February 7, 2006
When you price out your bid, you get to be the expert - but that also means a lot of responsibility. Learn what you need to know to price out your bid to the federal government.
First, let's get the fantasy ideas out of the way. The 30-year-old stories about $200 toilet seats and $300 hammers are long gone. Actually, if you knew the real stories, you'd find them to be really depressing because they basically aren't true. Bidding to the government is competitive, and you have to believe that if you plan to be successful.
Let's start with the basics: If you can't make money on it, don't bid it.
Next, determine your true costs. A lot of bids you'll see won't give you much time to respond, so you'll be tempted to estimate your costs and just tack on a percentage or use a companywide rate. Don't do that — find out what your true costs are.
Use a costing method that applies to small business. One is activity-based costing (ABC), a cost-management method that lets you determine the actual cost associated with each product and service. It allows you to find out if you're really making any money on a particular job.
Then do the following:
If you have questions, call the point of contact (POC) or buyer. Don't assume: Successfully bidding on federal contracts means that you must deliver on-time, quality products at the right price.
To find a PTAC, visit www.aptac-us.org, click on Find Your Local PTAC, and click on your state.
Jim Kleckner is a retired acquisition specialist from the Department of Defense and owner of Government Contracting Assistance, 2168 Spaulding Ave., West Dundee, IL 60118-3521, 847-426-7003, firstname.lastname@example.org.
The FABRICATOR® is North America's leading magazine for the metal forming and fabricating industry. The magazine delivers the news, technical articles, and case histories that enable fabricators to do their jobs more efficiently. The FABRICATOR has served the industry since 1971. Print subscriptions are free to qualified persons in North America involved in metal forming and fabricating.