Wondering how to work with the government as an independent consultant? The federal government is the largest contractor in the world, with many opportunities for independent consultants. Each year, billions of dollars in contracts are set aside for small businesses - especially women, minorities and veterans. In fact, the Small Business Administration recently launched ChallengeHer, a traveling campaign to help match women-owned contractors with government and business supply chains.
Government contracting is another option for independent consultants to sell their services and grow their business. However, it is important to understand the process, requirements, and the resources needed to engage with the government.
Where to Start
To be eligible to win government contracts, you will first need to obtain a D-U-N-S number, a unique nine digit number for each physical location of your business. Dun&Bradstreet (D&B) provides this D-U-N-S number within one business day. You will then need to register with the System for Award Management (SAM).
You can explore active federal government contracting opportunities and see what is up for bid at fbo.gov. It is helpful if you are on the Government Services Administration (GSA) schedules. The GSA Schedules program spends approximately $50 billion a year in federal procurement, much of it going to small business.
While there are opportunities for independent consultants to sell services to the federal government, Sara Conde, a Consultant Services Advisor for MBO Partners, advises that government contracting is one area where independents don't want to go alone. "The criteria can be very difficult for independents to meet on their own and so most have to go through other vendors or integrators to secure contracting opportunities. For instance, it is nearly impossible for an independent consultant to hold their own security clearance, so they will be absorbed into an existing government vendor." Conde continues, "It is very difficult for an independent consultant or small business to have a direct government contract. It will typically require going through one or more entities. This of course also has an impact on the fees paid to the consultant."
Independent consultants often connect with integrators through a relationship with someone at the company or through their network. Staffing firms are another way that consultants can connect with integrators. Integrators know how to work with the federal government, but working with one does not provide support for fulfilling requirements of completing the paperwork required.
The Really Fine Print
Independent consultants may not be aware of the number of hours and resources required to pursue and manage a government contract. Conde likens it to "commercial paperwork on steroids."
To apply for federal contracts, you must complete Representations and Certifications. These provisions require you to represent/certify to a variety of statements ranging from environmental rules compliance to entity size representation. Conde explains, "Representations and Certifications are designed to ensure that you are in compliance with laws and regulations and are extremely detailed. For example, one recent document had 22 pages of required information about the type of accounting system." Conde continues, "In addition to taking a great deal of time to complete the paperwork, there are legal implications. Independent consultants are representing and warranting that they are in compliance. If you are going through the process on your own, it is advisable to obtain a legal review."
In addition to the time, resources and credentials needed to obtain a government contract, there may be additional requirements. Government contracts, like many large commercial contracts, may require additional liability insurance. Invoicing and payment terms may also differ from standard business contracts. It is common for government contracts to be monthly, net 60 - which means consultants would not receive payment for 90 days. Mistakes can delay payment for several months.
There may also be special requirements, such as special invoicing requirements, that are not typical to small business invoicing systems. Government contracting also requires you to keep track of your funding and notify the government when you have reached 75% of your funding. Failure to notify may carry a penalty. Conde recommends reading contracts very carefully to ensure that you understand your responsibilities as a contractor.
Beyond the Paperwork
Independent consultants interested in contracting with the government often solely focus on the certifications and requirements. "Like any commercial venture, relationships play a significant role in the contracting process," says Conde. "One of the biggest problems I see is that independent consultants assume that if they meet the criteria they will have opportunity. Meeting the contracting criteria allows you to be part of the pool of applicants, but relationships will help you stand out as more than one of many available vendors. Sometimes consultants don't realize how hard that is going to be."
While the paperwork and requirements differ, as with all contracting opportunities, relationships matter. Independent consultants should continue to apply the same practices of networking and building relationships to government contracting as they do with other business opportunities.
The Bottom Line
Government contracting is a monumental task and can detract from billable time. It is important for independent consultants to assess the requirements and decide if it is right for their business. While the requirements can be overwhelming, the opportunities do exist, and they could be the right fit for some consultancies.
Another option to pursuing government contracting is to utilize MBO Partners. MBO is currently on the GSA schedule and offers several programs of interest to government contractors.
More importantly, unlike integrators, MBO Partners offers support for completing the paperwork for government contracting. MBO Partners provides Independent Contractor consolidation, payment, payrolling, and risk mitigation services for independent individual service providers and small business contractors engaged by federal agencies. Partnering with MBO Partners allows independent consultants to pursue government contracts without having to shoulder the burden on their own.
Portable Employer of Record is a term referring to a category of companies that help freelancers and independent consultants manage their businesses. A PER acts as an umbrella employer for self-employed professionals, in return for a small percentage fee on revenues earned.
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