Learn some of the ins and outs of government contracts and procurement. Expert tips from Tony Parchment of the Black Business Council will be provided.
Government contracts can ultimately skyrocket a small business’s revenue.
They’re proven to be one of the best ways to grow quickly – but they’re not necessarily easy to get.
Landing a government contract takes more than having basic industry know-how. It takes market research, an outstanding service record, a strategic approach to the government procurement process, and more.
Fortunately, patience, consistent effort, and a willingness to learn will help you understand how to approach the sometimes complex process of government contracting.
This guide includes industry-insider tips from Tony Parchment, one of the co-chairs of The Black Business Council and the co-founder of Buchanan & Edwards, an IT services firm that has won over $1B in Federal contracts since its founding in 1998.
Table of Contents:
- What Are Government Contracts?
- What Is The Usual Process To Win A Government Contract?
- How To Identify Potential Government Contracting Clients
- How To Find The Right Government Contracting Clients
- Landing Government Contracts 101
- Your Competitive Edge: Standing Out For Government Clients
- After Landing The Client: Nurturing Relationships And Keeping Compliance
- Final Summary Of Government Contracts For Small Businesses
What Are Government Contracts?
Government contracts are agreements between government agencies and private businesses.
The private company provides a product or service for the government agency based on a payment agreement.
Government contracts can bring in high revenue for small businesses since their budgets can be large. In fact, there are many benefits:
- Long-term and recurring revenue – Adds predictable monthly revenue–especially the case with long-term contracts
- Competitive edge – Standout from competitors by establishing a track record with government work
- Credibility – Add even more credibility to your business and build trust faster in the future with potential clients
- Potential for more government partnerships – Get greater consideration for future government contracts by already having government experience. This creates a positive loop.
Keep in mind that government contracts can differ.
Contracts differ at the local, state, and federal levels. Each level follows its own procurement rules.
Aside from the levels of government, certain industries tend to be more popular with government procurement officers:
- Healthcare
- Information Technology (IT) & Telecommunications
- Janitorial & Commercial cleaning
- Construction
- Security
Yet, regardless of your industry, there’s a high chance that your procurement process has multiple stages. Let’s explore what they are.
What Is The Usual Process To Win A Government Contract?
Here are 5 big stages of government contracting. Understanding these will help you in your proposal strategy.
Pre-solicitation
In this phase, government agencies asses their needs before releasing an official “solicitation document.”
A solicitation document is a whitepaper that breaks down the scope of work and compliance regulations that potential vendors need to know (more on this below).
Pre-solicitation can also involve stakeholder communication, surveys, research, procurement reviews, and more.
Solicitation
In this phase, government agencies are officially ready for contractors and vendors to place bids.
These agencies release their solicitation document. Aside from a scope of work, and compliance guidelines, solicitation documents include deadlines, submission instructions, evaluation requirements, and more.
The time of year can affect the amount of government work needed.
According to Tony Parchment, it’s common to see agencies offer more contracts at the end of the year thanks to more budget availability on average.
Bids And Proposals
After solicitation agreements are released, companies can begin bidding and sending proposals for the contract.
There are usually deadlines associated with bid submissions.
Vendors must showcase their expertise, experience, and action plans at this stage.
Evaluation
In this stage, government agencies evaluate the submitted proposals.
Depending on the number of bids, there could be multiple rounds of evaluation. In this phase, government agencies look closely for expertise, past work, compliance capabilities, and many other factors.
Awarding The Contract
In this stage, a government agency picks a vendor for their contract and makes the offer. This phase can include notifying companies that didn’t win the contract of the decision.
Businesses that didn’t win the contract still have a valuable opportunity to gain feedback on their proposal. Feedback is helpful since it’s an opportunity to improve future proposals.
How To Identify Potential Government Contracting Clients
Identifying the right potential clients is a crucial step. It’s best to begin with market research since research will provide you with details on what government agencies need.
Conducting Market Research
When asked about getting government contracts, Parchment says, “The mistake many Black businesses make is that they forget they’re here to solve a problem.”
He adds that you must demonstrate to government agencies that you can best solve their problem.
But this starts with fully understanding their roadblocks, which is where market research comes in. You can go about market research in several ways:
- Going through government databases
- Looking at annual reports
- Checking out government agency websites
- Attending procurement events
- Visiting online procurement portals
- Going to conferences and government networking events
- Signing up for newsletters
- Evaluating the contracts your direct competitors go for
Research helps you find pain points that government agencies have. By understanding their problems, you can focus your proposals and pitches on those core issues.
