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5 Surprising Truths about Government Procurement

October 31, 2011

Business all over the 50 states of America must understand one thing about government procurement: the business opportunities are endless! In these financially strained times, businesses must defy conventions and think out of the box in order to keep going. One wise economic move is to explore a business partnership with the federal government.

Federal government procurement need not be an intimidating opportunity for businesses. These five (5) surprising truths will help convince the business owner that the government is a great customer:

  1. Federal spending for goods and services is pegged at $300 billion per year. This incredibly huge amount is spent on virtually every need and every service acquired through federal procurement. Businesses big and small could surely benefit from such a vigorous cash flow.
  1. Most government procurement contracts are awarded to small-sized and medium-sized businesses.  A big percentage of federal contracts are valued between $2,500-100,000. This means that small companies, with a manpower pool of less than 500 people, are the usual providers of goods and services for the government. This amazing fact should erase the misconception that only mammoth companies could land government contracts.
  1. The United States government is the largest purchaser of goods and services in the country. The size and volume of purchases made by the government is quite huge, that it easily topples all other consumer or purchaser entities. With the increased needs of federal and state agencies, as well as the privatization of some sectors, there is a great demand for contractors and businesses to transact with the government.
  1. Small government procurement contracts do not require voluminous paperwork. While it’s true that the government has a prescribed and strict guideline in rewarding contracts, small value procurements are an exception. Huge, pricey contracts do require some paperwork, but when it comes to small business contracts, the requirements change. The whole contract could even entail only a two-step process!
  1. The government is a good payer. There’s this erroneous perception that government entities are bad payers. According to public perception, it takes forever for government to pay its contractors. The public could never be more wrong. Government entities are required to pay contracted individuals and companies within thirty (30) days, and if they fail to do, contractors are entitled to collect the corresponding interest.

These five surprising truths about government procurement are big enough reasons to encourage both small-sized and medium-sized businesses to establish a business partnership with the government. It really is a win-win opportunity that no entrepreneur or business owner must ever forego.

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