How to Get Your First Government Contract When You Have No Past Performance

Excerpt

Winning a first federal contract can feel impossible when agencies want past performance you have not yet had the chance to build. Government-market veteran Joanne Frederick explains how new contractors can establish credibility, use subcontracting and partnerships, understand their customers, and turn early opportunities into a track record.

Breaking into federal contracting can feel like a classic startup Catch-22. Government agencies want evidence that a company can perform the work, but a new contractor cannot build a government track record until someone gives it an opportunity to perform.

That challenge can make otherwise capable entrepreneurs assume government contracting is only for established companies with years of federal experience. Joanne Frederick, CEO of Government Market Strategies (GMS), has spent more than three decades working in government markets, and her own experience suggests a different way to think about the problem.

Her business did not begin with decades of corporate past performance. It began when a relationship created an opportunity to participate in a major project as the government was moving toward what became the modern TRICARE military health program. Frederick says the company’s start wasn’t the result of a carefully mapped entrepreneurial journey. Someone trusted the team with important work, and they kept earning additional opportunities by delivering.

>> READ: When “Small” Gets Bigger: What SBA’s Proposed Size Standards Could Mean for Federal Contractors

“The first opportunity may come through a relationship, but the next one comes because you delivered,” Frederick says. For entrepreneurs trying to enter the federal marketplace, that may be one of the most useful ways to think about past performance: you do not need decades of history on day one, but you do need a deliberate strategy for turning your earliest opportunities into evidence that customers can trust you.

Key Takeaways

• New businesses are not automatically shut out because they lack extensive federal past performance. Depending on the procurement, agencies may consider relevant commercial, state, or local government work, as well as relevant experience involving key personnel.
• Your first goal should not simply be “win a federal contract.” Identify the specific agencies, programs, and problems that genuinely fit what your business does.
• Subcontracting can give a newer business experience in federal programs without immediately taking on all of the responsibilities of a prime contractor.
• Relationships may create introductions, but preparation and delivery are what turn an introduction into a reputation.
• Certifications such as WOSB, HUBZone, 8(a), or SDVOSB status can create access to certain opportunities, but eligibility is not the same as a competitive strategy.
• Build a record of results from every relevant project, even before your first federal prime contract.
• Study the customer before chasing the solicitation. Understanding why an agency is buying can be as important as understanding what it says it wants to buy.

First, Understand What “Past Performance” Really Means

New government contractors sometimes hear the phrase “past performance” and assume it means one thing: previous federal prime contracts.

The Federal Acquisition Regulation is more nuanced. FAR 15.305 states that past performance can indicate an offeror’s ability to perform successfully. For newer companies, a solicitation that evaluates past performance must explain how it will treat offerors without relevant performance history. It can also allow companies to identify similar work performed for federal, state, and local governments and private-sector clients, and relevant experience involving predecessor companies, key personnel, or major subcontractors may be considered when appropriate.

Read the official FAR rules on proposal evaluation and past performance before assuming that not having a federal prime contract makes you automatically uncompetitive.

This does not mean commercial work will always be treated exactly like federal experience. Evaluation criteria vary by solicitation, and relevance matters. What it does mean is that a young company should carefully inventory the experience it already has instead of describing itself simply as having “no past performance.”

If your company has successfully completed a difficult commercial project, delivered work for a state or local government, or employs people who have performed similar work elsewhere, those experiences may help demonstrate capability when the solicitation allows them.

Build Credibility Before You Have a Long Corporate Résumé

Frederick knows this problem firsthand. When her company was young, it couldn’t rely on a long corporate history because that history didn’t exist yet.

“When you are a young company, you do not have a long corporate résumé to lean on,” she explains. “You have to build credibility through the quality of the work itself: understand the problem, be responsive, make good decisions, and leave the client better than you found them.”

That principle applies whether the client is a federal agency, a prime contractor, or a private company.

Start treating early projects as building blocks, not isolated jobs. Document what the customer needed, what your company delivered, what changed because of your work, whether the project met schedule and budget requirements, and what measurable results you can responsibly share.

Over time, these projects become proof.

That approach is similar to one of the basic lessons in our StartingUpTips guide to launching a successful startup: a growing business needs to deliberately build credibility, a customer base and evidence that it can deliver rather than expecting reputation to appear automatically.

