How Government Contracting Works

Government Contracting Guide for First Timers

As a prospective prevailing wage contractor, you’ll need to know the ins-and-outs of how the federal government buys from small businesses. Breaking into the federal government contracting marketplace is an exciting prospect, but it requires good understanding of different processes, bid requirements and federal regulations.

There are several differences between selling to the government and selling to the private sector. One of these is the standardized procedures applied by the government when it comes to buying products and services. Suppliers need to meet certain qualifications.

This can become confusing and even intimidating for small business owners. For prevailing wage contractors looking to become competitive and strategic, read on for key points on how government contracting works.

How the Federal Government Buys from Prevailing Wage Contractors

The federal government can purchase the products and services you offer in different ways, such as through a credit card purchasing authority, through formal requests for proposals (RFPs), bids and negotiations. Government contracting officials have to follow procedures outlined in the Federal Acquisition Regulation (FAR), which covers government purchases.

Learning more about the FAR can help you understand how the government establishes pricing, and the form of contracts and agreements. Here are a few rules and guides which affect the purchasing decisions of the federal government.

1.    Micro-purchases with credit cards – Micro-purchases are usually defined as individual items under $3000; they don’t require competitive bids or quotes. Agencies can simply pay using a credit card or Government Purchase Card.

2.    Simplified acquisition – For purchases under $150000, the government agency or department can use simplified purchasing procedures. These procedures involve less paperwork and fewer approval levels, making it a quicker process than sealed bids. For small businesses and prevailing wage contractors, purchases above $3000 but less than $350000 are set aside exclusively.

3.    Sealed bids – When there are specific requirements to a public project, and when the purchase has to be competitive, the government buys through sealed bids. The involved agency will issue an “Invitation for Bid” (IFB). Businesses will submit sealed bids which will be opened, read aloud and recorded by a contracting officer in a public setting. The lowest bidder who meets all of the requirements gets awarded the contract.

4.    Contracting by negotiations – The government can also purchase through negotiation, which involve a more complex and time-consuming process. This often occurs when the contract exceeds $150000 and when the project requires a highly technical product or service. Proposals in response to an issued RFP can be negotiated.

5.    Consolidated purchasing vehicles – For common purchasing needs such as software or office supplies, the process is centralized. Acquisition vehicles such as GSA Schedules or Government Wide Acquisition Contracts are usually used. These purchases are negotiated by the government, with contracts being awarded to many vendors.

Government Contracting with ARCHER JORDAN

Understanding the different processes that come into play when the federal government makes a purchase is integral to becoming an efficient and competitive prevailing wage government contractor. To help you navigate the different requirements and processes involved in simple acquisitions, bids and other methods, seek assistance from a team of trusted benefits and insurance consultants.

ARCHER JORDAN is a third party administrator providing fringe benefits to government contractors and hourly hires. We ensure compliance with laws concerning prevailing wage workers, and with different government regulations. Contact us today at +1 888-745-0754!

3 handbook cover images.

For Government Contractors

Our Contract Compliance
Handbook Series will help ensure your company is fully compliant and positioned to win and secure more bids!


AD & D
Affordable Care Act
AK Prevailing Wage
AL Prevailing Wage
AR Prevailing Wage
AZ Prevailing Wage
CA Prevailing Wag
CA Prevailing Wage
CA Prevailing Wage 401k
Call Centers
CO Prevailing Wage
Compliance Tips
Critical Illness
CT Prevailing Wage
Davis Bacon Act
DE Prevailing Wage
Department of Labor
Disability Insurance
Employee Benefits
Employee Training
Employer Tips
Farm Labor Plan
Fixed Indemnity
FL Prevailing Wage
Fringe Benefits
GA Prevailing Wage
Government Contracting
Government Contractors
Health and Welfare Wrap
Healthcare Benefits
HI Prevailing Wage
Hospitality Benefits
Hourly Seasonal Workers
Hourly Workforce
Human Resources
ID Prevailing Wage
IL Prevailing Wage
IN Prevailing Wage
IO Prevailing Wage
KS Prevailing Wage
KY Prevailing Wage
LA Prevailing Wage
Limited Medical
MA Prevailing Wage
Major Medical Insurance
McNamara-O’Hara Act
MD Prevailing Wage
ME Prevailing Wage
MI Prevailing Wage
MN Prevailing Wage
MO Prevailing Wage
MS Prevailing Wage
MT Prevailing Wage
NC Prevailing Wage
ND Prevailing Wage
NE Prevailing Wage
NH Prevailing Wage
NJ Prevailing Wage
NM Prevailing Wage
NSRMCA Members
NV Prevailing Wage
NY prevailing wage
OH Prevailing Wage
OK Prevailing Wage
OR Prevailing Wage
PA Prevailing Wage
Part Time Employees
Podcast Guest Appearances
Prevailing Wage
Prevailing Wage Workers
Restaurant Group Benefits
Retirement Plans
RI Prevailing Wage
SC Prevailing Wage
SCA Audits
SCA Compliance
SD Prevailing Wage
Seasonal Workers
Service Contract Act
Small Business
State Prevailing Wage
SUB Plan
Supplemental Benefits
Supplemental Unemployment
Third Party Administrator
TN Prevailing Wage
Trust Services
TX prevailing wage
UT Prevailing Wage
VA Prevailing Wage
Violations – SCA
Voluntary Benefits
WA Prevailing Wage
WI Prevailing Wage
Workplace Health
Workplace Safety
WV Prevailing Wage
WY Prevailing Wage