Government Contracting: A Well-Kept Secret That’s Been Around for Centuries

Government contracting is no secret—it’s been around for centuries. Yet, many business owners are unfamiliar with this vast opportunity and may not even realize such a great business avenue exists. Despite its long-standing presence and the fact that it’s driving startup growth by 300%—far outpacing the average B2C or B2B small business in the United States—many have never considered positioning themselves in government contracting.

So why isn't government contracting more widely discussed in small business networks? Considering it offers billions of dollars in contracting opportunities for small businesses—procurement from government agencies that aligns with their missions, supports the country’s growth, economic development, and involvement in global conflicts—this lack of discussion is surprising.

Why Is Government Contracting Overlooked?

One reason could be the perception that government contracting is too complex or bureaucratic for small businesses to navigate. Another might be a lack of awareness—many business owners simply don’t know that these opportunities exist or that they are accessible to businesses of all sizes. Additionally, the focus on other industries in mainstream business discussions often overshadows the lucrative field of government contracts.

My Goal: To Educate and Empower

My goal is to educate you on the rich history of government contracting, to highlight its stability, transparency, and its significant impact on business economic growth. I also want to show you how others have successfully capitalized on these opportunities. First, understand that this information is readily available and is no secret—government contracting has been around for a very long time and remains a vital avenue for business growth.

A Detailed Overview of the History of Government Contracting

1. Early Republic (18th and 19th Centuries)

• Founding Era: Shortly after its founding, the U.S. government began contracting with private suppliers for essential goods like weapons, uniforms, and food, particularly during the Revolutionary War.
• War of 1812: The need for reliable contractors became more evident during this war, leading to more structured procurement practices.

2. Civil War Era

• Expanded Contracting: The Civil War (1861-1865) significantly increased government contracting. The Union government relied heavily on private firms for military supplies, transportation, and construction. However, this period also saw rampant profiteering and corruption, leading to public outcry and demands for reform.
• Regulatory Beginnings: The challenges of Civil War contracting led to the first federal statutes aimed at regulating government procurement to reduce fraud and increase accountability.

3. Late 19th and Early 20th Century

• Industrialization Boom: As the nation industrialized, government contracts played a crucial role in building infrastructure, including railroads, canals, and telegraph lines. These contracts often spurred private sector involvement in large-scale projects.
• Progressive Era Reforms: The early 20th century brought significant reforms to increase transparency and reduce corruption in government contracting, including the introduction of competitive bidding.

4. World Wars I and II

• Massive Mobilization: Both World Wars vastly expanded U.S. government contracting. During World War I, the government contracted with private companies for a wide range of goods, from weapons to medical supplies, leading to the creation of the War Industries Board.
• World War II: The scale of contracting reached new heights during World War II, with the federal government becoming the world's largest purchaser of goods and services. This period saw the emergence of major defense contractors and innovations in contracting practices, such as cost-plus contracting.

5. Post-War Era and Cold War

• Defense Dominance: After World War II, government contracting, especially in defense, continued to grow. The Cold War drove demand for advanced weapons and aerospace technology, solidifying the role of large defense contractors.
• Procurement Reforms: The 1950s and 1960s saw procurement reforms aimed at improving efficiency and reducing costs. The Armed Services Procurement Act of 1947 and subsequent amendments standardized many contracting procedures.

6. Modern Era (Late 20th Century to Present)

• Technology Focus: In the late 20th century, government contracts increasingly targeted technology, including IT systems, cybersecurity, and advanced R&D.
• Comprehensive Regulation: The establishment of the Federal Acquisition Regulation (FAR) in 1984 provided a comprehensive framework for government procurement, emphasizing competition, fairness, and transparency.
• 21st Century Developments: In the post-9/11 era, government contracting expanded into areas like homeland security and intelligence, with private military contractors playing a more prominent role.
• Small Business Opportunities: Recent decades have seen increased efforts to involve small businesses in government contracting, with set-aside programs ensuring that a significant portion of contracts are awarded to them.

Conclusion: Unlocking the Potential of Government Contracting

Government contracting remains a vital and lucrative sector, offering vast opportunities for businesses that align their capabilities with government needs. If you haven’t considered government contracting before, now is the time to explore this avenue—it's no secret, and it could be the key to your business’s next stage of growth.

By Coach George-TheProfBizCoach