WARNING: Aspiring Small Business Federal Contractors Beware

“Government contracting is not for everyone”

A small business should not consider federal contracting if it is looking for the government to save it financially. Contracting can be a long, complex, expensive proposition that can cause a financially struggling concern to go under. Some of the questions that small businesses should consider when contemplating contracting with the government are:

  1. Do you have the financial resources?
  2. Are you stable?
  3. Are you financially healthy?
  4. Can you make payroll and other payments while performing a contract?
  5. Are you committed to investing and applying the resources needed to market to the government?

The point to these questions is that contracting with the government can be very lucrative, but it can also be a significant drain on both resources and finances. The government does not make payments up front, except in extremely rare circumstances, so a business must be able to maintain its day-to-day operations during contract performance. Therefore, government contracting is not for everyone.

In addition to size considerations, a firm must be willing to work within the bureaucratic process and have the patience to deal with the nuances of federal contracting. It must have the necessary technology in place as well as a documented quality control plan.

So, as long as you have answered the above questions honestly and your preparation is in order, go for it – eyes wide open. But, surround yourself with folks who know more than you.

– Rudy

One Voice…


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