As a business owner, you might have thought of doing business with the government. Although most government sales are burdensome and complex, they can still be an excellent way of boosting your revenue and expanding your business reach. That’s because the government purchases almost all types of goods and services regularly to support their operations.
However, like other commercial transactions, doing business with the government comes with several considerations. The processes and procedures involved can be cumbersome since they vary at federal, state, and local levels. Leveraging procure-to-pay software can simplify these complex procurement workflows, ensuring compliance and efficiency in government contracts.
But to help you get started, below are the four things to consider when doing business with the government:
1. Ability To Secure Sensitive Government Data
You might wonder why your business’s ability to secure sensitive data is one of the considerations when doing business with some government agencies. Typically, the government of a particular country depends on private companies and corporations to supply its needs. However, in transacting with these private entities, some government information and data will have to be disclosed or transmitted to complete the transaction. For this reason, many government agencies require businesses who want to contract with them to be capable of addressing cybersecurity and information security threats.
For example, suppose you’re doing business with the Department of Defense (DoD). In that case, you might need to work with cybersecurity and information security experts who understand the threats and how to prevent them. They can provide security solutions for your organization using their knowledge and expertise. This is especially true when dealing with business-to-government (B2G) contracts.
2. Registration Requirements As A Government Supplier
One of the considerations to take when you do business with the government is the requirements to become a government supplier. This is especially true if you want to transact with the federal government.
For example, before obtaining business contracts at a federal level, you might need to get your North American Industry Classification System (NAIC) code and the Federal Supply Classification (FSC) code. These codes are used to identify your products or services in the federal government listings and procurements. Moreover, you might be required to secure a Data Universal Numbering System (DUNS) number used like your Social Security Number. Lastly, you should also register in the System for Award Management (SAM) if you want to be awarded contracts from federal military or civilian agencies.
On the other hand, when it comes to the state and local levels, the requirements for doing business with them may vary depending on the type of opportunities. For instance, you need to register your business in a no-cost statewide bid system if you enter into agency and master contracts with the state government.
As you can see, there can be many requirements before you can successfully enter into a business agreement with the government. Hence, it’s essential to familiarize yourself with the federal, state, or local requirements to ensure seamless transactions.
3. Funding
Another critical thing to consider when entering into a business contract with the government is funding. Before you can become a certified government supplier, you might need to have appropriate capital or funds to ensure your ability to deliver the goods or services to the government. You can’t do business with some government entities without adequate funding to cover your operational costs and other related expenses.
For example, when dealing with the government at a state level, you might need a considerable amount of money to cover agency or mastery contracts. The sales price for agency contracts ranges from USD$30,000-40,000, and the mastery contracts up to millions of dollars.
With these things in mind, it’s important to have adequate financial resources when closing business deals with the government. Doing so can help increase your opportunities to do business with certain government entities. In turn, you can also improve your organization’s branding efforts necessary for its long-term growth and success.
4. Types Of Procurement Opportunities
When entering into B2G contracts, you might also need to consider the type of procurement opportunities you can take with the government. Depending on the type and nature of business, capital, products or services offered, and other essential factors, it’s crucial to choose the opportunities that’ll bring growth to your business.
However, many procurement opportunities under the government vary at the federal, state, and local levels. For example, if the federal government agencies require small-dollar purchases, they can purchase directly without competition. At the state level, the opportunities can include direct buy, agency contracts, and master contracts. If your business wants an agency or master contract, you’ll have to undergo the bidding process initiated by the government agency involved.
Lastly, at the local government level, the opportunities available to you can include purchases and projects related to public works, professional architecture and engineering, purchased services, and many more.
As you can see, there are many types of opportunities to choose from when doing business with the government. But if you want to get the most out of your B2G contracts, it’s best to consider the opportunities to venture in. Make sure to take one that’s beneficial to the success of your organization.
Bottom Line
If you decide to pursue government sales, you need to be prepared for the processes and procedures involved. Unlike dealing with private entities, you should be extra cautious when working with certain government agencies since they’re impressed with the public interest. By keeping the things mentioned above in mind, you’ll know what to expect and consider when entering into B2G contracts with the federal, state, or local government.
