Winning a government contract can be very rewarding, but getting there is an extremely complex process, especially if you’re not prepared beforehand.
Luis Batista, a Procurement Technical Assistance Center consultant who specializes in government contracting, helps businesses assess whether they are ready for government contracting by looking at five key areas of a business. They are:
- Past Performance.Past performance, defined by the accumulation of work completed by a business with customers in the public and private sectors, is an essential component in determining a firm’s readiness for government contracting because it is a quantifiable metric, like revenue or years in business. Equally important, many government proposal requests utilize past performance as an evaluation criteria. Therefore, the more relevant past performance a firm has, the more ready they are for government contracting. Typically, the government requires two years of steady past performance.
- Strong Financials.Strong financials are defined by positive cash flow and year-over-year increases in revenue. Therefore, the stronger the financials a firm has, the more ready they are for government contracting.
- Access to CapitalThe more access to capital a firm has, the more ready they are for government contracting. Is your company able to access a line of credit or capital in order to support the costs to perform on a contract?
- Strategic Partnerships.These are the professional relationships maintained by a business with other businesses that offer the same or complementary services in order to support their pursuit of government contracts or performance on government contracts. Therefore, the more strategic partnerships a firm has, the more ready they are for government contracting. In Batista’s experience, the most effective method for identifying and creating business relationships is by attending outreach events and networking events.
- An Orderly Office or Operations.A business with an orderly office is efficiently operated in terms of its administrative, operational and accounting activities, making it better able to perform as a government contractor.
Now that you have a better understanding of what is required to be ready for government contracting, ask yourself: Are you ready?
Procurement Technical Assistance Centers (PTACs) can provide free assistance to small businesses looking to compete for government contracts. You can locate the PTAC closest to you at the Association for Procurement Technical Assistance Centers Website: http://www.aptac-us.org/contracting-assistance/
Once a company is ready for government contracting, SBDC at FIU consultants can help small businesses with a series of next steps that we will explore in future blog posts on GrowBiz. Keep reading!
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