This is how you show your value in the proposal phase.
The main idea is simple: Government agencies are almost identical to your usual clients.
They (like your typical clients) choose a product or service provider based on their confidence that the business they choose can fix their problem.
How To Find the Right Government Contracting Clients
Once you understand the gaps the government agencies in your industry have, you can start looking for clients that are a good fit (those who want to buy what you offer).
We recommend focusing on the state and local levels first since there’s usually less competition.
Parchment mentions that the more narrow or niche a problem you can solve, the less competition will usually be in the pool. Less competition also usually means fewer evaluation phases.
Finding government contracts means connecting with people. In Parchment’s experience, attending industry and networking events is the best route.
These events give you powerful opportunities to speak directly with key agency decision-makers.
Parchment recommends taking an in-person approach rather than online since you can speak with officials more personally.
Even better, you’ll find a concentrated number of decision-makers at these events.
Be sure to open conversations and get contact information. Exchanging phone numbers, email, and LinkedIn information should be top of mind.
Remember, the goal of these events isn’t to hard sell. Instead, focus on building relationships and addressing any problems you’ve identified in your research. Hear what people are saying and open the door to an additional conversation if your company can help.
Landing Government Contracts 101
You understand their problems, have identified an offer, and have zeroed in on the right clients. Now it’s time to land the clients, which this section breaks down.
Bidding And Proposals
It’s crucial to review the solicitation document carefully. Make sure you fully understand the solicitation’s requirements and evaluation criteria.
A detailed proposal that clearly addresses the client’s needs and requirements can boost your chances of winning the contract.
Closely following the instructions and requirements for submitting the proposal (including formatting and submission deadlines) are essential to even getting considered.
Your Competitive Edge: Standing Out For Government Clients
Bidding and knowing the contracts you want is only half the battle.
In a typical market, buyers look for the best solutions to their issues. Government agencies are no different, so standing out is crucial.
Your business can stand out based on how you communicate your value.
Articulating value is about how well and fast you can bring clients to their desired solutions.
Communicating your value becomes easier if you hone in on their problem and solicitation requirements.
Another large part of landing the contract is the relationships you’ve built.
If key decision-makers at a government agency already know you, you have the edge of familiarity.
Here are other notable ways to stand out to government clients:
- Case studies – Show your proof of concept with any past government contracts or projects that were very similar. Customer stories are a helpful alternative if you’re new to government contracting.
- Mention what makes your offer and company unique – Mention any key differentiators. These can include a unique way you solve their problem, how you solve it faster, etc.
- Show compliance and understanding of compliance – Demonstrate an understanding of the regulations you must follow in your work. This will give government clients confidence in hiring your company.
- Collaborate with partners – Evaluate what partners you can bring to the project. Expert partners usually add efficiency to service delivery, whether you’re subcontracting or doing a bigger profit share.
- Highlight expertise – If you specialize in a particular area of business that the contract outlines, emphasize it. Experts with specialized expertise tend to stand out more compared to non-experts.
After Landing The Client: Nurturing Relationships And Maintaining Compliance
When asked about building client relationships, Parchment emphasizes two key pillars:
- Providing a great service
- Building interpersonal relationships with your government client
Providing an outstanding service is self-explanatory. You want to deliver on the promises and expectations outlined in your proposal. Doing so leads to client satisfaction and increases the potential to win future contracts.
Building interpersonal relationships, on the other hand, is just as important.
Clients want to like who they’re working with. Likability is a significant factor in why some people get contracts over others.
Start by understanding your client’s goals and motivations. As you continue to do great work, remember to continuously evaluate how well your company follows government compliance.
Final Summary Of Government Contracts For Small Businesses
Government contracts are lucrative opportunities for Black businesses in the community.
Landing a contract takes knowledge, planning, execution, and iteration. You learn more and more lessons along the way, and the process makes more sense each time.
Black businesses should have a solid grasp of what the government agencies in their industry are looking for. From there, they can propose a solution to the agencies’ fundamental problems.
As a business owner, remember the value of interpersonal networking and communication. In the government contracting space, as in private industry, this is just as important to move the needle and land the business.
We hope you gained value from our roadmap for landing government clients.
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