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Keep up to date with the evolving world of government bidding with tips, best practices, trends, research and observations. Let BidNet's knowledge and experience work for you.

State, Local or Federal: Which Bids Are Right for Your Business?

State, Local or Federal: Which Bids Are Right for Your Business?

So you have made the decision to start bidding on government contracts – great! Now you may be wondering just what type of bids to pursue: should you start with state and local contracts, or “jump in the deep end” and go for the more lucrative federal bid opportunities? The decision can be challenging, and the answer will depend on what type of business you operate, where you are located, and the resources and manpower you have at your disposal. The best way to determine which bids are right for your business is to create a business map of your company that details what you do, how much work you can handle during a given timeframe and how you would like to see your business develop in terms of growth. Once you answer these questions, you will be one step closer to determining the government contracts that are a good fit for your business.

The First Step: Figure Out How Much Work Your Business can Handle

For businesses, the first question to answer when deciding whether to pursue state, local or federal contracts is: what kind of products or services can you provide to the government? After that, it’s important to figure out the precise geographic limits that apply to the services you provide by identifying where you are already providing services and which territories would you like to expand into. How many employees you have and the size of your company are also important factors to consider. Next, determine the resources that you have in place and decide if you will need more in order to fulfill a contract. Answering these questions will help you be confident that you can take on a new government contract without taking resources away from your current customers and core business operations.

Bigger Contracts Mean Higher Prices and More Responsibility

Keep in mind that while larger contracts typically mean more money for your company, they also mean more work and more responsibilities. If you plan on bidding on larger opportunities, make sure that you can handle the workload. Take a look at past bid documents for federal, state and local bids to get an idea of contract specs and general guidelines for a particular contract, as well as the rules and regulations that you will have to follow when working with the government. Also note the dollar amount awarded for previous versions of the contract you are interested in. With this information in hand, it will be much easier to know if you and your business can comply with the contract agreement, which will in turn allow you to submit a fair price for the job. Ultimately, the goal is to make sure you have both the resources and manpower needed to complete the job and will be able to do so in the timeframe required by the contract, before you submit a bid.

State and/or local contracts may seem like small jobs compared with federal contracts, but don’t think that they are any less profitable or that they do not require just as much work and responsibility as federal contracts do. Some state contracts reach the million-dollar mark but overall you’ll find that state and local agency budgets are more limited than those of federal government agencies. In total, the federal government spends a little more than double of what state and local agencies do every year, and a good chunk of that federal spending goes to military departments - some of which are larger than multiple state agencies combined.

If you’re a small to medium-sized business and normally work within a single state or a small territory, your best bet is to stick with state bids; if you have very limited resources, you may want to consider pursuing only local bids. These types of contracts will allow you to get your feet wet with government bidding while ensuring that you don’t get overwhelmed by the amount of work required for larger contracts. Even if you’re a larger company working in multiple states, bidding on federal contracts may still not be a good option for you: Remember that if an agency finds that you can’t fulfill the provisions of the contract and aren’t able to complete the job, they - just like any other customer - can terminate the contract with good reason.

After the Decision is Made

After weighing your options, you may decide to only bid on state and local contracts, or to focus your energy on obtaining federal contracts. You may even decide that your business can handle both areas of bidding! Keep in mind that no two bids are alike and that every agency operates differently, meaning that the way you go about submitting a proposal for one contract may be entirely different from another. It’s a good idea to take the time to get familiar with the agency issuing a contract you want to pursue, build working relationships within the industry and make your presence known – this will help you stand out from your competitors.

Once you’ve decided how you would like to move forward, make a plan for how you will go about preparing your bids, including whether you plan to create your proposals yourself or putting one of your employees in charge of preparing the documents and pricing details. Take note of important dates including expected site visits, the bid opening and when the bid must be submitted to the agency. If you plan on having a representative present at the bid opening be sure to schedule their attendance in advance - and of course, that your representative arrives on time.

By familiarizing yourself with all aspects of government bidding and carefully planning a bidding process for your business, you’ll have a better chance of winning the contracts you want to pursue.

Danielle Calamaras |



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