Why Can't Startups Get US Government Contracts?

"According to a report released by Public Citizen last May, the contracts the government counted toward its small business targets in 2013 "included some held by the largest companies with which the government does business."

The reason the above happens is because people start small businesses and then when they win lucrative contracts the large companies buy them. The article is a good overview of a dysfunctional system though.

Yep. It's all about the contract vehicle. An existing contract with the government is worth it's weight in gold because it's easier to extend a contract than to get one.

If a company has an existing contract with the USG then they could get bought just for the contract.

Pretty sure they can via SBIR program, if it's still around.

edit https://www.sbir.gov/

Startups can and do get government contracts, but the government isn't going to come court you. You (the startup) have to figure it out yourself.

Selling to the government is very similar to selling to any other industry/company: you (the seller or maker) have to understand the customer's acquisition process. The big difference is that the federal government is the largest customer--millions of people and trillions of dollars. Therefore, they have a lot of rules and they all attempt to ensure "fairness" when the government tries to acquire something.

How do you do begin to understand that behemoth? Here are some tips:

-You invest some (a lot) of time understanding the Federal Acquisition Regulations (FAR) https://www.acquisition.gov. There are training classes available online and in person.

-Speak with acquisition specialists or contracting officers to understand the regulations specific to your product/industry.

-Learn about the specific rules/advantages that may apply to your company. There are many many preferences for small business, veteran-owned companies, disabled-owned companies, women-owned companies, etc.

-Understand what "fair" means to the federal government in the context of acquisition. It doesn't mean "the best solution". It doesn't always mean "the cheapest solution".

-Learn how to navigate the government's Request for Proposal (RFP) and Request for Information (RFI) processes so that you can be a part of delivering answers/solutions to the problems that the government has determined they have. The big government contractors have this stuff figured out. They know how to read an RFP and respond, even if they don't have the solution themselves.

-Understand the concept of "prime contractor" and "sub contractors". Prime contractors often win large government contracts but decide to/have to "sub" some of the work out. There are often regulations on how and what types of companies they must sub work out to. For example, AT&T may win a large networking contract but sub the work out to 10-15 other smaller companies to execute.

Because 20 year olds may not have the extensive government contacts required to land big money contracts.