Successfully Bid on Government Contracts: What Contractors Need to Know

Bidding on government contracts requires meticulous preparation, a deep understanding of the procurement process, and the ability to navigate the complexities of government requirements. Contractors must be patient, resourceful, and ready to adapt to the evolving landscape of government needs and regulations. With the right approach, government contracts can offer substantial opportunities for business growth and expansion. Here is everything government contractors need to know when preparing successful bids.

Research and Preparation

Registration in the U.S. government’s System for Award Management (SAM) is a prerequisite for bidding on federal contracts, so contractors should first ensure this is complete.

Additionally, contractors need to fully understand the market landscape. It’s crucial to understand that the government contracting market is highly competitive and regulated, requiring a thorough understanding of the Federal Acquisition Regulation (FAR). Contractors must conduct comprehensive market research to identify contract opportunities that align with their business’s capabilities and niche. Building strong relationships with government agencies and understanding their specific needs can significantly enhance the chances of submitting a successful bid.

Understanding the impact of policy changes, proposed regulation changes, and administration changes on government contracting is also important. Policy shifts can alter the competitive landscape and bidding strategies. Proposed regulations may introduce new compliance requirements and affect contract costs and profitability. Finally, administrative changes can have significant implications for contract performance and outcomes.

Proposal Process

A clear and well-defined proposal strategy is essential, addressing all requirements outlined in the solicitation documents. Attention to detail is paramount, as is ensuring that all aspects of the bid are compliant with government standards. Non-compliance is an easy way for the government to disqualify offerors and narrow down the competitive pool.

Contractors should be prepared for the time it takes for the government to review submissions, which can range from 30 to 120 days, and sometimes longer. Financial stability is important, as there may be a significant wait before a contract is awarded and to receive initial payment once performance on the contract has begun.

Contract Types

Companies preparing to bid on a government contract should understand the different contract types and requirements that go along with each. The most common contract types are fixed price, cost reimbursement, and time-and-materials. To be awarded a contract that is other than a firm-fixed price contract, the contractor needs an acceptable accounting system. A pre-award survey, a pre-award audit, or a post award audit may be required.

Flexibly priced contracts such as cost reimbursable contracts typically require an incurred cost proposal (ICP) to be submitted. It is crucial to understand that incurred cost proposals must be submitted within six months of the contractor’s fiscal year end. Contractors must maintain meticulous records to demonstrate the allowability and allocability of costs, as mandated by FAR. Utilizing the Incurred Cost Electronically (ICE) Model can streamline the submission process, ensuring all required schedules are included and aiding in audit support.

Contractors should also be mindful of the set-asides for small businesses, which constitute nearly a quarter of all government contracts. Set-asides were created by the Small Business Administration (SBA) to provide opportunities for smaller entities to compete in the government marketplace.


Bidding on government contracts is a complex process that requires a comprehensive understanding of the market, meticulous preparation, and the ability to adapt to changing regulations and policies. Contractors must be mindful of the requirements and challenges and be prepared to meet them head-on to ensure their bids are successful.

Contact Us

For more information on this topic, please contact a member of Withum’s Government Contractors Services Team.