What You Should Know About Doing Business with the Government
Table of Contents
If there’s one institution that’s always going to have a place, it’s the federal government. A government contract can be one of the most important business deals you ever take part in. Should this opportunity arise, there are a few things you need to understand. Here are some of the most important concepts to grasp when you are doing business with the government.
It Can Be Lucrative
There’s more to making a deal than just profits, but you can certainly see it as one of several advantages. Depending on the terms of your deal, you could end up with earnings like never before. The tradeoff is that in order to enjoy the lucrativeness of a government contract, you also need to accept the workload. Chances are that you’ll be working harder and longer hours as you work to fulfill the government’s needs. If you have doubts about whether or not you can do this, then government contracts might not be the right fit for you.
How You Handle Information May Change
Government agencies need their information to be classified. By giving you a contract, they’re trusting you and everyone on your team to not let anything fall into the wrong hands. Security is a top concern, so make sure nothing is left to chance. Even handling unclassified information is heavily regulated (under NIST 800-171 specifically), so how you and your employees handle data will likely have to change. Before you agree to a government contract, you should get a good sense of what kinds of security modifications you’ll have to make. Once you know the new and adjusted protocols, train your staff on them. It should be clear that any kind of violation, through willful action or negligence, is unacceptable and grounds for termination. The future of your contract rests on how well you’re able to live up to it.
You Need to Follow the Contract
All contracts need to be reviewed carefully and followed by the letter. With a government contract, you shouldn’t have to be reminded to understand its terms. There are likely dozens of other businesses that could’ve received a lucrative contract, but the government ended up going to you. Show government officials that they made the right choice by honoring the contract and upholding full transparency with them.
The government doesn’t just hand out contracts to everyone who asks for one. You and your business have to show that you’re going to follow the guidelines of the contract. This can seem quite the undertaking, but getting your business started was surely hectic as well. Show that you deserve your contract, and see just how much it helps your company.
Understanding the Procurement Process
One of the most important things to know when doing business with the government is the procurement process. The government procurement process is complex and can involve multiple steps, such as identifying a need, developing a solicitation, evaluating proposals, negotiating contracts, and administering contracts. It’s essential to familiarize yourself with the procurement process and the requirements for bidding on government contracts. This will help you to navigate the process successfully and avoid common mistakes that could cost you the contract.
Compliance is Key
When doing business with the government, compliance is critical. Government contracts are subject to various regulations, including those related to ethics, labor laws, environmental protection, and security. Failure to comply with these regulations can result in severe consequences, such as fines, penalties, or termination of the contract. It’s crucial to stay up-to-date with the regulations and ensure that your business is in compliance.
Expect a Long Sales Cycle
The government procurement process can take longer than the typical sales cycle in the private sector. It’s not uncommon for the procurement process to take several months or even years. It’s essential to be patient and persistent during this time. Stay in touch with the government agency, and be responsive to any requests or inquiries they may have. Additionally, be prepared to provide detailed documentation and respond to requests for additional information.
Be Prepared for Audits
Government contracts are subject to audits to ensure compliance with regulations and contract terms. These audits can be conducted by a government agency or by an independent auditor. It’s essential to keep accurate and detailed records of all activities related to the contract, including financial transactions, labor hours, and materials used. Be prepared to provide these records during audits and cooperate fully with auditors.
Doing Business With The Government
In conclusion, doing business with the government can be lucrative, but it’s important to understand the unique challenges and requirements involved. By familiarizing yourself with the procurement process, complying with regulations, being patient, and being prepared for audits, you can successfully navigate the world of government contracting and grow your business.
For more insightful articles and actionable tips about finance and business, check out Capital for Business’ The Working Capital and Financing Blog.
If you’re looking for funding, we can help. Check out our funding solutions!
Recommended For You