How to Bid on Government Contracts: Complete Step-by-Step Guide

Introduction

Government contracts represent one of the most stable and lucrative markets for contractors of all sizes. Federal, state, and local governments collectively spend trillions of dollars annually on goods and services—and a significant portion goes to construction and related trades.

For many contractors, breaking into government work can seem daunting. The registration requirements, complex solicitation documents, and formal bidding processes differ significantly from private sector work. But with the right approach, government contracting offers reliable payment, steady work, and opportunities to grow your business.

This comprehensive guide walks you through every step of the government bidding process—from initial registration to submitting winning proposals and everything in between.

Government Contracting at a Glance

$700+ billion: Annual federal contract spending
$2+ trillion: Combined state and local spending
23%: Federal small business contracting goal
Thousands: New opportunities posted daily
Reliable payment: Government contracts rarely result in non-payment

Understanding Government Contracting

Before diving into the bidding process, it's important to understand how government procurement works and the different types of opportunities available.

Levels of Government Contracting

Level	Examples	Where to Find Bids
Federal	GSA, VA, DoD, Army Corps	SAM.gov
State	DOT, Universities, Corrections	State procurement portals
Local	Cities, Counties, School Districts	Agency websites, portals

Types of Solicitations

Invitation for Bid (IFB)

Used for straightforward purchases where specifications are clear. Awards go to the lowest responsive, responsible bidder. Most common for construction projects.

Request for Proposal (RFP)

Used when the agency wants to evaluate factors beyond price, such as technical approach, past performance, and management capability. Common for complex projects and professional services.

Request for Quotation (RFQ)

Used for simpler purchases, often under simplified acquisition thresholds. Less formal than IFBs or RFPs.

Key Terms to Know

Contracting Officer (CO): Government official with authority to award contracts
NAICS Code: Industry classification that determines which contracts you're eligible for
Set-Aside: Contracts reserved for specific business types (small, veteran, etc.)
Responsive: Bid meets all formal requirements
Responsible: Bidder is capable of performing the contract
Best Value: Award considers factors beyond just price

Getting Registered

Before you can bid on government contracts, you need to complete several registration steps. Here's a complete checklist:

Federal Registration Requirements

Step 1: Obtain a UEI Number

The Unique Entity Identifier (UEI) replaced the DUNS number in 2022. You'll receive a UEI when you register in SAM.gov.

Timeline: Immediate (assigned during SAM.gov registration)

Cost: Free

Step 2: Register in SAM.gov

The System for Award Management (SAM.gov) is required for all federal contracts. Registration includes:

Business information and structure
NAICS codes for your work types
Financial information
Point of contact details
Electronic Funds Transfer (EFT) banking information

Timeline: Allow 2-4 weeks for processing

Cost: Free (beware of third-party scams)

Renewal: Must update annually

Step 3: Obtain CAGE Code

The Commercial and Government Entity (CAGE) code is assigned automatically during SAM.gov registration for U.S. entities.

State and Local Registration

Requirements vary by jurisdiction but typically include:

State vendor registration: Register in the state procurement portal
Contractor license: State-issued license for your trade
Business license: Local business registration
Insurance certificates: General liability, auto, workers comp
Bonding pre-qualification: For larger contracts

Registration Checklist

Federal Contracts

☐ SAM.gov registration complete
☐ UEI number obtained
☐ CAGE code assigned
☐ NAICS codes identified
☐ Small business certifications (if applicable)

State Contracts

☐ State vendor registration
☐ Contractor license current
☐ Prequalification complete (if required)

Local Contracts

☐ Local business license
☐ Agency vendor database registration
☐ Insurance certificates ready
☐ Bonding capacity confirmed

Finding Contract Opportunities

Once registered, you need to actively find opportunities that match your capabilities. Here's where to look:

Federal Opportunities

SAM.gov Contract Opportunities

All federal contract opportunities over $25,000 must be posted on SAM.gov. Use the search function to filter by:

NAICS code
Place of performance (state, city)
Set-aside type
Agency
Posted date range

Set up email alerts for new opportunities matching your criteria.

State Opportunities

Each state maintains its own procurement portal. Common names include:

State Procurement Office / Division of Purchasing
eProcurement Portal
Vendor Self-Service
Bid Express (for DOT work)

Local Opportunities

Local government bids are more fragmented but often less competitive:

City purchasing department websites
County procurement portals
School district bid pages
Special district websites (water, fire, transit)
Regional bid aggregation platforms

Automated Bid Notification

Save Time Finding Opportunities

Manually checking dozens of government websites is time-consuming and inefficient. Bid notification services aggregate opportunities from thousands of sources, automatically matching you with relevant bids.

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Evaluating Opportunities

Not every opportunity is worth pursuing. Evaluate each bid against these criteria before investing time in proposal preparation.

