Updated July 23, 2020:

Bidding on Business Contracts

The process of bidding on business contracts differs a little from bidding on government contracts. The process of bidding on business contracts can be timely and complex. Fortunately, the result of winning a bid means an increase in work and profits for the contracted business. Bid contracts can last for many years, making them highly desirable to businesses.

The bid process itself is very competitive. One of the best ways to find potential contract bids is to reach out to local companies. Request that your business is added to the current procurement list for potential contractors. Most companies will require that you fill out a packet and provide supporting documentation including the following:

  • Business history information
  • Financial viability
  • Proof of insurance
  • Certifications
  • Specific information about the product or service

Contracts for Bid Pricing

One of the biggest components of the bidding process is pricing. Not only do you have to consider what your competitors are offering, but you also have to come up with a price that still provides your company with a profit. While government contracts often choose the lowest bid, this is not always the case with local companies.

Other characteristics of the bid that can make you competitive include the turnaround time and the quality of work being offered. The final price and terms of the bid can also be further negotiated if your business wins the contract bid.

Bidding on Government Contracts

The United States government has a budget that exceeds billions of dollars for the purchase of services and products. Approximately $100 billion of those contracts are set aside for small businesses. It is possible to land a government contract as a small business.

  • Search for contracting opportunities: The available contracts that are eligible for small businesses are not always easy to find. You can find a list of open government contracts at https://www.fbo.gov/. Each contract opportunity listed on this site is worth a minimum of $25,000.
  • Join a GSA schedule: The General Services Administrator handles pricing negotiations. Then, the government selects needed services from the list.
  • Work for other companies: Businesses that win the bid may require additional contractors to handle the workload. Working in a subcontracting method can give you the experience and reputation you will require to win future government bids. You can find these opportunities at http://web.sba.gov/subnet/search/dsp_search_option.cfm.
  • Use a service: Bid-matching services have databases of available government contracts. You can find more information by visiting your local procurement office.
  • Consider your ability to deliver: It is important to choose a government contract that fits your services offered. You also want to be sure that you can handle the requirements of the bid. Failing often means that you will not be considered for another government contract.
  • Take advantage of advertising: Advertising can help to attract the attention of local procurement officers. Advertise in the yellow pages, attend networking events, join local organizations, and communicate with large corporations purchasing agents.
  • Consider the local government: There are two local governments in every location. These include non-state-chartered and unincorporated townships. Take advantage of both of these opportunities.

Preparing Your Contract Bid

Once you have identified potential contracts to bid on, you will want to create a bid.

  1. Create a profile on the database: The System for Award Management (SAM) is a database that is used by all vendors currently in business with the government. This requires your tax ID number and DUNS number.
  2. Create your capability statement: This is a statement that includes information about your business including key employees, certifications, business suppliers, past performance, and current clients.
  3. Identify the type of bid: This includes information about the type of bid requested.
  4. Identify any additional requirements: Some contracts require that you submit additional documentation.
  5. Research past bids: Evaluating what previous and current companies have bid can be helpful in creating a competitive bid.
  6. Respond to each requirement in the bid: Provide all the required information. Skipping information can disqualify you from the bid.
  7. Spend ample time creating a pricing estimate: Pricing is an important component.
  8. Ask for a debriefing if you are rejected: This can help you submit a bid that is more qualified next time.

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