Government contracts can be a great source of revenue – if the government buys what you’re selling. Many vendors hear about the success of other firms, recall tales about $800 hammers and $1200 toilet seats and decide they too want a slice of the government acquisition pie. Certainly there are many vendors who jump in head first and still manage to be successful; others waste valuable time and money just to find out their end of the pool they’re diving into is actually rather shallow. Sure, we know the American Recovery and Reinvestment Act has pumped billions of dollars into government projects to be contracted out to private businesses. But how many of those billions are being spend in your industry?
Government contracting should be treated just like every other major business decision you’ve made. With careful research and planning before you invest any of your time or money. While the United States Government is still the largest buyer of goods and services in the world, some industries will find more opportunities for growth in the federal market than others. Some vendors may find it easy to win prime contracts while others may find greater success sub-contracting or teaming with other contractors. Some industries may already be so populated with successful, established vendors that competing for those contracts may be extremely difficult for a newcomer.
In order to make an informed decision, business owners interested in government contracts need to look at two main data points: Past Contract Awards and Future Spending Goals. Put simply, they need to check what the government has bought in the past and what it needs to buy in the future. Determining which agencies are awarding contracts and to what vendors is also important. With this vital information, you can start to get an idea of what the market is like for your particular product or service. With an informed assessment, you can decide if government contracting can be profitable for your business. You can also use this assessment to determine whether to offer complementary products or services if you are already a successful vendor.
A proper assessment of the federal market should be considered just as mandatory as your CCR registration and ORCA filing when entering into government contracting. If you don’t have the time, knowledge or skill necessary to perform this research, you can still save time and money by getting a Free Government Contracting Profitability Assessment from US Federal Contractor Registration.