It’s true that the construction industry is growing, but understanding the direction of this growth is an integral part of making it in this new economy. While privately-owned construction projects may have once been the face of the future, the tables are turning, and more construction companies are pursuing job opportunities from the federal government.
In 2011, the U.S. government spent nearly $535 billion obtaining goods and services from outside suppliers. Construction industries make up 15 percent of the country’s small company suppliers, and many of these small businesses provide goods and services to federal agencies.
So what makes federal contracting a smart move for today’s construction firms?
First, there are larger payoffs. Federal contractors have received $1 million or more in federal contracts, and some have even earned themselves a whopping $10 million to work with. Construction firms report that much of their annual revenue comes from federal contracts – including state and government – as opposed to small firm contractors.
More Bidding Opportunities
More bids lead to more competition in the industry, and construction firms that are active in federal procurement are more active bidders. Not only do they go after more job opportunities, but also they place bids on subcontracting jobs. Although these numbers don’t necessarily mean that the construction firms are winning their bids, it does create more growth, development and competitiveness in the industry. This is important in an industry where bidding is down by nearly half.
Is Federal Contracting Right for My Firm?
Federal contracting is not the answer for all construction firms, but if you believe that it can be for you, what are some things you should know?
Experience and patience are key. Construction firms often report that they needed to submit at least four bids before they had one accepted. Firms with 10 or more years of contracting business have a 53 percent greater chance of having a bid accepted.
Once you’re in the federal contracting business, however, it doesn’t take much time to have new bids accepted, and you can go after subcontracting work as well. With a larger investment, more opportunities and eventual procurement success, it’s no surprise why more construction firms are seeking federal contracts.
Blog sponsored by: Construction Reports
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Reference Links: Construction Business Owner