9 Tips to Make Government Contracting Easier

Whenever someone asks me about getting into government contracting, I tell them “Don’t do it”. It’s a confusing and frustrating business. However, for some, the payoff may be worth the headaches. Here’s a short list of things that can make life easier.

1. Proposals – know you won’t necessarily win. Ok – this is a mindset thing, but it’s important to know that there’s no guarantee of winning a bid, even if the government end user wants you to win. The contracting shop doesn’t always talk to the end user; even if they do, they have their own processes to follow.

2. Be a subcontractor! The best way to keep life simple and start to gain some past performance is to be a sub. Keep in mind, though, that your customer (the prime) is required to follow a host of regulations and accounting requirements, and some of this will flow down to you. Note: Pay special attention to the payment terms in your subcontract – “pay when paid”, while a fair term, can result in you not getting paid for months.

3. Get a GSA schedule - GSA schedules can be tricky to manage, but they are an “easy button” for the customer. Anytime you can provide your goods or services in a way that requires less work for the government – you increase your odds significantly.

4. Comply with the laws. Seems obvious, but there are a plethora of laws and executive orders that apply only to government contractors; for example, Executive Order 11246 – Equal Employment Opportunity, 41 CFR 61-300 (VETS-4212 reporting), and Drug-Free Workplace Act of 1988, to name a few. Tip – don’t wait until you hit 50 employees to start looking into an Affirmative Action Plan, you need to get an applicant tracking system in place for a year prior.

5. Pricing - get it right. I cannot emphasize this enough. For services, your pricing should include your administrative, fringe, and overhead costs, in addition to the cost of labor, if you don’t want to end up losing money.

6. Accounting – Get a system that can handle GOVCON-specific accounting – and both a bookkeeper and CPA that understands it. Most importantly, familiarize yourself with accounting specific to government contractors – it is not like other businesses.

7. Get a line of credit- or have deep pockets. The government takes a long time to pay. If you have employees, they will need to be paid before you get paid by the government. While your independent contractors and subcontractors don’t need to be paid first, they may be unwilling to wait.

8. Record keeping – be organized and store all records. Audits can and do come years later. You don’t want to be searching for proof of a deliverable from 4 years ago in a Program Manager’s outbox.

9. Get an attorney who knows GOVCON! This is super important – just like the CPA and bookkeeper (and I should have mentioned an HR Person), your attorney needs to be very familiar with the ins and out of government contracting.