Small Businesses Can Compete for Economic Stimulus Contracts

Posted by editor on March 16th, 2009

A recent Wall Street Journal article, “Opportunity Knocks and Uncle Sam is at the Door,” discussed a current hot topic among small businesses: getting a piece of the $787 billion economic stimulus package. Since the federal government has a goal of awarding 23% of contracting dollars to small businesses each year, and state and local agencies have individual small business goals as well, the time is ripe for small businesses to start selling to the government.

The article, written by Kelly K. Spors, reports:

“Attendance at contracting expos and seminars is up as more companies try to learn the intricacies of government contract work. Many government contracting consultants are also reporting a surge in new inquiries from small companies looking into contracting for the first time.”

Small businesses are diving into the government contracting arena in droves, but with varying degrees of success. While some small businesses are finding new clients and repeat business from government contracting, others find themselves overwhelmed by regulations and unprepared to face the amount of time submitting a proposal and waiting to hear back about a contract award can take.

If your small business is hoping to capitalize on the economic stimulus, there are several ways to improve your chances.

  • Get registered and certified. Take care of the first steps of government contracting, such as getting a NAICS code and registering for the Central Contracting Registration, right away. Don’t wait until you’ve found your dream RFP to start – the extra steps will take time and resources away from crafting your proposal. For a step-by-step walkthrough of what you need to do to get set up for government contracting, I recommend this free white paper: Get Ready to Compete for Government Contracts.
  • Recognize that small is special. I’ve had so many conversations with small business owners who say things like “When I worked at a larger company, we never had success with government contracting, so what chance does my small business have?” Competing for small business contracts is a different kettle of fish altogether. Consider that there are only about 10,000 small businesses registered with the SBA. Of these, only a fraction of them are competing in your area and industry.
  • Team up. Small businesses are usually much more specialized than large businesses, and can’t always fulfill all of a contract’s requirements. Some projects just require a larger work force or a higher volume of work than a small business can produce. If your company can perform on part but not all of a project, consider teaming with another small business to bid on the contract. For more on this topic, read Partnering and Teaming to Win Government Business.
  • Be realistic about timing. If your small business needs more revenue right now, government contracting is probably not the best way to go. Proposals can take weeks to prepare, and it can be weeks more before you hear back about whether you won the contract. Additionally, you may not be paid until after you’ve completed the contract. Do you have enough other work to cover overhead while you work on the project? If not, government contracting may not be right for your business.
  • Subcontract. Just like teaming, subcontracting is a great way for a niche business to break into government contracting. In fact, many small businesses start their government contracting efforts by subcontracting – it allows small businesses to build government experience while letting the prime contractor deal with most of the red tape involved. Plus, it’s a win-win for the prime and subcontractor – a government proposal from a prime contractor with one or more small-business subcontractors is more attractive to the agency. To learn more about finding subcontracting opportunities, read Find Government Prime Contractors for Government Subcontracting.

Of course, in order to bid on economic stimulus funded projects at all, you have to know where to find them. You can track all economic recovery projects by registering for free notification at www.recovery.org.

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Contract Management, Succeed in an Economic Crisis

Tender Match said,

June 24, 2009 @ 2:38 am

Your advice is spot and could be priceless to some small businesses, here in the UK we have the same sort of thing going on, not only with the stimulus package but also the contracts up for the 2012 Olympics is up for grabs and supposedly meant to be getting spread out evenly to small business across the UK, but up in Scotland businesses have only been awarded 3% of the contracts so far. As I said your advice has been and will be priceless to others. Good luck

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