Definition: Agreements that outline business transactions between companies and
government entities
Each year, the U.S. federal government and its various agencies
procure more than $300 billion of everything in more than 4,000
categories, ranging from airplanes to zippers. For many products
and services, the U.S. government is the biggest buyer on the
planet. Uncle Sam is also an attractive customer for a few other
reasons:
- The government makes its needs publicly known through such
media as the Commerce Business Daily, a publication listing
numerous government contracting opportunities. (You can find this
publication at many large public libraries.) This is quite
different from most markets, which you have to thoroughly research
to identify their needs.
- Government sales are conducted in an open environment where
there are many rules to ensure that the process is fair.
- The government frequently buys in very large volumes and over a
long period of time. That kind of customer can provide a solid
foundation for growing your company.
- Laws set aside all or part of many contracts for women-owned
businesses, small businesses, minority-owned businesses, and other
firms the government wants to support.
Having the U.S. government as a customer gives your business a
stamp of approval. If you can meet the government's standards for
quality, price and service, odds are good you can meet other
customers' requirements as well.
But there are downsides to selling to the government. It can be
hard to find the proper purchasing agent among the thousands
employed by various branches and agencies of the federal
government. In addition, the rules and paperwork are daunting. The
good news is that there are many sources of help. The SBA's website is one good
place to start looking for help selling to the government. Agencies
like the U.S. Postal Service, the Department of Interior and the
Army, as well as many others, send out solicitations to businesses
that are on their mailing lists. To find out how to get on the
lists, contact the agency you're interested in.
And don't restrict yourself to selling to the federal
government. State and local governmental entities, including
cities, counties, school districts and others, actually purchase
more goods and services than the federal government. There are more
of them and they are smaller, but these government customers can
provide alternative tracks to growth that are just as viable as the
opportunities in Washington, DC.
You can sidestep many of the hassles of winning a government
contract if you subcontract with the main or prime contractor.
Prime contractors, ranging from large defense contractors to
companies that may be smaller than yours, do most of the work to
land the government job. Then they may hire you to fulfill all or
part of it. Find prime contractors by perusing many of the same
resources you would to sell directly to the government.