Procurement and Public Contracting

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The U.S. government is the world’s largest buyer of products and services. Purchases by military and civilian installations amount to nearly $400 billion a year, and include everything from space vehicles to janitorial services. In short, the government buys just about every category of commodity and service available. By law, federal agencies are required to establish small business contracting goals. The current, government‐wide procurement goal is that at least 23% of all government buys should be awarded to small businesses.

In addition, Federal contract goals are established for women‐owned businesses, small disadvantaged businesses, firms located in HUBZones and service disabled veteran‐owned businesses. These government‐wide goals, which are not always achieved, are 5%, 5%, 3% and 3%, respectively. They are important because Federal agencies have a statutory obligation to reach‐out and consider small businesses for procurement opportunities. However, these are only goals. It is up to you to market and match your business products and services to the buying needs of specific government agencies.

How does public contracting work?

The government applies standardized procedures to purchase the goods and services it needs. The primary contracting methods used by the government are: Micro‐purchases; Simplified Procedures; Sealed Bidding; Contract Negotiations; and, Consolidated Purchasing.

Sealed bidding is how the government buys competitively when its requirements are very specific, clear and complete. An IFB or “Invitation For Bid” is the method used for the sealed bid process. Typically, an IFB includes a description of the product or service to be acquired, instructions for preparing a bid, the conditions for purchase, delivery, payment and other requirements associated with the bid, including a deadline for bid submissions. Each sealed bid is opened in a public setting by a government contracting officer, at the time designated in the invitation. All bids are read aloud and recorded. A contract is then awarded by the agency to the lowest bidder who is determined to be fully responsive to the needs of the government. Government‐wide IFBs are available daily for review in the government’s online listing service, Federal Business Opportunities. This electronic service, which is discussed in detail later, also provides direct links to available IFB invitations

In certain cases, when the value of a government contract exceeds $100,000 and necessitates a highly technical product or service, the government issues a Request for Proposals. In a typical RFP, the government will request a product or service it needs, and solicit proposals from prospective contractors on how they intend to carry out that request, and at what price. Proposals in response to an RFP can be subject to negotiation after they have been submitted.

If you want to participate in the Federal procurement arena, you have to know the rules. 

LIST Ventures has extensive experience in public proposals to a variety of entities, including the Federal, State, and local government agencies. We assist throughout the entirety of the process, from the release of IFB/RFP to submission and contract execution.

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