Guidelines for Companies New to Government Contracting

Sales people take note. You are free to meet with and sell federal end users. Federal purchasing rules not only allow it but encourage it. How else could end users asses the value of your product or service? Your competitors are also free to make sales call to the same end users you are calling on. This is where the real competition does take place; or ideally does not if you are the only one doing the selling. Does this sound like the commercial sector?

It is but here's the rub; they are not free to buy from you even after the end user has determined that you offer the best value. After all, public money is being spent and we need not waste it. Now you are in the red tape soup. The end user and the contracting officer (from the official contracting office) have to find a way to buy from you under the "rules" governing competition.

Federal purchasing rules require more competition (and documentation showing competition) as the size of procurements increase. Starting with micro-purchases (under $3,000) the rules allow sole source buys made directly by end users using a government credit card. The $3,000 limit can be increased to $15,000 or even larger under emergency or special circumstances. Credit card purchases do not have to go through the official contracting office so the market segment is identical to the commercial market.

All other federal purchases (besides credit card purchases) must be transacted by official contracting officers. Purchases up to $25,000 can be made with simplified purchasing procedures, e.g., three verbal, fax, or emails quotes. Purchases over $25,000 require a full and open competition (public bid) or use of a multi-vendor contract.


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