Government contracting is an industry where businesses and contractors are left wondering where to start due to its opaque procedures and overwhelming amount of information. That said, we’ve provided frequently asked questions and basic knowledge you need to know about the government contracting, or GovCon, industry.
1. What Are Examples of Government Contracts?
The federal government offers federal business agreements of different types. They are classified as:
A. Set Aside Contracts
Set aside contracts have two classifications, competitive and sole-source set-aside, which help small businesses to compete and win federal solicitations.
I. Competitive set-aside
Competitive set-aside contracts are offered for small businesses capable of delivering and performing the work. Projects under this contract classification are worth $150,000 or less.
II. Sole-source set-aside
Sole-source set aside contracts are often awarded without a competitive procurement process. A sole-source contract is a standard where only a single business can meet the specification of the agreement. However, the sole-source contract is still available for potential vendors to bid on at some point in the future.
B. Joint Venture
Joint ventures, or two or more businesses working together as a team, can compete for federal business opportunities for small businesses and other business categories such as Historically Underutilized Buiness Zone, or HUBZones; Women-Owned Small Business, or WOSB; and Service-Disabled Veteran-Owned Small Business, or SDVOSB. However, before a company negotiates teaming agreements on joint venture contracts, it must first surpass the Small Business Association requirements.
C. Fixed-Price Contracts
Fixed-price contracts are one of the riskiest types of federal contracting agreements because the contractor is liable for all the expenses, earnings and losses. This is because this contract’s award value doesn’t change.
D. Cost-Reimbursement Contracts
A cost-reimbursement contract evaluates the project expense and budget ceiling that a prime contractor must meet and not exceed, especially without the consent of a contracting officer.
E. Incentive Contracts
Incentive contracts are used whenever contracting opportunities can be solicited for less than any amount of money. Incentive contracts pay up the technical performance of the contractor and help to meet the procurement goals by
- Encouraging federal contractors to make an extra effort
- Making the best use of time and resources and avoiding failures.
F. Indefinite-Delivery Contracts
Indefinite-delivery contracts are used to purchase goods and services when the federal government is unsure of the volume and usage time. Indefinite-delivery agreements are divided into three categories.
I. Definite-quantity
This kind of business arrangement is used when the specific number of products and services are determined before the proposed project.
II. Requirement Contracts
A requirement contract is an agreement where the supplier agrees to supply all the products or services the procuring federal government office needs.
III. Indefinite-quantity contracts
Indefinite quantities are contracts that showcase an undetermined amount of supplies or services needed for the project.
G. Time-and-Materials
Time and materials agreements are the opposite of fixed-price agreements. This type of government contract is frequently used in construction and product development industries where changes in the project’s scope are unnecessary.
H. Labor-Hour
Before labor-hour contracts are offered to businesses, the government first reviewst the material costs and then sets a per-hour labor rate. One benefit of this agreement is that, unlike in time and materials agreements, contractors are not obligated to provide the materials needed.
I. Letter Contracts
Also known as Undefinitizes Contract Actions, or UCAs, this category is used when the government can’t establish a procurement agreement in time. With letter contracts, federal contractors can start delivering the products or services immediately.
2. Are Government Contracts Public Record?
Yes! According to the rules and regulations set by the Freedom of Information Act, or FOIA, the public has the right to request federal contracting records since the resources used for funding came from taxes.
But, if federal solicitationsare public records, does it mean that all the contractors’ sensitive information is provided to the public too? No. Based on FOIA Exemption No. 4, releasing information to the public comes with a few exceptions: trade secrets and commercial and financial details of contractors or businesses will not be disclosed to the public.
3. Where Can I Find Government Contracts Online?
The federal government publicizes contracting opportunities on different government websites. Here are some government websites where you may find lists of federal contracting opportunities:
SAM.gov
SAM.gov is a website where federal opportunities valued at $25,000 or more are posted. Previously awarded federal business agreements are also found on the website, which can help you successfully prepare your bid.
Small Business Search
The Small Business Administration maintains a federal government site called Small Business Search. The site stores and displays all the profiles of businesses registered with the System for Award Management (SAM). The website also provides a list of federal contracts reserved for small businesses.
SubNet
If you feel that your business is not prepared for serving a prime contract, you may still get into federal government contracting by being a subcontractor. Subcontracting with other small businesses or prime contractors will give you a better understanding of how the industry works and help you to get ready for bidding on your first prime contract. Visit SubNet to learn more.
Multiple Award Schedule
The General Services Administration operates the Multiple Award Schedule, also known as the Federal Supply Schedule, a website where long-term and large federal business opportunities are found.
4. How Do I Find Government Contracts on SAM?
As mentioned above, the System for Award Management, or SAM, is an official government website that lists the available federal contracting opportunities. To find the list of opportunities, visit sam.gov/opportunities. One good thing about this website is that you can request an analysis report to review previously awarded contracts.
5. How Do I Find Awarded Government Contracts?
Again, the federal government prioritizes transparency. Aside from the websites mentioned above, you can review the government’s spending history prepared by the Government Accountability Office posted at USASpending.gov. On the other hand, you can use the GSA’s Forecast of Contracting Opportunities to see trends in the federal marketplace.
6. How Do I Find Open Government Contracts?
Most of the time, open federal business opportunities and set aside contract for small businesses are posted on the one-stop website SAM.gov. However, you can use the other websites mentioned previously for more available federal business opportunities.
7. How Do I Get Local Government Contracts?
USA.gov provides information on the vital steps for being part of the federal marketplace. Here is what you need to know to offer your products or services to local governments:
- Contact your local state procurement department office to access valuable development resources and strategies needed for your growth in the industry.
- Figure out the policies and processes of your local state
- Look for contracting opportunities available in your city and country
8. Where Can I Find DOD Contracts?
The DOD usually publishes all its contracting opportunities at SAM.gov. However, you may also check the official DOD website to learn more about them.
9. Is There a List of Federal Contractors?
With thousands of contractors available in the marketplace, getting to know the federal vendors of different industries such as health care, defense, construction and IT may take some time. This is why we have listed them for you:
Top 10 Federal IT government contractors List in 2022
Top 10 Construction Contractors for the U.S. Government in 2021
Top 10 Healthcare and Medical Government Contractors in 2021
10. Are Government Contracts Profitable?
The federal government spent roughly $6.8 trillion in FY 2024. That is how we can conclude that the federal contracting industry offers attractive opportunities to grow small businesses or large corporations.
