The Billion-Dollar World of Federal Contracts
Every single year, the federal government spends hundreds of billions of dollars on contracts. These contracts are for all kinds of things—really, for everything you can imagine, to be honest. The federal government is one of the largest organizations in the world. It owns an astounding 306,000 buildings and leases out another 55,000.
And if you think this is crazy, you should see how many vehicles they own!
Also, fleets of thousands of aircraft and boats and enormous stores of support equipment—think public works, warehouses, and so on.
These contracts are a huge boon for small businesses. In fact, every year, small businesses are awarded roughly one-quarter of all government contracts, to the tune of over $150 billion. But how can you find federal government contract opportunities? Let’s take a look and find out.
Understanding Federal Government Contracts
As with everything related to the government, federal contracts are bound by many regulations. Small businesses can benefit greatly from working with federal agencies to provide services. That said, though, you have to know what you are doing.
The key first step is to understand the different types of federal government contracts.
Here are a few of the most common types, which we have also talked about before here.
- Firm-Fixed-Price (FFP): The contractor is paid a set amount regardless of incurred costs, incentivizing cost efficiency.
- Fixed-price incentive (FPI): This provides an incentive for the contractor to control costs, with the potential for additional profit based on performance.
- Cost-Plus-Fixed-Fee (CPFF): The contractor is reimbursed for all allowable costs plus a fixed fee.
- Cost-Plus-Incentive-Fee (CPIF): Includes an incentive fee tied to performance targets.
- Cost-Plus-Award-Fee (CPAF): Provides an award fee determined based on the contractor's performance.
- Time-and-Materials (T&M): Pays the contractor for labor at predetermined hourly rates and materials at cost.
- Similar to T&M contracts but without material costs, focusing solely on labor.
- Indefinite-Delivery, Indefinite-Quantity (IDIQ): Provides for an indefinite quantity of supplies or services during a fixed period.
- Definite-Quantity Contracts: Specifies a definite quantity of supplies or services to be delivered within a fixed period.
- Requirements Contracts: Fills all actual purchase requirements of designated government activities for supplies or services during a specified contract period.
Blanket Purchase Agreements (BPAs)
- Simplifies the process for fulfilling recurring needs for supplies or services.
- Long-term governmentwide contracts with commercial firms to provide access to millions of commercial products and services at volume discount pricing.
- Awarded based on the lowest bid meeting all requirements.
- Involves negotiation to determine contract terms and pricing, allowing for more flexibility.
- Allows work to begin immediately when negotiations are not finalized but there is an urgent need.
Basic Ordering Agreements (BOAs)
- Establishes terms and conditions for future orders for supplies or services during the agreement period.
Steps to Find Federal Government Contract Opportunities
Alright, so now that you have a good primer with links to the different types of contracts (yes, there are a bunch of them), let’s shift gears and figure out how to get your foot in the door.
1. Research and Preparation
The first step is always to do your research. How successful you are or are not is largely a product of the effort you put in beforehand. First, you have to know whether or not you are eligible for gigs. Certain categories that you can apply to will give you preference over other applicants.
2. Identifying Contract Opportunities
This part is obviously where the rubber meets the road.
The first place to take a look is System for Award Management, commonly known as SAM.gov. This is the official website and source for contract opportunities. There are a bunch of different ways to search on SAM, so get on there and get well acquainted with it.
FedBizOpps, or Federal Business Opportunities, was a standalone platform but is part of SAM.gov, so make sure you get on SAM as it is the focal point for all contracts. If you want to get into the contracting business, start there. But again, it is not the only place, so make sure to check out the other ones.
The GSA eLibrary is a great place to check for GSA Schedule contract opportunities. Info is provided here on GSA’s Multiple Award Schedules, so bookmark this one and check it often.
Another service you need to bookmark and become well acquainted with is the Small Business Administration (SBA). The SBA opens up doorways for small businesses that would otherwise have to compete with major corporations for the opportunity to bid on gigs in the wild. Make sure to check out the SBA Contracting Guide to see if you are eligible, and how to get started if you are.
The Defense Logistics Agency has its own unique portal for submitting bids, which is found at DLA DIBBS. This pertains only to DoD contracts, but since these contracts make up about 60% of all contracts in the federal government, don’t ignore defense contracts regardless of your business size.
3. Networking and Building Relationships
Learning all of the formal systems and official ways to apply for contracts is absolutely important (you can’t bid on any federal contracts without these). But deals aren’t made here; they are made on the trade show floors and other places where and when potential contractors can meet government contacts.
