Blog > Guides

How To Bid for Government Construction Projects Successfully

Public infrastructure: It’s one of the cornerstones of the construction world.

From public buildings to road construction and upkeep on major works projects, it’s clear that there are a host of opportunities for companies that work with public authorities and secure government contracts.

With that said, contractors must approach government-centered projects with a serious mindset, specifically attuned to the needs and requirements of federal and state agencies. Factors such as tight budgets and legally mandated accountability make these projects unique.

See how public sector entities around the world are embracing effective construction software tools.

Placing a winning bid for government construction work means more than simply proposing the lowest cost figure. Contractors have to bring their practices in line with requirements and become adept at following the specific processes laid out by agencies to not only win contracts but also become reliable winners of government projects.

How Do Contractors and Government Agencies Work Together?

The relationship between government agencies and contractors is based on a simple fact — federal, state, and local offices have lists of infrastructure projects to complete and a pre-set budget with which to accomplish them.

Contractors enter the public sector construction process to become partners of government agencies, executing on the goals and objectives drawn up by federal, state and/or local authorities to meet the needs of their communities. To make sure they find the right contractors, agency directors follow established formulas and procedures.

Companies that follow the requirements in an efficient and repeatable way will have a natural advantage over less-prepared competitors when it’s time to bid for especially lucrative government contracts.

See how advanced software platforms can keep government jobs in line with regulations.

How Government Contracts for Architects and Contractors Are Awarded

The General Services Administration (GSA) handles the federal construction project bidding process in the U.S. The agency manages all stages of government contract proposals, from initial design through construction. There are different processes for selecting the firms that will design new public works projects and the contractors that will build them.

Design

To become the designer on a government project, architect firms must pass a two-step selection process. The first stage is based on comparing the technical merits of proposals and ranking firms accordingly. In the second, the agency negotiates with the firms on rank order to agree on the contract. The whole process is similar for small and large federal construction projects. The latter is called “Design Excellence” and can take between six months and a year.

Construction (Smaller Projects)

Contractors are chosen using one of three methods — sealed bidding, low-price technically acceptable proposals or competitive orders against existing Indefinite Delivery, Indefinite Quantity (IDIQ) contracts. These are all based on the same general theory: government agencies are tasked with selecting the lowest-cost proposal that is deemed responsible under Federal Acquisition Regulation (FAR).

Major Construction Contracts

The process for awarding larger federal construction projects can take several forms depending on the type of project in question. Generally, there are two proposals — one based on technical or management specifications and the other dealing with price. The GSA evaluates the proposals on their merits and chooses which offers the “Best Value.” The process is designed to take less than 60 days.

While price is a major component of successfully winning government construction work, companies must win on other dimensions, this predominantly includes technical merit and compliance with regulations.

Requirements To Secure and Execute Government Construction Contracts

Companies bidding for government contracts must be ready to provide the level of service and value to qualify under the standard assessment methods employed by agencies.

One important fact to note is that contractors of all sizes can apply for government work. In fact, there are U.S. government contracts specifically set aside for small- and medium-sized enterprises overseen by the Small Business Association (SBA).

Qualifying as a small business is one of many special statuses that can set a contractor apart when applying for U.S. government work. The others include being disadvantaged, coming from an underutilized area or being owned by a woman or a military veteran. All of this information is stored in the company’s profile in the primary database for contractors working with the government, the System for Award Management (SAM).

When registering for SAM, companies receive the necessary information to bid on public sector contracts, including a Unique Entity Identifier (UEI). Contractors also need one or more codes for the North American Industry Classification System (NCAIS) that classify the type of business and types of services they provide.

While completing all of these requirements is an additional process that companies must complete, the reward — access to a list of government contracts — can make the extra effort worthwhile.

Construction Contract Enforcement: Be Aware of Performance and Payment Bonds

One issue to think of early on is the guaranteed nature of government contracts. Firms have to meet specific targets regarding progress and payment or else risk fines. The government uses performance and payment bonds as the mechanism to enforce compliance. These bonds apply to all U.S. GSA contracts over $100,000, and they mandate that the contractor will fulfill its part of the construction contract and pay all of its laborers and suppliers.

The fines in case of failure to meet standards equal the full value of the contract plus price increases unless the government agency agrees to a lesser penalty. Avoiding these fines is a strong incentive for organizations to audit their own practices before taking on government work.

