How to Start Bidding on Government Construction Projects: A Quick Guide for General Contractors
February 11, 2021
Breaking into government construction projects isn’t as easy as just submitting a bid, at least for general contractors. GCs often need to prequalify to work for government entities or register their business with the government before they can start bidding. We’ll take a brief look at how general contractors can start bidding on government construction projects and give you some tips to know beforehand.
The first step for most general contractors who want to get into government work is to apply to be on a list of prequalified general contractors. Government entities, such as universities, school districts, and other government departments, often request qualification packets from contractors.
Once approved, general contractors are placed on a shortlist to be notified of open bid opportunities and are given a chance to bid against a smaller group of contractors. The reduced competition makes prequalification a great way to get started in government work.
You’ll be asked to submit information about your company, including past project experience, client references, and financial statements. Reviewers will be looking for companies with a history of good performance and satisfied clients, as well as those that are financially stable. After the documents are reviewed, you’ll be notified if you’ve been accepted as a prequalified GC.
Visit the websites of your local universities, school districts, and government departments to find out how to become prequalified. Look at all levels of government, city, state, federal, and all government departments, like the military and Department of Justice. All branches and forms of government need construction work.
Government bid sites
Most government entities that solicit construction work will post their bid opportunities on government bid websites. You’ll find sites for federal opportunities, state and local ones as well. Register with the sites that list projects in your service area, and they’ll send you notifications as projects are posted for bid. With most sites, you can sign up for free.
Each state has its bid opportunities website. For example, Oregon projects are posted on OregonBuys. You can also look for local bid sites for school districts, universities, and other government departments.
What to know before you bid on government projects
If you’re new to bidding on government projects, there are a few things you should know before you start:
1. You must be licensed to work in the state the project is located if it’s required. Some states may also require bonds for public work.
2. Some public projects will require performance and payment bonds. These bonds are provided for the amount of the contract. Make sure you know your bonding capacity before you start bidding.
3. Insurance limits on commercial projects are higher than residential. Make sure you check the limits required for each project before you bid.
4. Some state and federal projects require you to pay prevailing wages for the area where the work is taking place. These are comparable to union wages. You’ll also be asked to provide proof that you’ve paid your employees the required rates. Be sure to add some additional administration time for this reporting to your bid.
5. In government projects, low bid wins. There’s a lot of competition for these projects, so markups are generally lower than in private construction.
6. Minority-owned businesses have an advantage in bidding on public projects. Some projects have quotas and targets for hiring minority-owned companies, which means those businesses may win more projects whether they’re a low bidder or not. If you’re a minority business, it pays to get certified so you can get more opportunities.
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