The federal government is the largest contractor in the United States. This does not mean that getting work from the government is an easy task. Landing a contract with the government is not quite the same as contracting out your product or service privately. Doing business with the government is a process that involves considerable work up front before a contract can be signed.
This report provides consultants and contractors with an overview of the steps involved in obtaining a contract to work for the federal government. State and local agencies will have their own rules, of course, but many of the steps will likely be the same.
Three characteristics set government spending apart from private business spending. These are important to know when attempting to land a government contract:
- Government contracts are heavily regulated to curb misappropriation of funds and ensure uniform policies and practices across agencies.
- The contract terms are the product of careful drafting by teams of government attorneys and have often received distinct meaning through past contract adjudications.
- Government contracts follow a very different procedural path than those of private contracts.
(An Overview: Government Contracts Law Compliments of The Legal Information Institute)
The U.S General Service Administration (GSA) is the purchasing agent for the U.S. government. It is one of three central management agencies in the federal government. The GSA purchases goods and services around the world for federal and civilian agencies, the military, federal courts, and Congress. It employs approximately 14,000 people and has an annual budget of nearly $16 billion. The GSA also provides services to support the work of the government, negotiating contracts that account for $40 billion in goods and services and include everything from toothpaste to stealth bombers. It is through the GSA that consultants and contractors apply for contracts with the federal government.
The main business of the GSA is carried out by three services: the Federal Supply Service (FSS), the Public Buildings Service (PBS), and the Federal Telecommunications Service (FTS). When bidding for a government contract, contractors deal with the FSS.
The FSS handles the supply and procurement responsibilities for a variety of consumer goods. The FSS uses a schedule program that is similar to regular commercial buying practices. It provides commercial products and services at volume-discount prices. The government, however, does not utilize "middle men";— the orders are placed directly with vendors.
Listed below are the steps that need to be taken when beginning the process of applying for a GSA Federal Supply contract:
- Browse the FSS Web site for contractor related information.
- Identify the Federal Supply Schedule that covers your product or service.
- Obtain a copy of the Federal Supply Schedule solicitation for the product or service on the Internet.
- Obtain a Dun & Bradstreet reference check.
- Complete all information in the solicitation.
- Be ready to negotiate your best offer.
The FSS offers two types of contracts: Single Award Schedule and Multiple Award Schedule. Single Award Schedule contracts are made with one supplier for a specific product, at a stated price for delivery to a geographical area. Multiple Award Schedule contracts are given to multiple companies supplying comparable products and services at fluctuating prices. The theory is that the variety of vendors allows the government to select the lowest overall price for a valued item.
Government solicitations are distributed though the Electronic Posting System. You can reply to a solicitation using the Standard Form 1499. Some information required to complete the form includes:
- The basic solicitation.
- A commercial price list and catalog containing the products.
- A manufacturer's price list.
- Documentation to support the difference between the discount offered and the best discount available.
- A letter of supply from the manufacturer of the products being offered.
When deciding whether to grant a contract, the government performs a price analysis in order to reach a fair price with a potential contractor. Some factors that affect the price analysis are the current price for the good or service, the government's estimate, and recent awards. Other pricing factors may include:
- Past and projected value of the item or service, and the current dollar amount of the purchase.
- Current market conditions.
- The extent of the product's competition.
- The inventory of the product or service.
- The difference in price offered to the government and other buyers.
- The most favored customer's estimate.
- Special concessions, terms, and conditions.
- Price adjustment provisions for the product or service.
During negotiations, the main purpose of the government's contracting officer is to come to a consensual agreement with the offering party. The government's main objective in awarding a contract is to get the offering party's best price, so this becomes a key part of the negotiation process. If the contract is awarded, a proposal revision is requested of the contractor. This document confirms the terms and conditions agreed upon by the two parties. The contracting officer will also present to the contractor a copy of the contract and a copy of the catalog/price list as accepted by the government.
Another source for information about government contracts is the Commerce Business Daily (CBD). The CBD is issued by the U.S. Government Printing Office and published daily on the Web by the Community of Science. The publication provides information about government procurement actions, contract awards, and sales of government property. The CBD also features an Alert Service that allows users to create custom searches. The CBD is updated every day, and the user is notified of new announcements by e-mail.
In addition to these features, the CBD also offers:
- Full-field search capability.
- Browse capability for current and back issues.
- Direct links to full-text articles.
- Customized CBD Alert Service.
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