Are you considering working with government contracts but are concerned that there may not be that many options available or that there will be too much competition? Some business owners also worry that the process will be complicated and it won’t be lucrative enough to warrant going through it.
The reality is that there is an incredible amount of money in government contracts that is changing hands every single year. For instance, in 2021, reports show that the government spent a total of $637 billion on contracts alone. If you think that number is quite high, it was actually a decrease from the year before. In 2020, the government spent $54 billion more, even when adjusting the numbers for inflation.
Is the government buying services or products?
As you probably suspect, the government is using this money to buy both products and services, but it can help to know how these categories are balanced. Defense agencies tend to spend about the same amount – roughly $193 billion – on both products and services. Civilian agencies, however, spend over $199 billion on services and a relatively small $51 billion on products. As a result, the number of contractual options that you have may depend on whether or not your business offers products or services and how much demand there is for them.
There’s also an incredibly wide range of various products and services being purchased. For example, food services are counted in this number, as are aircraft services, such as booking flights. Healthcare is also included. In terms of products, pharmaceuticals often make up a large bulk of the spending, and defense agencies tend to buy a lot of equipment.
What should you do?
Now that you can see how much money there really is and how many different options there are to utilize these government contracts, it’s important to know what steps you need to take to get the process started. This opportunity can be more complicated than some other types of business engagements, but it also offers a lot of potential.