The contracts awarded to Women-owned businesses was approx. $25 billion of total federal contract spending last year – but that figure accounts for less than 5% of total contracts awarded, according to data provided by American Express. The first step for women interested in winning this business is to expand their view of what goods and services the federal government might need. A recent research revealed that 15% of women-owned businesses in the U.S. are health care or social assistance oriented, and that 13% are in the professional, scientific and technical services category. This includes business types such as law or accounting offices, or even public relations. Those services are perfect matches for what the federal government buys. For example, many types of government offices – from Veterans Administration to Social Security facilities – are in need of day care centers.
There are two primary ways to benefit from government contracts, one is becoming a prime contractor. That means the government buys directly from you and pays you directly. That’s a big challenge, because there are legal responsibilities, there are reporting responsibilities.
A less burdensome approach is to become a subcontractor. An easier way to enter the marketplace is often as a subcontractor, where you are essentially working with another company who has the prime contract and then they subcontract with the women-owned firm to provide the services or products that they offer.
The federal government contracting market is one based on relationship-building. Buyers want to know who you are. They want to trust that you can do what you say you can do. For women, that comes naturally in building strong, trusted relationships. Also, business owners need to be sure to educate themselves before going after contracts. Educating oneself about the financial demands of being a government contractor is an important step to take. Identifying our limitations, targeting doable businesses, building trust of contractors always helps to grow the business.
Author: Prasanna Patil