How to bid on government contracts

Register so you can bid

Federal contractors register in the System for Award Management at SAM.gov, which is free and requires a Unique Entity ID. Registration can take time, so start early.

You will need your legal business name and address, EIN, bank details and NAICS codes that describe your work. Keep your information exactly consistent with IRS and bank records, since mismatches slow approval. Registration must be renewed each year.

State and local governments run their own vendor lists, often on separate portals. Check your state's procurement website and your city or county purchasing office. Our guide on getting a business license covers the permits that many bids require.

Look at the registration as an investment in credibility. Contracting officers can see your profile, so describe what you do in plain terms and keep contact details current. A blank or confusing profile loses to a clear one.

Find opportunities that fit your size

Search SAM.gov for contract opportunities by NAICS code, location and set-aside type. Start with smaller contracts where you can show you can deliver.

The federal government sets aside some contracts for small businesses and certain groups, such as women-owned, veteran-owned or HUBZone businesses, through SBA programs. Eligibility rules are set by the SBA, so check SBA.gov for current requirements. Our post on how the SBA defines a small business explains the size standards.

Look at past awards for similar work. They show who wins, at what price and how large the contracts are. Local agencies often buy under simplified procedures with lower dollar thresholds, which can be a good first step.

Read the solicitation closely

The solicitation tells you exactly what the agency wants, how it will score bids and when they are due. Missing a required item can disqualify an otherwise strong bid.

Make a checklist of every requirement: forms, certifications, insurance, past performance references, pricing format and page limits. Note the deadline and the submission method. Mark questions and submit them before the question deadline.

• Scope of work and delivery dates
• Evaluation criteria and weights
• Required representations and certifications
• Insurance and bonding requirements
• Place of performance and any wage rules

Attend any pre-bid meeting or site walk, since they are often where agencies clarify scope and where you learn who else is interested. Teaming up with a larger prime contractor as a subcontractor is another common way for small firms to win a first contract.

Price and write the bid

Price your bid to cover direct costs, overhead and a fair profit. Write a response that answers each requirement in the order the agency lists them.

Use real numbers: labor hours with loaded wages, materials, travel, insurance, subcontractor quotes and your overhead share. A bid priced too low can lead to losses, especially with fixed-price contracts. A bid priced far above competitors rarely wins unless the evaluation favors quality over price.

Write plainly. Show you understand the need, describe your approach, name the people who will do the work and give relevant past performance. Our guide on contract negotiation helps with terms after award.

Before submitting, have someone who did not write the bid check it against your checklist. Simple errors, such as a missing signature, a late upload or an unanswered question, are among the most common reasons bids are rejected. Submit early, not at the deadline.

Plan for slow payment and upfront costs

Government agencies often pay on net terms after you invoice and they accept the work, so you may carry costs for weeks. Build the payment delay into your cash plan.

Payment timing depends on the agency, the contract and your invoicing accuracy. Federal rules include prompt payment standards, but you still fund labor, materials and subcontractors before you receive money. Prepare a cash forecast that shows the low point before the first payment arrives. See our guide to cash flow forecasting for the method.

Some contracts require bid, performance or payment bonds, which come from surety companies and are separate from loans. ROI Funder does not place surety bonds, so ask your insurance agent about them.

Also track modifications. Agencies amend solicitations, and each amendment may need an acknowledgment. After award, keep clean records of hours, materials and delivery proof, since agencies review invoices closely and mistakes delay payment.

Bridge the gap with funding that matches the timing

A business line of credit or working capital can cover payroll and materials while you wait for payment. Borrow only for the gap and confirm the cost against your contract margin.

Example (illustrative): you win a $120,000 contract with 60 days between starting work and getting paid. You need about $50,000 for labor and materials upfront. A business line of credit or working capital could cover it, and you repay when the agency pays. If the funding costs $3,000 and the contract margin is $20,000, the math can work.

ROI Funder does not place invoice factoring or accounts receivable financing. We match files with 500+ FICO, 6+ months in business and $20,000+ in monthly revenue to the funders in our network, with true cost and payback shown before you sign. Applying is a soft pull and carries no obligation.