Do Not Start by Searching for Every Open Contract

One of the easiest mistakes for a new contractor is opening SAM.gov, searching broad keywords and treating every relevant-looking solicitation as an opportunity.

Frederick recommends starting much earlier.

Government buying decisions often grow out of years of policy, budget, technology and operational decisions. She argues that a contractor who understands that background can look at an opportunity and understand the problem the agency is actually trying to solve. A company without that context may respond competently to the words in a solicitation while missing what is driving the requirement.

SBA makes a similar point in its guide to getting started with federal contracting, encouraging businesses to research whether the government actually purchases their product or service, how large that market is and which agencies are potential buyers.

Before spending days preparing a bid, investigate questions such as:

• Which agencies buy what your company sells?
• How have they purchased it in the past?
• Which companies currently perform similar work?
• Are awards usually made to large primes, small businesses or both?
• What NAICS codes are typically associated with the work?
• What problems does the agency appear to be trying to solve?
• Can your business explain clearly why its capabilities fit those problems?

This is where basic startup market research and government-contracting research begin to overlap. Our StartingUpTips article on coming up with a strong business idea emphasizes looking for real unmet needs rather than building around an idea customers may not actually want. Federal contracting requires the same discipline: understand demand first, then decide where your company belongs.

Consider Subcontracting Before Trying to Be the Prime

Your first federal opportunity doesn’t have to mean winning a large prime contract.

Subcontracting is one of the most practical ways for a smaller business to enter the federal ecosystem. Under a subcontract, your customer is typically the prime contractor rather than the federal agency itself. This can let your company contribute to federal work, learn how large contracts operate, and build relationships without immediately carrying all the administrative and performance responsibility of the prime.

SBA specifically identifies subcontracting as an entry route for companies that may not yet be prepared to work directly with an agency. Its prime and subcontracting guide explains that some federal contracts awarded to larger businesses include plans for small-business subcontracting.

For a young company, the question becomes: What can you do particularly well that a prime contractor might need?

Do not approach a prime with a generic message announcing that you are a small business looking for subcontracting opportunities. Learn what that company has won, what capabilities it already has, where it may need additional expertise and how your team could strengthen its delivery.

Frederick’s larger lesson applies here too. Bring something useful to the room.

Use Relationships to Open Doors—Not Replace Capability

Networking matters in government contracting, but there is an important difference between developing legitimate business relationships and assuming relationships alone will win work.

Frederick’s own first major opportunity came through a connection. What happened afterward mattered more.

>> READ: Joanne Frederick on Building Credibility, Trust and a Career in Government Contracting

“One successful assignment created confidence in the next,” she says. Eventually those assignments became a corporate performance history, but early in the company’s life, people were making much more personal judgments about whether they trusted the team’s thinking, responsiveness and ability to execute.

For entrepreneurs, that means networking should help people understand what you can do. Attend agency industry days, supplier events, matchmaking sessions and industry conferences with enough preparation to have meaningful conversations rather than simply distributing business cards.

The same principle appears in our StartingUpTips advice on building real business connections through networking: useful relationships develop when there is mutual value, not when every conversation begins with a sales request.

Learn How the Government Actually Evaluates Performance

If you eventually win federal work, the quality of your performance can become part of the record agencies use when considering you for future opportunities.

The FAR describes past performance as information about areas including conformity to requirements, workmanship, cost control, adherence to schedules, cooperation, customer satisfaction, integrity and business ethics. For applicable contracts and orders, performance information is recorded in the Contractor Performance Assessment Reporting System, or CPARS.

You can review the official FAR rules governing contractor performance information.

The lesson for a first-time contractor is simple: winning the award is only the beginning. If your first government project becomes the foundation of your future reputation, how you communicate, document, manage schedules and respond when something goes wrong can matter as much as the original proposal.

Frederick’s early growth model was based on exactly that logic: do the work well enough that the first assignment creates confidence in the next.

Register Properly Before You Pursue Prime Contracts

If your goal is to bid directly on federal awards, take care of the basic infrastructure early.

According to SAM.gov’s entity registration guidance, businesses seeking to apply directly for federal awards as prime awardees need an active SAM registration. Registration also generates the company’s Unique Entity ID.

SBA’s federal contracting startup guidance also directs businesses to determine the appropriate NAICS codes, understand the size standards that apply to them and accurately represent their eligibility for small-business programs.