Go/No-Go Decision Framework

Factor	Questions to Ask	Go If...
Capability	Can we do this work?	Yes, with current resources
Capacity	Do we have bandwidth?	Aligns with schedule
Competition	Who else will bid?	Reasonable competitive position
Profitability	Will this be profitable?	Meets margin requirements
Strategic Fit	Does this align with goals?	Builds desired capabilities
Requirements	Can we meet all requirements?	No disqualifying issues

Key Documents to Review

Scope of Work (SOW): Understand exactly what's required
Technical Specifications: Can you meet all requirements?
Evaluation Criteria: How will bids be scored?
Contract Terms: Any unusual or problematic clauses?
Bonding Requirements: Can you obtain required bonds?
Insurance Requirements: Do you have adequate coverage?
Past Performance Requirements: Do you have relevant experience?

Red Flags to Watch For

Unrealistic timeline or budget
Vague or poorly defined scope
Unusual contract terms or liability clauses
Requirements you can't meet without significant investment
Set-asides you don't qualify for
Very short response time (may indicate wired competition)

Preparing Your Bid

Bid preparation is where most opportunities are won or lost. A thorough, compliant, and competitive bid requires careful attention to detail.

Step 1: Read Everything Carefully

Read the entire solicitation document
Review all attachments and appendices
Note all submittal requirements and formats
Identify all deadlines (questions, site visit, bid due)
Check for and acknowledge all addenda

Step 2: Attend Pre-Bid Activities

Pre-Bid Conference

Even if optional, attending pre-bid meetings provides valuable insights:

Clarifications from the agency
Site conditions and challenges
Understanding of agency priorities
Opportunity to ask questions
See who else is competing

Site Visit

Always visit the project site when possible:

Verify site conditions match documents
Identify potential challenges
Assess access and staging areas
Take photos for reference

Step 3: Submit Questions (RFIs)

If anything is unclear, submit written questions before the deadline:

Be specific about what needs clarification
Reference specific document sections
Ask about apparent conflicts or ambiguities
Request information needed for accurate pricing

Step 4: Develop Your Estimate

Estimating Considerations for Government Work

Prevailing wage: Factor in required wage rates (often higher than market)
Compliance costs: Certified payroll, reporting, audits
Bonding costs: Include bond premiums
Insurance: Verify coverage meets requirements
Mobilization: Consider project location and access
Change order process: Government changes can be slow

Step 5: Compile Required Documents

Common bid package components include:

Completed bid form with pricing
Bid bond (typically 5-10% of bid amount)
Non-collusion affidavit
Acknowledgment of addenda
Contractor qualifications/experience
List of subcontractors
Disadvantaged business participation forms
Certificates of insurance
Required licenses and certifications

Submitting Your Bid

Proper submission is critical—a compliant bid can be rejected for procedural errors.

Submission Methods

Method	Requirements	Tips
Electronic (eProcurement)	Upload through portal	Submit early, verify receipt
Physical/Sealed Bid	Deliver to specified location	Allow delivery buffer time
Email	Send to designated address	Confirm receipt, check size limits

Final Submission Checklist

☐ All required forms completed
☐ All forms properly signed (original signatures if required)
☐ Bid bond included in correct form and amount
☐ All addenda acknowledged
☐ No alterations, conditions, or caveats
☐ Pricing on all line items (no blanks)
☐ Math verified for accuracy
☐ Correct number of copies (if physical)
☐ Proper envelope/package labeling
☐ Submitted before deadline

Critical: Have two people independently verify the bid package before submission.

Common Submission Errors

Missing signatures or notarization
Failure to acknowledge addenda
Incomplete bid form (missing line items)
Math errors in extensions or totals
Late submission (even by minutes)
Missing required documents
Bid bond deficiencies
Conditional or qualified bids

After Submission

The bidding process doesn't end with submission. Here's what happens next and how to respond.

Bid Opening

For sealed bid (IFB) procurements, bids are opened publicly:

Attend the bid opening when possible
Record all competitor pricing
Note any apparent bid irregularities
Request a copy of the bid tabulation

Evaluation Period

After opening, the agency evaluates bids:

Review for responsiveness (did you follow all rules?)
Evaluate responsibility (can you perform?)
For RFPs, evaluate against stated criteria
Check references and past performance
May request clarifications

Responding to Requests

If the Agency Requests Clarifications

Respond promptly and completely
Do not materially change your bid
Clarifications should explain, not modify
Keep copies of all communications

Award Notification

You'll be notified whether you won or didn't:

If you win: Complete required documents for contract execution
If you don't win: Request a debrief to learn why

Protesting a Decision

If you believe the award was improper, most jurisdictions allow protests:

Strict deadlines apply (often 5-10 business days)
Must have valid grounds (not just disappointment)
Follow proper procedures exactly
Consider the relationship impact before protesting

Winning Strategies

Beyond following the process, these strategies can improve your win rate:

Strategy 1: Start Small and Build

Begin with smaller contracts to build past performance
Target opportunities matching your exact capabilities
Execute flawlessly to earn strong references
Grow bonding capacity through successful completions