Making Effective Bids for Government Construction Products

When dealing with the U.S. federal government, applying for government contracts takes place entirely through the SAM.gov portal. The site allows companies to search for job types that are relevant to their services, or to simply enter an NAICS code that matches their offerings — for example, NAICS Code 23 is the aggregated code for the construction industry, which is followed by a sub-code to delineate a specific sector within construction.

By narrowing down the type and location of the job, contractors can find a list of suitable bid opportunities. These opportunities can become a valuable source of work, as long as companies have built up their capabilities to provide the necessary services and meet the specific requirements of the projects in question.

The fact that government contracting opportunities are accessed through a searchable online database raises a few important points for contractor firms that want to establish a strong presence for working in the public sector:

Contracts are impersonal

Applying for government work alongside a variety of other businesses through a digital portal means companies must have compliance, process and any issues squared away in advance. Rather than speaking with each of the applicants, government representatives will assess the strength of each digital application and make a determination. This means companies must be meticulous about their digital profiles and their application submissions.

Digitization has fully arrived

The online nature of federal applications should serve as a signal to contractors that digitized operations are now the industry standard in construction and related sectors. While construction firms have sometimes been slow to adopt new technologies, it’s now essential for these businesses to move away from their legacy systems in favor of more effective digital methods for planning, data management and more. This can help them assemble effective construction bids and connect with government agencies throughout projects.

Contractors who know their own capabilities for what they bring to the construction industry are great candidates to succeed in the public sector. These are businesses that are serious about auditing their processes to make sure they’re ready to comply with all necessary regulations, while also having a strong grasp of their ability to execute on various types and sizes of contracts, so they never run into trouble with performance and payment bonds.

Learn about the impact of collaboration software within government agencies.

The State of Construction Planning Within the Public Sector

Government agencies and the companies that work with them can thrive most effectively when they optimize both their internal practices and their collaborative capabilities. The same updates and upgrades to systems that help companies succeed in the private sector will set them up for positive experiences executing on delineated and strictly budgeted government contracts.

Reacting to Incentives and Pressures

In the public or private sector, there’s pressure to run construction projects as efficiently and transparently as possible. The key difference is that when dealing with government work, there are policies, regulations and guidance that agencies follow and process through in order to select contractors and direct funds to them. This encourages organizations to embrace one of today’s key construction industry trends: modernized planning.

With funds strictly allocated in annual budgets, public sector agencies have little wiggle room and need to account for every dollar. Today’s construction platforms allow these organizations and their most prominent private sector partners to embrace a more data-rich style of planning, from architectural reviews and approvals to oversight throughout the job.

Running an Optimal Operation

There are several specific aspects of public sector projects that can benefit from digitizing the planning process:

Maximizing Productivity: Doing more with less is a common refrain within the public sector which has to do with strict budgets and guidelines. The streamlined and automated processes of modernized construction software can have a positive impact in this regard.
Using Cost-Effective Methods: Getting value for money is a process that runs deeper than maximizing output. Government agencies and their partners should also make sure every tool they invest in has a large net positive impact. Advanced construction software fits this description.
Standardizing Projects: Maintaining strong standards and keeping all government projects within strict parameters is another powerful use case for software tools. These systems can enforce everything from uniform workflows to visible audit trails.
Optimizing Environmental Performance: Tracking environmental factors around a given construction project — including total embodied carbon — can be essential for public sector agencies, which may be bound by green mandates. Planning software can integrate these calculations into a project, from design on.

No organization in construction is exempt from the need to modernize, but considering their proximity to regulatory agencies and the strict conditions around their funding, public sector organizations and their partners may feel this requirement acutely.

See how the plan review process is digitizing.

Embracing a New Future of Efficient Government Contracting

The technological revolution sweeping the construction sector can have a profound impact on the way contractors engage with government agencies and complete their work. Purpose-built systems designed for the construction sector allow companies to:

Create standardized, compliant documents through templates.
Store and access centralized information about every stage of each project.
Collaborate via markups of digital twins and 3D building plans.
Coordinate work between the office and the jobsite.
Target and track sustainability goals

Whether a contractor is interested in exclusively targeting public sector contracts or intends to run a more balanced portfolio of jobs, up-to-date software can deliver optimized performance.

Check out collaboration software solutions’ role in the public sector and try Bluebeam for free.