CONSTRUCTION Accounting ARTICLE - Prevailing at procurement
Tips for succeeding in federal government contracting
Target Audience: Construction Industry Professionals, General Contractors, Construction Accountants
It’s no secret that federal procurement is increasing. The passage of the American Recovery and Reinvestment Act of 2009 allocated $787 billion for infrastructure (and other) projects, according to the government’s Recovery.gov website (http://www.recovery.gov/Pages/default.aspx).
Winning bidders of federal jobs typically enjoy substantive contracts, steady work and assured compensation, making the arduous procurement process worthwhile. So how do you get in on the action? Read on.
Get a feel for it
First, review what contracts have been awarded in your region and the specifics of the winning bids. Sites such as FedSpending.org (http://www.fedspending.org) and USAspending.gov (http://www.usaspending.gov) will help you determine whether federal construction opportunities would be attractive — especially considering the time and effort it takes to prepare a bid.
Different federal agencies buy different services, so the next step is determining which agency is most likely to need your construction company’s work. An SBA Procurement Center representative can be a big help in this regard. Resources are available at your local SBA office or by visiting SBA.gov (http://www.sba.gov).
Although websites provide valuable information about how to work within the system, face-to-face networking is also a good idea. And this is particularly true for contractors who are new to federal work. Attending networking and federal contracting events can generate valuable insights on winning a bid and carrying out a job smoothly.
(For some ideas of where to find networking opportunities, as well as other pertinent information, see the sidebar “3 networking resources for federal contracting.”)
Register early, update often
To formally submit a bid for a federal contract, you’ll first need to register with the Central Contractor Registration (CCR). This is the federal government’s primary registrant database, which you must be in to do business with — and get paid by — the federal government.
The registration process requires a nine-digit Dun & Bradstreet (D-U-N-S) number, which you can obtain at http://fedgov.dnb.com/webform/index.jsp. You’ll also need a five-digit Commercial and Government Entity (CAGE) Code, which is available at https://www.bpn.gov/ccr/default.aspx.
Federal procurement laws mandate that contractors renew and update their CCR profiles at least once annually. You also must complete an Online Representations and Certifications Application (ORCA) at https://orca.bpn.gov.
The ORCA system centralizes the storage and collection of contractors’ representations and certifications in an online system, eliminating the need for the paper copies that were once submitted with each bid. You’re also required to update your ORCA every year.
Once you’ve completed the required registrations, you can start looking for projects to bid on. Discover what Invitations for Bids (IFBs) are available through sources such as https://www.fbo.gov. The U.S. General Services Administration (http://www.gsa.gov) publishes notifications of the largest federal contracts as well. Keep in mind that, when a federal agency issues an IFB, it’s seeking a clearly defined service at the best possible price.
Be responsible
Federal contracts can be awarded only to “responsible” bidders. To be considered responsible, you must meet various criteria, such as having:
- Adequate financial resources to perform the contract,
- A satisfactory performance record (though a lack of relevant experience won’t automatically disqualify you),
- An acceptable record of business ethics,
- Appropriate operational controls in place, and
- The necessary equipment to complete the job (or the capacity to access it).
Be sure you have proper bonding lines in place as well. Some agencies even require audited financial statements, which typically allow more contract work to be awarded than if you provide only reviewed financial statements.
When a contract is awarded, the lowest bidder typically wins. But be careful: If your company comes in as the low bidder and is then found “nonresponsible,” it could harm your reputation — both in the public and private sectors.
Construction businesses with special certifications may have a better chance, because a certain percentage of federal contracts must go to such companies. Examples include businesses owned by women or veterans, located in Historically Underutilized Business (HUB) zones or certified in the SBA’s 8(a) program. Of course, simply qualifying under one of these categories doesn’t automatically mean you’ll win a bid.
Take a look
Make no mistake, bidding and executing a federal contract will call for some hard work. But with the construction environment remaining ultracompetitive in many regions, few contractors can afford not to take a look at the opportunities Uncle Sam is offering up.
3 networking resources for federal contracting
Do you want to log some valuable networking time with other contractors who have experienced the joys and travails of government contracting? A variety of organizations can hook you up with contacts and other information to make it more likely that you’ll succeed in the public sector. Three examples are:
- Business Matchmaking Online Network (BMM; http://www.businessmatchmaking.com). From procurement workshops to online training, BMM has generated more than 75,000 seller-buyer meetings, which have resulted in billions of dollars’ worth of contracts. And many of these jobs have fallen within the government realm.
- The Association of Procurement Technical Assistance Centers (http://www.aptac-us.org/new). This nonprofit can provide technical assistance in submitting your Invitation for Bid. (See main article.) It can also put you in touch with other construction business owners who are working through the process. You might develop relationships that can help you win future bids.
- Give Me 5 (http://www.giveme5.com). Sponsored by Women Impacting Public Policy and American Express OPEN, this partnership program serves women business owners. Its intent is to teach participants how to apply for and secure federal procurement opportunities.
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