Strategy 2: Know Your Competition

Attend bid openings to learn competitor pricing
Research historical bid tabulations
Identify your competitive advantages
Understand typical market pricing

Strategy 3: Build Relationships

Attend pre-bid meetings and industry days
Meet with small business offices
Participate in vendor outreach events
Join government contracting associations
Maintain contact even between bids

Strategy 4: Pursue Set-Asides

If eligible, set-aside contracts significantly reduce competition:

Small business set-asides
8(a) sole-source opportunities
Service-disabled veteran-owned set-asides
HUBZone preferences
Women-owned small business set-asides

Strategy 5: Price Competitively

Pricing Tips

Research historical pricing for similar work
Understand government budget expectations
Factor in all compliance costs
Balance competitiveness with profitability
Consider strategic pricing for entry opportunities

Common Mistakes to Avoid

Bid Preparation Mistakes

Not reading the entire solicitation
Missing addenda or amendments
Skipping pre-bid meetings or site visits
Underestimating prevailing wage impact
Forgetting compliance costs in estimates
Not leaving time for bid assembly

Submission Mistakes

Late submission (even by seconds)
Wrong submission format or location
Missing signatures or notarization
Math errors in pricing
Incomplete forms or missing documents
Conditional or qualified bids

Strategic Mistakes

Bidding on everything instead of targeting
Pursuing work outside your capabilities
Pricing too aggressively to "buy" work
Ignoring evaluation criteria on RFPs
Not building relationships between bids
Giving up after initial losses

Small Business Programs

The government actively seeks small business participation. These programs can give you significant competitive advantages.

Federal Small Business Programs

Program	Requirements	Benefits
Small Business	Meet SBA size standards	23% federal goal, set-asides
8(a) Program	Socially/economically disadvantaged	Sole-source up to $4.5M
HUBZone	Located in HUBZone, employees from zone	10% price preference
SDVOSB	Service-disabled veteran owned	3% goal, sole-source authority
WOSB	Women-owned (51%+)	5% goal, industry set-asides

Getting Certified

Small Business: Self-certify in SAM.gov based on NAICS codes
8(a): Apply through SBA (9-year program)
HUBZone: Apply through SBA, must maintain eligibility
SDVOSB: Certify through VA (CVE) for VA contracts, self-certify elsewhere
WOSB: Self-certify or third-party certification

State and Local Programs

Many states and localities have similar programs:

DBE (Disadvantaged Business Enterprise)
MBE/WBE (Minority/Women Business Enterprise)
SBE (Small Business Enterprise)
Local preference programs
Veteran-owned preferences

Frequently Asked Questions

How long does SAM.gov registration take?

Allow 2-4 weeks for initial registration. The process involves entering business information, banking details for payments, and identification of NAICS codes. Start the registration well before you need to bid. Annual renewal is required.

Do I need special certifications to bid on government contracts?

For federal contracts, SAM.gov registration is required. State and local requirements vary. You don't need small business certifications to bid, but they can open additional set-aside opportunities and provide competitive advantages.

How much does it cost to bid on government contracts?

SAM.gov registration is free (beware of third-party services charging fees). Costs include bid preparation time, obtaining bid bonds (typically 1-3% annually of your bonding line), and potentially plan purchases. The largest cost is the time invested in proposal preparation.

What is a bid bond and do I always need one?

A bid bond guarantees you'll honor your bid if selected. Typically required for construction contracts over $25,000-50,000, usually 5-10% of the bid amount. If you win, it converts to performance and payment bonds (typically 100% each). Work with a surety agent to establish bonding capacity.

How do I know if my company qualifies as a small business?

The SBA sets size standards for each NAICS code based on annual revenue or number of employees. For most construction trades, the limit is $16.5-$39.5 million in average annual receipts. Check current standards at SBA.gov.

What happens if I make a mistake in my bid?

Minor clerical errors may be correctable. Material errors (wrong price, missing scope items) generally cannot be changed after submission. If you discover a significant error after submission but before opening, contact the contracting officer immediately. Most jurisdictions allow bid withdrawal before opening.

How long does it take to get paid on government contracts?

Federal contracts must comply with the Prompt Payment Act—typically 30 days from approved invoice. State and local terms vary (usually 30-45 days). Construction contracts often pay monthly based on progress. Plan your cash flow accordingly.

Conclusion

Bidding on government contracts may seem complex initially, but the rewards make the learning curve worthwhile. Government work offers reliable payment, steady opportunities, and the chance to build a track record that opens doors to larger projects.

Success in government contracting comes from: thorough preparation, meticulous attention to compliance requirements, competitive pricing, and persistence. Many contractors give up after a few losses—those who persist and learn from each experience build sustainable government contracting businesses.

Start by completing your registrations and identifying a few well-matched opportunities. Focus on delivering excellent performance on your first contracts to build the past performance that enables future wins. Every successful government contractor started with a single project.

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