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Government Contracts for Small Businesses

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Here is an interesting piece of trivia that should make every small business owner happy: Each year government contracts worth over $1 trillion are issued to small businesses in the United States. However, before you start smiling too much, you should know that of the over 22 million small businesses in the United States, only about 1 percent of them participate in any type of government contract bidding.

But that number could increase, if small business owners took the time to learn how to compete for those government contracts. One of the top reasons so few business owners compete for these deals is because they do not know how to find information on contracts that are available for bid. Another reason is that they don’t understand the paperwork process needed to create a competitive bid. And as many small businesses are understaffed, they simply do not have the manpower needed to get their fair share of government contracts.

It is no secret that many small business owners would love to compete for their fair share of government contracts, and over the past few years, more of them are doing exactly that. And according to the Small Business Administration, they are succeeding. Consider these facts:


  • Small businesses won more than 23 percent of all government contract dollars last year, reaching a historic high.
  • Federal contract dollars to small businesses owned by women, minorities, and veterans increased to record levels.
  • Contracts to small firms that are socially and economically disadvantaged increased last year by an astounding 80 percent, from 249,000 to 449,000.
  • The Business Matchmaking Initiative, launched last year, advances the federal government’s goal of giving small businesses a fair chance to bid on federal contracts by connecting businesses directly with federal, state, and local government agencies and large companies across the country to discuss business contracts.

There are several ways to make the process of bidding on government contracts easier, including:


  • Hire an outside consultant to monitor the government contract process. Many small businesses decide to hire an outside consultant who can monitor the various contracts they may be eligible for. It is less expensive than having someone on staff full time, and you don’t have to worry about employees being “stretched too thin” by wearing too many hats at once.
  • Hire an outside firm to monitor the government contract process. An independent consultant will certainly be less expensive than hiring an outside firm, but some business owners prefer to work this way. When you are searching for a firm, make sure you check their references and look for a history of “success stories.”
  • Learn the process yourself. And then teach others in your business how to monitor the government contract process. There have been books written on the subject; buy one and start reading. Or better yet, look for the many government resources online that now feature user-friendly instructions.

The secret to winning any government contract is simple: follow the rules, fill out the proper paperwork, and take care of any necessary follow-up instructions that are passed along to you. When you follow the rules, you reap the benefits: more contracts and an increase to your bottom line.

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