Government Contracting: An Overview


According to the State of Delaware, Office of Minority & Woman-owned Business Enterprises (MWBE) website, there were 308,745,538 people in the U.S.A. according to the 2010 census. The Bureau of Labor & Statistics indicates that for 2011, there are more than 213 million people who are in the Civilian Non-Institutional Labor Pool (with another 27.3 million having some portion of disability). With the current national unemployment rate sitting around 8.1 percent (14.3 percent with disabilities), that means if everyone could theoretically work, there might be as many as 65.5 million (plus 21.3 million disabled) people who have extra time on their hands between job searches, and could potentially offer their products/services for sale to the government. Of course realistically, the actual number of working-age people who are unemployed is much smaller; however, you get my point.

In the current economic times almost everyone is finding themselves with less money to spend on family essentials, and vast numbers of people are finding themselves out of work. No one likes to hear their boss tell them their positions have become 'redundant' and their employment opportunities have dried up. It is in times such as these that everyone needs to become clever entrepreneurs to some extent. You have to seize the unique and new opportunities that bring you what you need, when a more stable salary becomes out of reach or at-risk. You need to reinvent yourself, and set yourselves up in small or second businesses so that you can generate enough income/revenues to get by until the economy improves. Then, as each day comes and goes, you might find that this new business model of augmenting your income is something that you really enjoy. If you are tired of the government taking more and more of your hard-earned money in the form of taxes, then you need to discover ways to use your subject matter expertise to get money back from the government.

The US Trade Development Agency (USTDA) sums up the benefits to government brought by Small Businesses (quoted from USTDA website): "Small businesses are the foundation of the U.S. economy. Over the last decade, the estimated 25.8 million small firms in the United States generated 50 percent of private, nonfarm gross domestic product (GDP), created 60 to 80 percent of net new jobs annually, and employed 50 percent of the country's private sector workforce. According to the U.S. Small Business Administration (SBA), small businesses represent approximately 97 percent of all U.S. exporters, and despite the recent economic slow-down, U.S. exports of goods and services jumped 12.2 percent last year. Hence, small businesses are at the forefront of the U.S. economy and play a critical role in the global marketplace."

The U.S. government purchases billions of dollars in products and services from thousands of companies and individuals every year. These products come in an almost endless range and scope, from 'no-tech' supplies such as bread and dairy products for military commissaries to 'lower-tech' services such as housekeeping & janitorial services at government offices; 'medium-tech' such as Information Technology products with hardware/software and IT services for training programs, or even construction management and civil/environmental engineering, all the way up to 'high-tech' offerings such as cyber-security & missile defense systems. Do you bake pastries or grow potatoes? Do small engine or automobile repairs? Did you just depart military service (or planning to do so), and have special technical skills you learned while serving the country? Do you perform accounting or tax services at a booth in Walmart during your spare time? All of these are desperately needed by the U.S. Government.

Remember, not only Americans can create companies in the USA. For example, there is no restriction or requirement that demands a Delaware business entity must be owned by either a U.S. Citizen or a USA resident; Delaware allows incorporation of out-of-staters and foreigners also. You would most likely need a Registered Agent (e.g. Delaware Corporate Agents-DelCorp) to act for the out-of-state or foreign-owned company, just as for domestically-owned entities. However, there may be federal limits on foreign ownership of U.S. flagged vessels and registered aircraft, but that is a separate topic.

If you have a product or service that you want to sell, or if you have Subject Matter Expertise (SME) in any field or industry, the U.S. government needs you. They just don't know you can offer it as yet. Before you can offer your services to the Government, you must be registered in the Central Contractors Registry (CCR); before you get CCR Registered, you must have a corporation.

You may be asking yourself "Can I really make money at this?" I am not the sharpest pencil in the well; I am here to tell you that it is possible. One of my first government contracts was for the purchase of a tiny item of Air Traffic Control equipment for a control tower from 8,000 miles away (I was in Japan at the time). After reading the specifications for the product in a Public Announcement, I then spent 20 minutes on the Internet researching who made this type of equipment ( two companies in the USA, one in the UK and one in Canada). I sent an e-mail to each of the companies asking if I could re-sell their equipment for this single project (not become an agent for them), and asked them to provide me an all-inclusive quotation, including shipping. I told the manufacturers that they would get paid when I got paid. I then rewrote their quotation to reflect my company info, included my resume as key personnel, and submitted the proposal by e-mail attachment to the government. I won the contract, and  four weeks later I received a payment from the Government for cost of the item…plus $2500 for my profit.

I did not know the manufacturer, I never met the government contracting officer, I did not have to worry about export/import of foreign products (I pushed that duty to the Manufacturer who drop-shipped the item via FedEx), and I did not ever have to appear on-site. I realized – WOW, I just paid for my family's food for a whole year and did not have to get up from my home-office chair. I saw that if I could do this five more times in a year, I could pay for my whole apartment for the year. That is when I realized that government contracting was a way to augment my income.

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