This is also where prime contractors meet potential subs, and procurement officers find primes.
4. Understanding the Solicitation Process
There are two concepts in the solicitation process that you need to be keenly aware of: requests for proposals (RFP) and requests for quotations (RFQ).
RFPs are used when the buyer (often a government agency or large company) needs a solution to a complex problem. They seek detailed proposals that include a method of solving the problem, timelines, costs, and other specific information.
One of the best examples of an RFP is anytime a major construction project needs to be done. Let’s say that a taxiway needs to be completely replaced at a military airfield. An RFP is drafted up, usually by the civil engineering or department of public works departments on the airfield.
There are a few steps in the process that proceed as follows:
Scope of Work (SOW): Describes what the buyer wants to achieve. It’s essential to read this carefully to understand the expectations fully.
Requirements: Lists the qualifications or capabilities that the proposer must have, such as experience, certifications, or technical capabilities.
Evaluation Criteria: Outlines how proposals will be judged. This may include technical approach, cost, past performance, and other factors.
Submission Guidelines: Includes the deadline for submission, format requirements, and any forms that need to be completed.
RFQs are a little different. These are used when the buyer (i.e., the designated contracting officers or government buying rep) needs to procure specific products or services and is concerned about cost. Usually, RFQs are more cut and dry than RFPs.
Here are some of the key components of an RFQ:
- Specifications: Detailed descriptions of the products or services required.
- Quantity: The amount of each product or service needed.
- Pricing Format: Instructions on how to submit your pricing, including any discounts or tiered pricing options.
- Delivery Requirements: Information on when and where the goods or services need to be delivered.
5. Preparing a Competitive Proposal
Preparing a competitive proposal can be the hardest part, especially when you are competing against other service providers who have years of experience. But don’t let that turn you off. You can still write a great proposal.
You need to carefully read the RFP or RFQ to understand exactly what the agency needs. Identify any mandatory requirements, such as specific certifications, experience levels, or technical capabilities.
If there is anything unclear in the RFP (specific requirements, technical requirement), ask questions. Then you need to research the competition and what they offer. Then, you can tailor your services to fit the exact demands of the RFP or RFQ. If you try the ‘shotgun blast’ or cookie cutter approach, those are also the results you will get.
Tips and Best Practices for Success
There are a few tips and best practices you can follow to improve your odds of success.
1. Staying Informed and Updated
First and foremost, always stay in the hunt for new contract opportunities. While the process must be competitive, these are still people who need to trust their contractors and know that their work is solid. Remember, someone’s reputation and even job is on the line based upon who they hire. If they hire poorly and the contractor does lousy work, it comes back on a few people. They need to know they can trust you.
So stay in the know with these focal points of contact.
2. Leveraging Small Business Programs
You need to be leveraging small business programs like HUBZone, 8(a), and SDVOSB if you can. These programs are there to help you get your foot in the door. Also, it benefits large firms to partner with you if you qualify.
3. Seeking Assistance from Greenwood Aerospace
Of course, you can and should seek assistance from one of the most seasoned professionals in the market. Greenwood Aerospace has been doing this for over four decades, and are well acquainted with the process.
Government procurement is complicated, but we make it easy for you. We pride ourselves on fast, efficient procurement support for every size customer, from the smallest parts to large fixed-wing aircraft. Our clients include all branches of the U.S. Military, NOAA, the Department of the Interior, the Department of Energy, along with the largest defense contractors in the United States. We have decades of experience in providing rapid, reliable service to keep your program on track
Parting Thoughts
As an SBA-Certified HUBZone and Native American-Owned Small Business, we have experienced firsthand the significant impact of SBA government contracting within our industry. With over 100 years of combined experience, our team is dedicated to supporting the operational readiness of your aircraft.
We are a trusted provider in the aerospace industry, recognized for our unwavering commitment to quality, prompt service, and extensive expertise in military defense and government aviation needs. Our capabilities include sourcing military aircraft parts, assisting with government contracting, aircraft leasing, and offering in-depth knowledge of aircraft sustainment and government aviation requirements.
Contact Greenwood Aerospace today to learn how we can enhance the efficiency and readiness of your aviation operations. If you're interested in partnering with us, consider becoming a supplier and gaining access to our vast network, which includes thousands of OEM, proprietary, and aftermarket parts designed to elevate your operations to new heights.
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