Federal government agencies typically purchase products and services in one of three ways: sealed bids, negotiation, or simplified acquisitions. Of these methods, simplified acquisitions provide the easiest path to federal contracts for small businesses: The procurement process is streamlined and many federal contracts are reserved exclusively for smaller firms.
Once called "small purchases" and also referred to as "government quotes," simplified acquisitions are typically reserved for smaller-dollar buys, although they can be used for purchases of commercial items priced as high as $5 million. The good news for small businesses is that simplified acquisitions of supplies and services between $2,500 and $100,000 are usually reserved exclusively for these businesses; as long as the federal contract officer can obtain competitive offers from at least two small companies.
More flexible buying process
Unlike other purchasing methods, simplified acquisitions don't adhere to a set buying process. Government officials can make and pay for a simplified acquisition using cash, purchase orders, government-wide purchase cards or blanket purchase agreements. To win these acquisitions, companies must simply provide contracting officials with a quotation, which, unlike a bid, is not binding on the firm submitting it until the firm accepts the government's order.
Procedures Can Vary By Contract Value
For simplified acquisitions between $2,500 and $25,000, contracting officials obtain either oral or written quotations from businesses. These purchases usually require agency buyers to obtain quotations from at least three sources to make sure the pricing is reasonable. Simplified acquisitions under $2,500 are another story: agencies can make these so-called "micro-purchases" without soliciting competitive quotations, as long as the contracting official thinks the price is reasonable and other micro-purchases are distributed fairly among qualified suppliers. Officials often pay for micro-purchases with government commercial purchase cards, which are similar to commercial credit cards and provide fast, easy payment.
Response and Repetitive Purchase Procedures
Agencies typically issue a purchase order in response to a vendor's oral or written quotation. The purchase order describes everything the purchaser and seller must know to complete the transaction, including prices, delivery details, and federal contract and acquisition numbers. The purchase order is not a binding contract unless the seller accepts the order or performs the required work.
Blanket Purchase Agreements further streamline the simplified acquisition process. A federal contracting office typically issues these agreements when an agency wants to make repetitive purchases from a seller over a set period of time. BPAs cut down on paperwork for contracts and allow for speedy transactions.
Unlike larger purchases, many of these smaller-dollar deals aren't advertised in the Commerce Business Daily and other print and online publications. In fact, most solicitations between $10,000 and $25,000 are simply displayed in a public place in the federal contracting office, and those below $10,000 may not be posted at all.
Market To Target Agencies Early To Build Relationships
The key to landing these federal contracts is to market directly to the federal departments and contracting officials that are likely to buy your products and services. Send them brochures and arrange to meet in person so that they think of your company when they're ready to buy.