10 Myths of Government Contracting: Part 1

10 Myths of Government Contracting: Part 1

Government Contracting, or stated more simply “selling to the government” at any level; Federal, State and Local, is enough to make many business owners cringe at the thought.  “Too much red tape, good ole boy’s club” are some common thoughts, but all in all it is many times thought of as being a market that is just not worth the perceived headache.

While selling to the government, just like any business endeavor, may not be for everyone, it is certainly a market to consider if you want to diversify your revenue stream.  To assist in the initial consideration of the market, we would like to take a stab at some of the myths surrounding working with the government. Some are promoting working with the government, some provide a more “realistic view” and some are taken straight from the government’s mouth…but all will provide an honest perspective that will help you make informed decisions about working with these customers.

For more insights on government contracting, be sure to register for the upcoming free business webinar on February 25th: Selling To The Government: Is It Right For You?

Here are 5 of the top 10 myths of Government Contracting: 

MYTH #1- The Government does not pay, or it takes forever to get paid.
Notwithstanding media coverage on some states and organizations that have not paid their “bills”, when we discuss Federal contracting specifically, upon receipt of a correct invoice, payment is made within 30 days, and in some cases 15 days.  Pretty good huh?

MYTH #2- “No one will talk to me, or I can’t even talk to anyone in the Government, etc.”
The Federal Government did their own version of mythbusters and this is one of their points.  In reality, government officials can and should have one on one discussions with companies, as long as no company received preferential treatment.  Early exchanges of information with industry are encouraged.  On a smaller scale, the state of Iowa procurement officials also encourage direct communication with industry.

MYTH #3- Talking to Government officials/marketing doesn’t really matter nor have any value.
At both a Federal and State level, Government agencies count on companies marketing their goods/services to assist with their own market research and to know what is available in industry.  This interaction also helps with identification of small businesses, as well as provides more companies an opportunity to receive Requests to Quote that may not be publicly advertised.  If they don’t know you, they will go to someone they do know!

MYTH #4-  Getting “registered” is enough, or being in the Government’s “database” is all I have to do.
Unfortunately, there is no one stop shop for all things government contracting, including a universal registration or computer system that magically ensures that you will always know about every opportunity to bid.  You will have some required registrations, but this is where being educated on the process is necessary, to ensure that you are registered and looking in the “right place”.

MYTH #5- Government sales is “easy money”.
There is a lot of competition for government projects and sales, and while there is a great potential for success if you put in the initial time investment, this is not the market to enter if you are looking for a quick way to increase sales.  While there are exceptions, there have been articles/studies that say that on average it takes a company 18 months to secure their first contract.  It is a marathon, not a sprint, but with realistic expectations you will see the ROI.

Stay tuned for 10 Myths of Government Contracting: Part 2, next week!


Beth White, Government Contract Specialist, Iowa State University, CIRAS

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