Welcome again to Gateway to Government’s blog. Today is step five in our Seven Steps series. Today we will look at the bidding process; deciding what to bid on is obviously important. Many companies have gone out of business because they took on a task too large for them or went broke waiting for the government to pay them!
Step 5 – Don’t Bid on Something You Can’t Do
This may seem like common sense, but sometimes what one thinks is expected in a contract isn’t. Review everything and make sure that your business is capable of all of the elements, both technically and financially! I have heard of many cases where small companies put in a bid and won a great government contract but ended up going out of business because they couldn’t support the finances while waiting to get paid (in most instances, the government pays after job completion).
Once you have read the fine print and asked all of your questions, review the entire contract again. For instance, one contractor (not one of our members!) lost over $18,000 on a bid because they hadn’t realized that they needed to train others to help with installation of their product. They though that they were going to be able to do all the work themselves!
Again, reading the bid requirements is vital to knowing what your company can and cannot fulfill. Examine the requirements and compare them to your capabilities, then review your business’ financial situation – can you afford to float the full cost of the contract potentially for months while awaiting completion and payment? While Gateway does its best to send bids related to your business, it is ultimately up to you to review the bid and decide whether or not your company can handle the contract.