reimbursable):

Fixed cost: All costs are calculated before the work begins. There is no flexibility in the price of the project.
Cost plus (aka cost reimbursable): This type of contract is used for complex projects in which costs and even scope can change. The contractor is paid an estimate of costs upfront; at the end of the contract, all expenses that were incurred the initial payment is reimbursed. This type of contract requires strict monitoring of costs and tracking of expenses. There is a great degree of trust involved in this type of contract.
Fixed or cost plus, the contractor can receive incentives and rewards for exceeding goals in execution of the contract.

Lastly, the contracting ecosystem is governed by the Federal Acquisitions Regulation (FAR) which establishes the laws and rules on contracting. FAR settles contract disputes and ensures that contract bidding and awards are conducted fairly and without bias.

If you have questions on working with government agencies, public educational institutions, and private, nonprofit organizations, WVF has you covered. Join us for an informative webinar led by Frank Guzman of the Empire Small Business Advisors.

At Woman’s Venture Fund, we respect your privacy. By opting into our SMS messaging service, you agree to the following terms regarding how we handle your data:

Data Collection: We will collect your name, email address, and mobile phone number when you sign up for SMS updates. This information will be gathered verbally over the phone whenever someone contacts our official line or in our physical location.
Data Usage: We use your data solely for scheduling, confirming, and reminding appointments, as well as providing customer assistance and support.
Data Security: We protect your data with secure storage measures to prevent unauthorized access.
Data Retention: We retain your information as long as you are subscribed to our SMS service. You may request deletion at any time.
Message and Data Rates may apply: Your mobile carrier may charge fees for sending or receiving text messages, especially if you do not have unlimited texting or data plan. Messages are recurring and message frequency varies based on communication needs.
Contact Woman’s Venture Fund at 2125630499 or info@wvf-ny.org for HELP or to STOP or CANCEL receiving messages.
Opt-Out: You can opt out of the SMS list at any time by texting, emailing, or replying STOP or CANCEL to info@wvf-ny.org or 2125630499. After unsubscribing, you will receive a final SMS to confirm you have unsubscribed and we will remove your number from our list within 24 hours. You can send HELP for additional assistance, and you will receive a text including our phone number, email address, and website. We are here to help you.
Non-Sharing Clauses: • Women’s Venture Fund does not share your data with third parties for marketing purposes. • Woman’s Venture Fund does not sell, rent, or share the collected mobile numbers or mobile opt-in information with anyone.