Did you know that federal procurements under $25,000 don’t 
undergo the normal bidding process? That means that if you’re a 
small business selling products or services, landing a federal 
contract may be easier than you think. 

The federal government is the ideal resource for small businesses 
and independent contractors to tap for projects. Here’s why: The 
federal government...

 · Assigns billions of dollars in contracts annually.
 · Often gives preference to smaller contractors and consultants
 · Is mandated to target smaller firms for contracts less than 
   $100,000
 · Has a huge budget and is frequently a repeat customer
 · Will never go out of business


Locating Smaller Contracts

“Smaller” contracts under $25,000 represent special opportunities
for small businesses and independent professionals. However, 
contracts at this level aren’t publicly advertised, so you have 
to know where to look to find them. 

You can locate smaller contracts through a “hidden market,” 
where business deals are driven by relationships with federal 
buyers. Incidentally, federal agencies generally purchase 
products and services from small businesses in their local 
market. Establishing relationships with these agencies can 
be a smart move for small businesses because it: 

 · Can reveal unadvertised contracts
 · Is less competitive 
 · Results in prompt payment
 · Offers the potential for ongoing and repeat business 


How the Government Awards Smaller Contracts

The federal government procurement system for contracts under 
$25,000 isn’t overly extensive or competitive. The government 
generally makes hiring decisions for smaller contracts through 
micro purchases or simplified acquisitions. Both of these 
methods are relatively streamlined, compared to the more formal 
process of requests for proposals, quotes and invitations.      


Micro Purchase Market

The micro purchase market enables federal managers in the field 
to buy goods and services under $2,500 quickly and easily. 
Managers normally make these purchases with a government credit 
card, although a purchase order can also be used. Government 
credit cards—GSA SmartPay cards—are widely used and are the 
government preferred method of payment. 

Accepting credit card payments offers government contractors a 
variety of benefits. It eliminates the use of purchase orders, 
which means fewer forms to complete. It speeds up payment 
processing and reduces billing, collection and other 
administrative costs. But more importantly, accepting GSA 
SmartPay, allows companies to remain competitive and become 
strategic suppliers to government purchasing card users.

Using credit processing to capitalize on the micro purchasing 
system is easy. You simply set up a merchant account that 
allows you to accept credit cards. Then conduct business with 
your local federal agencies the same as you would with your 
commercial customers. 

The micro market offers contractors the benefit of receiving 
same-day purchasing decisions from government agencies. It also 
allows you to avoid spending hours putting together bid packages 
and waiting weeks for responses. Plus, the system makes it easy 
to receive repeat business from government organizations that 
are satisfied with your work. 


Simplified Acquisitions

Simplified acquisitions are more involved than micro purchasing; 
yet, they’re more straightforward than formal bidding processes. 
With simplified acquisitions, managers solicit three to four 
informal quotes by telephone, email, fax or mail. These direct 
and unadvertised contracts can range from $2,500 to $100,000 
in value. Contracts between $25,000 and $100,000 are publicly 
advertised. 

As with micro purchasing, contractors can receive quick 
responses through the simplified acquisitions process. Decisions 
for project awards are delivered within one to several days, 
instead of weeks.

Before you set out to win government contracts, be sure to 
define your contracting niche—whether it’s the micro purchase or 
simplified acquisitions market. This will help you effectively 
focus your marketing efforts for the best possible results. Good 
luck! 

Robert Moment is a successful business coach, consultant and 
author of “It Only Takes a Moment  to Score”, which is currently 
available at Amazon.com and Barnes and Noble. His company 
(http://www.winfederalcontracts.com), has been winning federal 
government contacts for 17 years and offers powerful insight to 
help other businesses do the same.