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How to Become a Successful Government Contractor

Now is a great time to enter the world of government contracting. By learning the rules, exploring bidding opportunities and creating a plan, contractors can come out of the economic downturn as a more versatile and profitable company.
By Jacquelyn Grinder
May 12, 2020
Topics
Markets

The COVID-19 pandemic has many projects on hold, but that doesn’t mean there’s no work to be done. Construction companies currently in a holding pattern can use the downtime to prepare for post-crisis work. This is an especially great time to prepare for government contracting since many economic downturns are met with stimulus money that includes construction dollars. We only need to look as far as the 2009 American Recovery and Reinvestment Act, which included billions of construction and infrastructure dollars, to see an example of this pattern.

The following tips can help construction companies looking to use COVID-19 related downtime to prepare for success as a government contractor.

Basic requirements to bid on federal contracts

Government contracts can be lucrative, but there are many requirements that come along with them. These requirements include laws and regulations that must be strictly followed. However, once a business has determined that government contracting is the right path, the following preparatory steps should be taken.

Additionally, companies may need to register with their state to bid on contracts that use a combination of federal and state dollars. Often, this is through a state agency dedicated to industrial relations or labor relations. Check with the U.S. Department of Labor for information on individual state boards of labor.

Keep in mind, these steps are over and above the normal business checklist a company must have in place to do business. For those unsure where to start, the Small Business Administration has a wealth of information available to provide guidance.

Understanding regulations

There are several key laws that govern how a company conducts itself while working on government projects. These laws regulate things such as sourcing materials, product acquisition, limits and rules about who a contractor uses as a subcontractor, wages and the use of apprentices. There are also reporting requirements to be complied with, such as certified payroll.

Knowing the rules is key to successfully contracting with government agencies. The main regulations for federal contracts include:

  • Davis-Bacon and Related Acts (DBRA) govern many aspects of work for government contractors. It applies to federally funded, or assisted contracts in excess of $2,000 for the construction, alternation, or repair of public buildings or public works. DBRA includes wage rates, reporting and other requirements.
  • The Service Contract Act (SCA) governs federal service contracts and it also includes wage rates and reporting requirements. While DBRA would govern construction, SCA would apply to those performing services such as accountants or janitors.

Additionally, there are often state and even municipal regulations in place that may need to be followed. It is every company’s responsibility to know, understand and follow all applicable rules.

How to find government contracts

There is a lot of competition for government contracts, which may deter smaller companies from entering the bidding process. For those prepared to do the work, however, government contracting can be a rewarding new stream of revenue. Smaller companies, including women-owned and service-disabled veteran-owned businesses, may also qualify for set-aside contracts. These are contracts with limited competition to allow certain smaller companies a chance at winning the bid.

Locating government contracts to bid on usually takes a bit of research. While there are several outlets companies can use, the following two databases are official and popular platforms:

  • The System for Award Management (SAM) is a federal website where all contracts over $25,000 must be advertised. This is a great place to look for contracting opportunities.
  • SubNet is a database of subcontracting opportunities. This is a good place for those looking to start out as a subcontractor for an established prime contractor that is already doing government work.

It’s also possible to market to the government by creating a strong profile on databases that government agencies use to find contractors. For instance, profile information on the SAM system is shared on the Dynamic Small Business Search database. This can help companies gain exposure by government agencies actively looking for contractors. For this reason, make sure any information on SAM is comprehensive and correct.

While the COVID-19 pandemic has created a difficult situation for many construction companies, there are still opportunities to be had. For those ready to enter into the world of government contracting, now is a great time to gear up and get ready. By learning the rules, exploring bidding opportunities and creating a plan for government contracting, companies can come out of the economic downturn as a more versatile and profitable business.

by Jacquelyn Grinder

Jacquelyn Grinder is an established content professional with roots in technical writing, writing for the sciences, copywriting and marketing. Currently, Jacquelyn is the content and marketing specialist at eBacon, a construction software company helping customers navigate payroll and compliance issues with the IRS for the past 19 years. Learn more about employee retention credits at www.irstaxcredit.com or visit eBacon.com.

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