Overview of the Government Procurement Process and How It Works

1. Create Your Company and Accounts

Before diving into government contracting, ensure all your paperwork is in order. Start by forming your business entity, such as an LLC, and registering it with SAM.gov (System for Award Management) as well as your state and local procurement portals. A critical step is obtaining your CAGE Code (Commercial and Government Entity Code), which identifies your business and links it to relevant Requests for Proposals (RFPs) or Requests for Quotes(RFQs).

If you're unsure what products or services to offer, conduct market research to identify what the government is purchasing in your area. Analyze spending trends and upcoming contracts to align your offerings with market demand. [1]

2. Set Up Your Payment Portal

Once your business is registered, set up a payment portal to ensure you can receive payments for awarded contracts. Many state contracts require you to input banking and company information into a separate portal designed for payment processing.

3. Prepare a Capabilities Statement

A capabilities statement is an essential document that outlines what your business does in a concise and professional manner. Think of it as your company's cover letter. It should include:

Your CAGE Code

A brief overview of your services

Your team structure

Assets or resources that make you competitive (e.g., trucks and drivers for logistics companies)

This document serves as a first impression for contracting officers, helping them understand your qualifications and capabilities.[2]

4. Obtain Relevant Accreditations

If you are a woman-owned or minority-owned business, consider applying for certifications like W/MBE (Women/Minority Business Enterprise) through your local office. To qualify, at least 51% of the business must be owned by a W/MBE-eligible individual.

While these certifications are not mandatory for all contracts, they can provide access to set-aside opportunities aimed at promoting diversity in government procurement. For example, smaller contracts such as IT installations may prioritize W/MBE businesses over larger firms. The application process can be lengthy, so start early while continuing to bid on work.

Government-backed organizations like APEX Accelerators can also assist in navigating the certification process and starting with government contracts. [3]

5. Understand the Bid Process

The bidding process can be daunting due to its extensive documentation filled with legal terminology designed to protect the contracting agency. Bid documents may exceed 100 pages and often include pricing spread sheets.

To streamline this process:

Use AI tools or services like SAMI to analyze bid requirements and create response strategies.

Carefully review all bid details to ensure compliance with submission requirements.

For small businesses without dedicated government services teams, leveraging these tools can save time and improve accuracy. [4]

6. Submit Your Bid

Once your bid is prepared:

Attend pre-bid meetings or calls to understand the competition.

View other bidders as potential collaborators rather than competitors. Subcontracting partnerships are common in large contracts, allowing multiple businesses to combine resources and expertise.

Ensure that any subcontracting relationships are disclosed to the agency, with both prime contractors and subcontractors meeting required standards. [5]

7. Bid Approval

If your bid is approved, you will work closely with the contracting officer to finalize the contract details. This stage often involves creating detailed plans, including recall procedures if necessary, and adhering to the Truth in Negotiations Act (TINA). TINA ensures transparency in pricing by requiring honest disclosure of costs for products or services provided under the contract.[6]

Final Thoughts

We hope this overview helps simplify the government procurement process for you. While it may seem overwhelming at first, following these steps will set you on the right path toward securing government contracts. For more tips and guidance, sign up for our newsletter or follow our YouTube channel!

[1] https://sgp.fas.org/crs/misc/RS22536.pdf

[2] https://www.gsa.gov/sell-to-government/step-1-learn-about-government-contracting

[3] https://www.ojp.gov/doj-guide-to-procurement-procedures

[4] https://crsreports.congress.gov/product/pdf/RS/RS22536/14

[5] https://www.fema.gov/grants/procurement

[6] https://www.acquisition.gov/far/part-15