| Did you know that federal procurements
under $25,000 don’t undergo the normal bidding process? That means that if
you’re a small business selling products or services, landing a federal contract may
be easier than you think.
The federal government is the ideal resource for small
businesses and independent contractors to tap for projects. Here’s why: The federal
government...
- Assigns billions of dollars in contracts annually.
- Often gives preference to smaller contractors and
consultants
- Is mandated to target smaller firms for contracts less than
$100,000
- Has a huge budget and is frequently a repeat customer
- Will never go out of business
Locating Smaller Contracts
“Smaller” contracts under $25,000 represent
special opportunities for small businesses and independent professionals. However,
contracts at this level aren’t publicly advertised, so you have to know where to look
to find them.
You can locate smaller contracts through a “hidden
market,” where business deals are driven by relationships with federal buyers.
Incidentally, federal agencies generally purchase products and services from small
businesses in their local market. Establishing relationships with these agencies can be a
smart move for small businesses because it:
- Can reveal unadvertised contracts
- Is less competitive
- Results in prompt payment
- Offers the potential for ongoing and repeat business
How the Government Awards Smaller Contracts
The federal government procurement system for contracts
under $25,000 isn’t overly extensive or competitive. The government generally makes
hiring decisions for smaller contracts through micro purchases or simplified acquisitions.
Both of these methods are relatively streamlined, compared to the more formal process of
requests for proposals, quotes and invitations.
Micro Purchase Market
The micro purchase market enables federal managers in the
field to buy goods and services under $2,500 quickly and easily. Managers normally make
these purchases with a government credit card, although a purchase order can also be used.
Government credit cards -- GSA SmartPay cards -- are widely used and are the government
preferred method of payment.
Accepting credit card payments offers government
contractors a variety of benefits. It eliminates the use of purchase orders, which means
fewer forms to complete. It speeds up payment processing and reduces billing, collection
and other administrative costs. But more importantly, accepting GSA SmartPay, allows
companies to remain competitive and become strategic suppliers to government purchasing
card users.
Using credit processing to capitalize on the micro
purchasing system is easy. You simply set up a merchant account that allows you to accept
credit cards. Then conduct business with your local federal agencies the same as you would
with your commercial customers.
The micro market offers contractors the benefit of
receiving same-day purchasing decisions from government agencies. It also allows you to
avoid spending hours putting together bid packages and waiting weeks for responses. Plus,
the system makes it easy to receive repeat business from government organizations that are
satisfied with your work.
Simplified Acquisitions
Simplified acquisitions are more involved than micro
purchasing; yet, they’re more straightforward than formal bidding processes. With
simplified acquisitions, managers solicit three to four informal quotes by telephone,
email, fax or mail. These direct and unadvertised contracts can range from $2,500 to
$100,000 in value. Contracts between $25,000 and $100,000 are publicly advertised.
As with micro purchasing, contractors can receive quick
responses through the simplified acquisitions process. Decisions for project awards are
delivered within one to several days, instead of weeks.
Before you set out to win government contracts, be sure to
define your contracting niche -- whether it’s the micro purchase or simplified
acquisitions market. This will help you effectively focus your marketing efforts for the
best possible results. Good luck!
Copyright © 2005 Robert Moment |
