Cleaning is a great industry because you’ll always have potential future work. Moreover, the advent of COVID 19 caused a nationwide demand to disinfect facilities thereby creating an immediate need for commercial cleaning services.
Bidding for government cleaning contracts is one more way to grow your cleaning company and increase your business’s revenue stream.
Commercial cleaning costs can range from $0.07 to $15 per square foot depending on the property type, size and project scope. According to a 2019 report by the U.S. Bureau of Labor Statistics, the average national salary for cleaning services ranged from $19,620 to $44.880.
The Federal government spends over $500 billion per year on government contracts and sets aside a minimum of 23% of those contracts for small businesses.
Keep reading to learn how to bid on government cleaning contracts and review tips to compete with other bidders. There’s also information for undocumented business owners considering whether they should bid on government contracts.
A government cleaning contract could be to clean offices, city hall, public schools, state universities, libraries, police stations, firehouses, or even public hospitals.
Government Cleaning Contracts: Requirements
You won’t be able to bid on government cleaning contracts until you satisfy these requirements.
Secure an EIN
Getting this 9-digit tax identification number is the first step to complete the remaining requirements.
Without an EIN, you can’t apply for a DUNS number or register your business with SAM (see below). Even if you don’t bid on government cleaning contracts, having an EIN helps your business appear more professional and may help you qualify for a future small business loan.
Apply for a DUNS number
Government agencies and others can review your business profile when you register your business with Dun & Bradstreet. Once you apply for the free number online, it usually takes one business day to receive it.
Register your business with SAM
To bid on government cleaning contracts and receive payment, you must register your business with SAM (The System for Award Management) on this website.
The registration is valid for one year and requires that you supply your NAICS industry code. It’s important to match the category with your business specialty. Within three to five business days, you should receive an email confirming your registration.
In 2020, the FBO (Federal Business Opportunities) website moved to beta.SAM.gov and is listed as “contract opportunities.”
Deciding to become a government contractor means you agree to comply with the government’s procurement process and adhere to enforcing labor laws and other requirements.
Verify your small business status
The size of your business is one of the factors the government uses to evaluate your business. To see if your business qualifies for government contracting, use SBA’s size standards tool.
Apply to become a GSA vendor
Contracts are available with the U.S. General Services Administration but you must register to compete for them. As a vendor, you can receive online training on how to respond to online contract solicitations and sell to the Federal government, and search for Federal contract opportunities.
Register with the Census Bureau
To get your business in front of the public and agencies searching for government cleaning contractors, register with the Census Bureau.
Many of the government cleaning jobs are spot bids meaning they expire when you complete the job while others develop into long-term cleaning contracts.
How to Bid for Government Cleaning Contracts
1. Understand RFP vs IFB
Government agencies vary as to bidding requirements. Some are by invitation only while others set up their proposals as open bids.
A Request for Proposal (RFP) provides specific requirements such as required insurance, a statement of the work required, or wage expectations. Contract requirements may include pre-bid meetings and interviews.
Agencies use an Invitation for Bid (IFB) format when there are clearly defined contract details and they are only interested in awarding contracts to the lowest bidder.
2. Where to find contracts
Government agencies are required to use the SAM website to post contracts over $25,000. But SAM isn’t the only website that lists government cleaning contracts.
The Small Business Administration also lists government agencies seeking small business contacts on the DSBS (Dynamic Small Business Search). Another website, usa.gov provides links for Federal contracting opportunities.
Most websites operate similarly providing a filtering system to search information by keywords, publish and respond dates, zip code, and other criteria.
You can always talk or chat with a live U.S. agent should you have any questions about bidding.
Stay up to date on contract opportunities on SAM, DSBS, and other sites as well as local cleaning contracts in your region.
3. Review the proposal
Take notes when you review RFPs or IFBs before you submit the bid. The proposal may require that your business is a qualified GSA vendor or may request copies of your cleaning business documents.
Once you make sure you meet all requirements, you can make the bid.
4. Bid for the contract
When you submit your proposal, you need to make sure that it’s extremely thorough, detailed, and clear. The RFP or IFB should work as your guideline when writing your proposal, but you should also add extra information that could help you (for example, certifications you have).
When detailing your costs, be thorough too, what goes to the service itself and the supplies, what part goes to wages, etc. Of course, you’ll need to make sure your bid is not too high, but not too low either, it needs to be competitive, attractive, and also give you a good profit margin.
When awarding contracts, the government pays the prevailing wage set for local, state, and government agencies.
10 Tips to Win a Government Bid
Implement as many of these suggestions as possible to increase your chance of being awarded a government contract.
- Have all your business licenses and registrations up to date.
- Be a problem solver when bidding on government contracts to give you an edge over competitors.
- Pointing out your extraordinary skills and successful achievements may tip the scale in your favor.
- Make sure to answer every question and fill in every blank. Many submissions are tossed when the bidder fails to follow directions.
- Make sure that your proposal has no misspellings or poor grammar.
- Roughly 5% of contracts are awarded to economically or socially disadvantaged groups. You can improve your chances of being eligible for these contracts by having a minority business certification or a WOSB (Women-Owned Small Business) certification.
- Talk to an existing government contractor and ask for tips and ideas on how they secured contracts.
- Do your due diligence and research how to calculate pricing. Cleaning proposals may only request a square foot price or a more detailed bid to include costs of supplies, labor, operating costs (insurance as an example), and your business’s typical profit margin.
- We recommend that you start small and build from there. As you gain experience bidding on projects, you can take on larger projects.
- Have enough operating capital. When your business is awarded a government cleaning contract, you must have operating capital for existing business operating expenses as well as money to complete the government contract. Many entrepreneurs secure a small business loan so they can take their business forward without experiencing a financial setback.
What if I Have an ITIN?
Undocumented business owners operate their businesses using an ITIN (Individual Taxpayer Identification Number) when they haven’t obtained citizenship to qualify for a social security number.
Having an EIN is one of the requirements to start bidding on government contracts. Usually, application guidelines allow taxpayers to use a SSN or an EIN.
The EIN is also required to apply for a DUNS number and to register your business on SAM.
The IRS protects the private information of all taxpayers including undocumented business owners who have an ITIN. The only time the IRS shares information is when there’s a criminal investigation related to the taxpayer number.
Therefore, you can grow your business by bidding on government cleaning contracts without adversely affecting your immigration status. Doing so is a positive sign to government officials that you’re serious about becoming a citizen of the United States.
Government Cleaning Contracts Could be your Business’s Future
Being awarded a government cleaning contract can cement your business’s future. As work is completed satisfactorily and your pricing remains competitive, you put your business in a position to secure future and more profitable contracts.
Completing the necessary steps such as registering your business with SAM, obtaining essential tax ID numbers, and implementing proven tips helps you appear as a strong contender among government agencies looking for reputable vendors.
A small business loan can be your answer to success when you start competing for government cleaning contracts. Use this tool to calculate a business loan to get an idea of how much money you can borrow and repay.
At Camino Financial, we match your loan with your business’s needs and goals while always honoring our motto, “No Business Left Behind.” We come alongside our clients at every step of their financial journeys.