Federal Contracts for Small Business Contractors

Getting Federal Contracts

Make no mistake about it. Federal contracting is an important avenue of growth for many small businesses to consider. Want to know the best way to get a federal contract if you own a small business? Persistence.

The government wants to hire your small business.

In fact, the government's goal is to award 23% of federal spending to small firms - some $115 billion annually.

American Express OPEN recently conducted a study on how small businesses get government contracts. The key question asked was: What can less successful small business contractors learn from the strategies and behaviors of successful small business contractors?

Persistence Is The Key to Getting Government Contracts

If at first you don't succeed, try, try (and try) again.

That's the advice of successful government contractors, with 23% touting persistence as an important contributor to government contracting success.

Interestingly, the degree to which this piece of advice was offered by American Express OPEN survey respondents did not differ by region, industry, size of business or gender. However, small businesses owned by men or women of color are significantly more likely to push the power of persistence. Fully one-third (32%) of business owners of color say that persistence has been the key -- making it their top recommendation to small business owners who are just getting started pursuing federal contracts.

The need for persistence can be further illustrated by the fact that active contractors report that it took nearly two years of trying (an average of 1.7 years, or 20 months) to win their first federal contract.

On the flip side, many small business owners who have not yet won their first prime contract are just getting started. Nearly half (42%) of the non-contractors who participated in the survey (i.e. small businesses that have pursued government contracts but not yet been selected to work on a government contract) have started pursuing federal contracting only recently - having gotten registered on the Central Contractor Registration (CCR) database (a necessary first step in the procurement process) in 2008 or later. Thus, many of them will become successful - if they keep bidding - over the next year.

More Bids Means More Government Contracts

American Express OPEN notes that small businesses that are active federal contractors are more successful - at least in part - because they are much more active in the bidding process. Active contractors have submitted more than three times as many prime contract bids as inactive contractors, and more than seven times as many bids as non-contractors. They are also more active in bidding for subcontracting opportunities.

If you have tried to win a government contract and failed, don't give up. Success in the federal procurement arena comes only after an investment of time and money. Active government contractors invest more of both.

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