Most government contracts focus on detailed work specifications, but performance-based contracts shift the focus to results. Instead of dictating exactly how work must be performed, these agreements reward businesses for achieving specific outcomes.
Sealed bidding is one of the most structured and competitive methods used by federal agencies to award contracts. It’s designed to ensure a fair process where the lowest-priced, compliant bid wins. While it sounds simple, mastering sealed bidding requires precision, compliance, and an understanding of the process from start to finish.
A Federal Policy Update That Signals Higher Expectations for Contractors
The Technology Modernization Fund (TMF) has updated its repayment policy, prioritizing full repayment for all future awards. This change is set to influence how agencies choose projects, how vendors craft proposals, and how the federal government plans long-term IT modernization. Contractors offering technology, cybersecurity, or shared services will need to adapt quickly to stay competitive.
A new executive order, "Ensuring Commercial, Cost-Effective Solutions in Federal Contracts," is changing the rules for federal buyers. Agencies are now required to prioritize commercial products and services over custom-built solutions. That means small businesses with ready-to-sell offerings are in the best position they have been in years.
The federal government is raising the bar again. Starting in 2025, all manufactured products and construction materials used in federally funded projects must meet a 65 percent domestic content requirement under the Buy American Act. This rule runs through 2028 and rises to 75 percent in 2029. If you're not auditing your supply chain now, you're risking more than a missed bid; you could be disqualified before you even get started.
Government agencies often purchase goods and services from the same marketplace as private-sector businesses. Commercial item contracts simplify the process, allowing small businesses to sell their standard products to federal buyers with minimal modifications.
Why April Matters in Federal Contracting
Federal agencies don't wait for June to start spending. By the time summer hits, most buyers already have their budgets planned and vendors shortlisted. April is when the planning happens. It’s when buyers clear out Q1 backlogs, prepare their summer acquisition schedules, and move funds to priority projects.
When businesses new to federal contracting hear terms like "Commercially Available Off-the-Shelf (COTS) items," they often think it's just more jargon to memorize. But understanding COTS can actually simplify your entire entry into federal markets, helping you cut through red tape faster.
Imagine taking on a government contract without the risk of losing money on unexpected costs. Cost-reimbursement contracts make this possible by covering your expenses—plus a profit—while you focus on delivering results.
For small businesses, these contracts offer a safety net for unpredictable projects. But to take advantage of them, you need to understand the rules, the risks, and the right strategies to maximize profitability.
