For small businesses, breaking into federal contracting can be an uphill battle. Traditional contracts often require businesses to front capital, navigate complex regulations, and compete against larger, well-established companies. But what if there was a way to win federal contracts without needing upfront investment?

That’s exactly where Share-in-Savings (SiS) contracts come into play. This performance-based contracting model allows small businesses to partner with federal agencies, deliver cost-saving solutions, and get paid through a share of the actual savings generated. It’s a win-win: agencies cut costs without immediate spending, and businesses gain a competitive edge in government contracting.

How Do Share-in-Savings Contracts Work?

SiS contracts shift financial risk from the government to the contractor. Instead of receiving direct payments upfront, businesses finance the project themselves and are later compensated based on a percentage of the cost savings their solution produces.

For example, a small IT firm might implement an automated system for a federal agency that reduces administrative costs. If the agency saves $2 million over five years, the company may receive a pre-negotiated percentage of those savings—without requiring an upfront budget from the government.

Why Small Businesses Should Consider SiS Contracts

For small businesses looking to enter federal contracting, SiS contracts provide several advantages:

• Lower Barrier to Entry: Without the need for upfront government funding, small businesses can pitch innovative solutions without competing with large firms on price alone.
• Competitive Advantage: Government agencies are more likely to engage with businesses that offer cost-cutting solutions without requiring immediate funding.
• Long-Term Revenue Potential: Payments are tied to real, measurable cost reductions, leading to consistent income over time.
• Faster Decision-Making: Since agencies aren’t committing to large initial expenditures, approval processes can move more quickly compared to traditional contracts.

Industries Where SiS Contracts Thrive

SiS contracts are particularly well-suited for industries that focus on efficiency and cost reduction. Small businesses in the following sectors should consider exploring these opportunities:

• IT & Cybersecurity: Implementing automation, cloud computing, or AI-driven solutions that cut operational costs.
• Energy & Sustainability: Upgrading lighting, HVAC systems, or implementing renewable energy solutions to lower utility expenses.
• Supply Chain & Logistics: Improving procurement, warehousing, or distribution processes to reduce costs.

How Small Businesses Can Secure an SiS Contract

If you're interested in pursuing SiS contracts, follow these key steps:

1. Identify Cost-Saving Opportunities: Research federal agencies with high operational costs and find ways to help them save money.
2. Build a Strong Business Case: Develop a proposal that clearly outlines how your solution will generate measurable savings.
3. Showcase Past Performance: Even if you’re new to federal contracting, highlight relevant private-sector success stories to establish credibility.
4. Leverage Set-Asides & Certifications: If you qualify for programs like 8(a), SDVOSB, WOSB, or HUBZone, use them to gain preference in contracting.
5. Partner with an Experienced Consultant: Navigating government procurement can be complex—consider working with a federal contracting expert to structure a strong proposal.

What’s Next?

Share-in-Savings contracts offer small businesses an opportunity to break into federal contracting without major upfront costs. If you’re ready to explore this path, USFCR can help you navigate the process, structure winning proposals, and position your business for success in the federal marketplace. Contact us today to get started

Ready to take your business to the next level with government contracts? Contact USFCR today, and let's turn your federal contracting goals into reality.

Top Articles

The 17 Most Common Types of Government Contracts Explained

Writing a Winning Capabilities Statement in 2025

Understanding Federal Set-Asides