Here’s What You Should Know About Government Contracting Challenges and Opportunities – Infrastructure Act, Supply Chain, and Beyond
You’ve undoubtedly faced challenges as a government contractor over the last few years, with supply chain chaos and upheavals in the labor force. You’ve had to understand the changing requirements and make the most of those government contracting opportunities. Despite these roadblocks, this is a momentous time.
Government spending is on the rise, with an estimated $7 billion in defense spending expected over the next decade. That increase in overall spending pairs nicely with the new Infrastructure Deal, which provides $550 billion in government spending for new U.S. infrastructure projects over a five-year period. According to the White House, the infrastructure bill alone is projected to create more than 1.5 million jobs every year.
So, what challenges and opportunities will you face this year, and how can Rafael Marrero & Company help you position and grow your business to ensure success? Let’s take a look.
What Are the Top Challenges and Opportunities of Government Contracting?
Government contracting is an excellent way to start and grow your business, but you must get a sense of what you’re facing. For every challenge, you’ll find opportunities that make this line of work worth pursuing. So, here’s a quick rundown on some challenges and opportunities you’ll face.
Challenge: You’ll face regulations with government contracting.
In government contracting, you must follow the Code of Federal Regulations, along with a range of other requirements. You’ll place your bids in the System for Award Management (SAM), so you’ll also need Unique Entity Identifier (which replaced DUNS numbers), and NAICS codes.
You need to consider how compliance and security issues will affect your business. This includes knowing how to comply, how those regulations may affect your workflow and business, and how that will affect your business in the future. As just one example, you may partner with another small business to meet the qualifications or requirements for the bid. So, you may need to determine whether the relationship works for you for future bid projects.
Opportunity: There’s lots of work and good pay in government contracting.
If you look at the increase in government spending, there’s lots of work available in government contracting. You could also make a six-figure salary, although those rates will vary depending on the work you do and your role in the project. The new Infrastructure Act, in particular, means that you could take advantage of the government spending at state and federal levels for aging infrastructure, including bridges, roads, and physical infrastructure. Those projects will encompass areas from construction and engineering to design and virtually every other industry.
Challenge: You’ll face competition as a government contractor.
Government contracting pays well above the average, which means you’ll also face competition from other contractors who want to do the same work. You may compete with companies that have more resources, experience, and connections in the contracting world. It’s a renaissance opportunity that will tempt other small and large companies to bid on projects. It’s a great opportunity to tap into growth opportunities at every level of business development.
Opportunity: You could be ideally positioned to get the work in government contracting.
There are opportunities to set yourself apart in the marketplace. For example, if you meet the qualifications to bid, you could take advantage of set-asides, which means you compete with other small businesses. Here are a few of the categories:
- 8(a) Business Development
- Historically Under-Utilized Business
- Service-Disabled-Veteran Owned
- Women-Owned Small Business
Challenge: Government contracting doesn’t offer benefits.
In government contracting, you need to consider that those contracts do not offer health insurance, nor do you get paid time off, retirement packages, or other benefits. You should factor that benefits package into the equation as you’re considering whether you can afford to fully dive into your government contracting venture.
Opportunity: Government contracting is positioned for on-time payment.
While there are many options for contract work, many opportunities do not involve stable employment or timely payments. With government contracting, you’re working for the federal government, so you can be sure you will get paid within the terms of the contract. That stability is essential when you consider how you want to proceed with the growth and expansion of your small business as you continue to take on more government contracting work in the future.
Schedule Your Consultation Today with Rafael Marrero & Company
At Rafael Marrero & Company, we help you understand all the ins and outs of government contracting efforts. Our goal is to help you position yourself and your company so you can make the most of those opportunities while overcoming any challenges that arise. Contact us to schedule a discussion with our experienced team of government contracting consultants. We’re here to help you grow your small business.