Why State and Federal Contracting Might Make Sense for Your Business

By Christina Jones, Province Consulting Group

State and federal contracting opportunities offer many advantages for businesses of all sizes. These contracts can be lucrative and can stabilize an unpredictable business environment and economy. 

The government marketplace is vast and business owners can have the added challenge of navigating what seems like never-ending red tape, registrations, research, and follow-up. However, strategic planning and perseverance can outweigh the work required.  

Here are the Top Six State and Federal Contracting Opportunities and “How” to Get Started

Opportunity #1 – Steady Revenue Stream

When invoicing the government, you will be paid. Both state and federal governments have regulations ensuring payment and rules in place (FAR regulation and CA Code) that enforce prompt payment in many instances. Adding government customers to your commercial base could add stable contracts to a sometimes unpredictable commercial client base.  

Opportunity # 2 – Diverse Customer Base

Contracting with the government diversifies your customer base, reducing reliance on a single industry or a handful of clients. Federal and state governments are vast entities with numerous agencies and departments, each with its own needs. This diversity can help your business navigate economic downturns and market fluctuations more successfully.

Opportunity # 3 – Long-Term Relationships

Government contracts often lead to long-term relationships. Once you establish credibility and deliver quality services or products, agencies are more likely to continue working with you. These long-term relationships can provide stability and growth opportunities that are hard to find in other sectors.

Opportunity #4 – Competitive Advantage

Winning a government contract can also boost your business’s credibility and competitive advantage in the private sector. It demonstrates your ability to meet stringent standards, manage large-scale projects, and handle complex regulatory requirements, which can attract private sector clients seeking a reliable partner.

Opportunity #5 – Learning and Development

Working with the government often involves navigating complex regulations and compliance standards. While this can be challenging, it can also be a valuable learning experience for your business. It forces you to implement robust processes, adhere to strict quality standards, and stay up-to-date with industry best practices, which can ultimately benefit your operations and competitiveness.

How To Get Started

Now that you can see the value in adding government contracting as a revenue stream, you might ask, “Where do I begin?” Start with the basics: Research, Certification, and Business Development.

Research: State  / Federal / Local (Varies): Determine what region you are willing and able to support (e.g., locally, nationally, and have the resources and capital to do so). Research the top five agencies in this region that buy what you sell (regularly) and target these agencies. Be sure to locate opportunities within your capacity, i.e., those with dollar values similar to what your firm has been paid before for products or services. Alternatively, be prepared to partner with other firms or subcontract to increase your capacity. Finally, research should be a common occurrence. For example, you must consistently research to keep track of market changes and buying patterns.

Get Certified and Registered: Get certified and registered in the categories where you qualify (Small, Minority, Woman-Owned, Minority-Owned, 8(a), HUBZone, LBE, etc.). For example, you may want to get a Small Business certification from more than one agency. It will depend on what certifications your target agencies recognize. Although certification never guarantees a contract, in some cases, it decreases the pool of competition through bid preferences, set-asides, sole source, and local business-only opportunities. Check out State of CA Certification and the SBA for federal certifications.  Searching on the city or county’s procurement page can generally identify local certifications.

Business Development: This is where the challenge begins. Like commercial entities, developing relationships with government agencies takes time and commitment. Be sure to create a govcon marketing strategy that includes gathering intelligence on your target agency(s) buying and marketing preferences, end users, stakeholders, decision-makers, pain points, small business advocates, and liaisons. Use this data to market strategically to your target customers. Couple this with responding to solicitations that are pre-vetted (and hopefully) with agencies with whom you have established a relationship. Consistency, perseverance, and the ability to act quickly when an opportunity presents itself is critical!  

Again, state and federal contracting can be a strategic move as you look to secure steady revenue streams, diversify your customer base, and gain a competitive advantage. These contracts offer more than just financial benefits; they provide business growth, learning, and community development opportunities. Remember, while winning government contracts may be challenging, the rewards can be substantial. 

For more information, contact Christina at Province Consulting Group email info@provinceconsulting.com