Do this work carefully. Your government-contracting profile should clearly communicate what the company does and should match the markets you actually intend to pursue.

Certifications Can Help, but They Are Not the Strategy

Entrepreneurs sometimes approach federal certifications as though obtaining one will create a pipeline of contracts by itself.

Frederick strongly disagrees with that mindset. Speaking specifically about women entrepreneurs, she says one of the biggest misconceptions is thinking that being a woman-owned small business is itself a strategy.

“It may help create access to opportunities, but you still have to bring something the government needs and show that you can deliver,” she says.

SBA operates several small-business contracting certification programs, including the Women-Owned Small Business, 8(a), HUBZone and Service-Disabled Veteran-Owned Small Business programs. Certain federal contracts can be set aside for eligible participants, but the business still has to compete successfully under the applicable procurement requirements.

Women entrepreneurs interested specifically in Frederick’s experience can also read our sister publication WomenHomeBusiness’s interview, Joanne Frederick on Women’s Leadership, Public Service and Building What Comes Next. Her broader message is relevant well beyond government contracting: access matters, but preparation and usefulness are what establish credibility.

Explore Mentor-Protégé and Joint-Venture Opportunities Carefully

A newer contractor also does not have to build every capability entirely alone.

The SBA Mentor-Protégé program allows qualifying small businesses to receive business-development assistance from experienced mentors. Under SBA rules, approved mentor-protégé participants may also form joint ventures that compete for certain small-business contracts when eligibility requirements are satisfied.

That can give a smaller company access to experience, systems and capabilities that would be difficult to develop quickly on its own. It can also create a valuable learning relationship, but entrepreneurs should still approach any teaming or joint-venture arrangement carefully and understand responsibilities, ownership, work share, economics and applicable SBA requirements before committing.

StartingUpTips has long emphasized the value of experienced guidance for new entrepreneurs. Our guide on finding a business mentor discusses why learning from someone who has already navigated a market can shorten the trial-and-error process. In federal contracting, SBA has created a formal version of that idea for eligible companies.

Turn Every Early Project Into Evidence

Your first few contracts should do more than produce revenue. They should gradually make the business easier to trust.

After each meaningful engagement, capture information while it is still fresh. Document the problem, scope, schedule, your team’s responsibilities, measurable outcomes and what the client valued. Where appropriate and permitted, obtain references or testimonials and create case studies that explain the business problem rather than merely describing the service you sold.

Do the same with commercial work that closely resembles the government services you intend to pursue. FAR 15.305 specifically contemplates relevant federal, state, local and private-sector work when a solicitation asks offerors to identify similar experience.

This is also why Frederick tells new entrepreneurs not to become discouraged by what their businesses do not yet have.

“Every established company started without decades of corporate history,” she says. The important question is whether you can turn your earliest opportunities into proof that you can deliver.

Keep an Eye on Changes to the Definition of “Small”

The competitive environment for new federal contractors could also change.

SBA has proposed major revisions to its small-business size standards that could allow substantially more companies to qualify as small businesses. Supporters see the proposal as a way to give growing contractors more time before they must compete in the unrestricted market. Frederick has raised a different concern: dramatically increasing some limits could put very small and emerging contractors into competitions with substantially larger businesses that have more resources and longer federal track records.

Our companion PowerHomeBiz analysis, When “Small” Gets Bigger: What SBA’s Proposed Size Standards Could Mean for Federal Contractors, examines both sides of the issue, including the implications for past performance and new entrants.

The policy debate matters, but the basic strategy for a new contractor remains the same. Develop a specific capability, study your market, find realistic entry points and make each opportunity strengthen your case for the next one.

Your First Contract Is the Beginning of the Track Record

There is no shortcut that can instantly give a startup the history of a company that has been performing federal contracts for 20 years. Fortunately, that is not the only kind of evidence a new business can bring to the market.

A younger company can bring experienced people, relevant commercial work, specialized expertise, strong partnerships, preparation and a deep understanding of a particular customer problem. It can start as a subcontractor, pursue appropriately sized prime opportunities and gradually turn actual delivery into a record that makes the next customer more comfortable saying yes.

Frederick’s business started because an opportunity appeared and someone trusted the team to take it on. What turned that opportunity into a company that has operated for decades was what happened after the door opened.

The objective is not merely to get your first chance. It is to perform well enough that the first chance becomes evidence for the second.

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