Government contracting can be a great opportunity for many small businesses. Government contracts can be financially lucrative and they can also provide the chance to work on projects that are meaningful to you. The U.S. government is the largest customer in the world. It buys all types of products and services and it is required by law to consider buying from small businesses. Government contracting is not without its complexities, however, so it is important that you are aware of what government contracting entails before making any decisions about pursuing contracts.
While not inclusive, some of the main benefits of being a government contractor and providing goods and services to the Government are:
- Government contracts can be financially advantageous
- Government contracts are generally long term
- Government contractors have the chance to win follow on contracts
- Government contractors can generally expect to always be paid and receive timely payments
- Government contracts can be meaningful projects
- There can be flexibility in the type of work pursued
- Small businesses may be entitled to set-asides with the SBA, which can make it easier to win the work, such as a Service-Disabled-Veteran Owned, Women-Owned Small Business, 8(a) Business Development-and Historically Under-Utilized Business Zone (HUB).
Along with the benefits, there can also be some drawbacks or challenges when working with the Government including:
- Government regulations can be confusing, time-consuming and costly to comply with
- Government contracting can be competitive and challenging to win contracts
- Government contracting requires a high degree of organizational capability
- Contract performance can be closely monitored and regulated by the government
If you’re thinking about pursuing government contracts, it’s important that you weigh the pros and cons carefully to make an informed decision. Government contracting can be a great opportunity, but it may not be the right choice for everyone.
If you are just starting out in government contracting, there are some basic things you need to know. In this series on Government Contracting Basics, we will explore what government contracting is, what you need to know about government contracting and what you need to do to get started, from understanding the rules and regulations to finding opportunities to bidding on contracts.
Government contracting can be a great opportunity for many small businesses, but there are some things you need to know before pursuing contracts, which we will explore in our blog post series.
Want to pursue government contracts, but not sure where or how to begin? Reach out to your PBMares representative or the Government Contracting Team and we can help you get started.