How to Win a Government Contract

Q: I've heard a lot about procurement, but I don't know how to go about getting a government contract. What's your advice?

A: The best way for a small business to grow is to have the federal government as a customer. The U.S. government is the largest buyer of goods and services in the world, with total procurement dollars reaching approximately $235 billion in 2002 alone.

But many small businesses find it difficult to get a foot in the door. Many government agency buying practices--including contract bundling and the failure to go to outside established vendor networks--make it difficult for small businesses to bid on and win federal contracts. Here are 10 tips on how to get a piece of the billion-dollar federal procurement pie:

1. Decide what to sell. The first thing you must do is figure out what products or services you will sell to which federal agency. Identifying a product or service that a federal agency needs is key. You can consult with an SBA Procurement Center Representative (PCR) for help, either by calling your local SBA office or by visiting www.sba.gov/GC/pcr.html.

2. Contact the small-business specialist. Each federal agency has one. Identify that person and set up a meeting.

3. Save the selling for later. At this meeting, don't spend your time trying to sell to the small-business specialist. He or she is there as a resource and to put you in touch with the right person within the federal agency who will actually do the buying.

4. Keep your cool. Selling to the government is different than selling to the private sector. Extreme aggressiveness can be perceived negatively and might be a deterrent rather than an incentive.

5. Strut your stuff. Depending on your product or service, don't hesitate to lend it out or do a demo at the agency--the more they can see, the more inclined they will be to buy.

6. Get registered. In the meantime, it is always a good idea to register with the Central Contractor Registration. This is the federal clearinghouse for vendors, including small businesses.

7. Don't assume it's automatically in the bag. Keep in mind that you won't win a government contract just because you are a small business--you will win one based on the quality of work that you do and the competitiveness of your pricing as a small business.

8. Get certified. If you are a woman- or minority-owned business, it is always smart to get certified by a state or national entity (for example, through the National Association of Women Business Owners or the National Minority Supplier Council).

9. Be realistic about your capabilities. The government relies on past performance when deciding to award a contract. If small businesses get in over their heads on their first government contract, then chances of repeat work are slim. Start with a smaller project you know you can do well and prove yourself.

10. Finally, do your homework. The surefire way to get a foot in the door at a federal agency is to identify a product or service the agency needs--but that it doesn't know it needs and which you sell.

If you can make these things happen, a contract will be as good as yours.

For more information on winning a government contract, see "Tapping Into the Largest Market in the World."

After only four terms in the U.S. House of Representatives, Congresswoman Nydia M. Velázquez (D-NY) was named Ranking Democratic Member of the House Small Business Committee by her colleagues in February 1998, making her the first Hispanic woman to serve as chair or Ranking Member of a full committee in the history of the House. She has been a vocal advocate of American entrepreneurship and has established numerous small-business legislative priorities, encompassing tax regulations, access to capital, federal contracting opportunities, trade, technology, health care and pension reform, among others.

The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.