Though pursuing government bid and RFP opportunities can be a very lucrative and stable move for many supplier or businesses, it can also be a complicated and difficult process to navigate. This definition outlines how government purchasing works, how the contractor and governments benefit, as well as some examples of government purchasing. First, what is government purchasing – it is the act of purchasing or obtaining specific goods and/or services from the private sector, by a government agency or entity. But before a government can award a contract, they must find the most desirable individual or business to do the job. This is where the bidding process comes in: bids, also known as requests for proposals, are simply contract opportunities available to private individuals or businesses that must be competitively bid on before they can be awarded. Competition is key during this process, giving all suppliers the chance at winning the coveted government contract. Additionally, this ensures that the government does not overspend or favor a contractor for inappropriate reasons.
As mentioned above, bidding on government contracts is a lucrative and stable move for businesses of every size. First, the government is a stable, reliable client that always has need of everything. Your government client:
– Will always pay their invoices
– Will never move away or relocate
– Will always be in need of goods and services
Additionally, once an individual/business learns the bidding process they can easily bid with multiple government agencies and entities, increasing the chances winning a contract and securing this stable business relationship. Businesses that follow this model can grow quickly and without the risks that can come when working within the private sector. Businesses that work with the government also enjoy the reputation as a “government contractor.” Once a business wins a contract, potential clients from both the public and private sector often see them as both a reliable and desirable supplier because of their government contractor status.
With over 120 agencies and over 16,000 bidding opportunities available at any one time the Federal Government is both a very difficult and profitable government entity to do business with. Federal contracts, on average, are much larger than state or local opportunities – guaranteeing federal contract bidders a bigger payout for their efforts if they win the bid. Federal demands are also the most diverse, with service bids ranging from mining to after school programs, and everything in between. The same applies to bids for goods – from sweet potatoes to gas pipelines. This means the federal government is a viable client for any qualifying contractor or business. Federal level bidding is also the most competitive, making it difficult for new bidders ElectricalRFP.com suggests that new contractors begin bidding with local or state governments first, before going after federal contracts.