You don't have to bid on a contract to do business with federal, state or local governments. Government employees can make small purchases -- a few hundred or a few thousand dollars, depending on the situation -- without putting them out to bid. For bigger purchases, bids are the norm. It's a competitive process, and just being the lowest bidder may not be enough. Each government sets its own rules for bidding, though the general outline of the process is the same.
Laying the Groundwork
Qualifying as a federal contractor takes a lot of paperwork. You need to have everything submitted before you respond to an invitation to bid. The requirements include applying for a DUNS -- data universal numbering system -- number, and classifying your business under the federal coding system, to identify which industry you work in. If you're bidding on a state or local contract, you'll have to ask that government about its requirements.
Get in a Database
When you bid on a federal contract, the procurement officer will want to look you up in the System for Award Management. Submit a profile to SAM before you start seeking any federal work. SAM shows your experience, your location and whether you qualify as a small business, or gain preference for being woman, minority or veteran-owned.
Know the Process
The invitation to bid is the kick-off of the bidding process. Each invitation describes the project, the technical specifications, the deadline for completion and the deadline for bidding. Different governments and agencies may handle things slightly differently, but the sealed-bid approach is common. The sealed bids are all opened together, after the deadline, so late bidders don't get any advantage over early birds.
Submit a Bid
Delivering a winning bid doesn't necessarily require making the cheapest bid. If it's an IT security project, for example, your experience with similar projects may count more than the dollar figure. Your bid has to be responsive: if the state government says it wants a particular type of firewall, proposing anything else won't get you the job, regardless of price. (personal experience again). If none of the bids pass muster, the government can rebid. If you're one of two or three good bidders, the government may ask you in for a presentation.
If you've never bid before, you're better off starting on small projects rather than major ones, to establish yourself. Subcontracting for a piece of the pie is another way to gain credibility: Find an established big-league bidder and offer to take on part of the work. Another approach is to partner with another small business with more experience.
Building connections can help build a government contracting career. If government officials know and trust you, that may put you over the top in a tight bidding competition. If you know liaisons for specific agencies or departments can put in a good word for you. Networking to connect with other bidders can make it easier to land a subcontracting or partnered relationship.