Looking to Venture Into Government Contracting? Expect a Very Lucrative, Yet Tough Journey

Have you ever wondered how government contractors successfully close hundred and even million dollars contract? Have you ever considered the option to venture in the field of government contracting? Well, here is some information that can clarify any doubts regarding this interesting, lucrative, challenging yet nerve wrecking, stressful, difficult industry that is GOVERNMENT CONTRACT.

Where to start? Well, you need to do lots and lots and lots of homework before you can even venture in this industry. It is a lot about politics, redtape. A lot about learning what Federal Acquisition Regulation(F.A.R) allows agencies to do or NOT to do. If you’ve read the IRS regulations, and found it interesting, then F.A.R is the right document for you to READ. However, for the rest of the 99.99999999% of the USA population; F.A.R can put anyone in a death bed, literally, just like the IRS codes.

Once you’ve browsed through the 100 000 pages of the F.A.R, you can then understand what it is all about. But lets simplify everything. Procurement officers have to follow guidelines, have to follow rules and just can’t do whatever they want without dealing with higher hierarchy. The most stressful part of the venture is going into the labyrinth can be a challenging task. Once you’ve entered the doors of government contract, you are going into the MATRIX. There are so many doors, not really knowing which one to knock on to get the right information. However, once you DO knock on the right door, the procurement officer and staff are EXTREMELY helpful. The key is to get to the right door without losing hope in the process.

Government contracting is extremely lucrative. The agency get their budget approved in the first couple of month of the year, which do not usually spend much money until they reach the last quarter, then they realize they have too much money left in their account which HAS to be spent or return to the federal bank account. Every agency wants to utilize every penny given to them or the next year, they will get less. Coming the last quarter, we get every agency to spend close to 60% of their billion dollars budget. That means that they can go and buy a hammer for 500 dollars where they know they can get it at 5 dollars at a local home depot. So why don’t they just go and purchase at the local store, because FAR obligates the agencies to use vendors that are registered with the government, and they need to spend money with these vendors. What that means for the vendors? Well, basically everything. There is a lot of money spent by federal agencies and lots of money going into the vendors’ pockets. There is logic to all of this. USA government is encouraging local business to grow and hire more people to meet the requirements of the government. This is how you get this economy rolling towards a positive result.

Let say you do get a contract awarded, you have to be ready to meet every of the agency’s requirements. There is no margin for error. Any error means delay in payment to you, the vendor. Be ready to have a large cash flow to get this venture going.

SBA (Small Business Administration) helps small seed companies, minority owned business, veterans owned and 8(a) certified companies get government contracts. However, you still need to meet their requirements. Yes, you can get the contract, but you need to fulfill them.

Once it is fulfilled, you need to understand their invoicing method. Not understanding that part can be nerve wrecking, especially if you depend on that money to survive or close other contracts. This is how you can grow in this industry. Use the money of one contract to finance the next one and so one and so forth.

This is the technique to succeed. Leveraging one contract for the other and moving forward to more challenging, bigger and more profitable contracts. The key is patience, determination and perseverance. Never accept NO for an answer, depending of course why they said NO to you. Always ask questions, always carefully read the solicitation and their amendments. It will help you financially and of course, keep you in the game.

Sincerely
Dan Amzallag
Government contract specialist.