Securing a government contract is often a difficult task. Businesses and contractors have to bid on the project without knowing what others may propose. Complex proposals that include details about the work provided, project timelines and budgets factor into the decision of who gets the contract.
Especially if a company has never secured a government contract before, it may bid aggressively in the hopes of developing professional relationships that could lead to more work in the future. One of the ways that companies increase their chances of a successful bid is to keep the cost of the project as low as possible.
Inflation in recent years has been a serious issue for consumers and organizations alike and could cause complications for those seeking government contracts. It is one of many hazards those seeking government contracts must contemplate when preparing to bid.
Inflation has lessened, but the risk remains
By the end of 2023, inflation rates had stabilized after increasing sharply in recent years. There is little certainty about what the economic future will bring, but many hope that inflation rates will remain low going forward.
While inflation may not be as pressing of a concern now as it was a year ago, there is still a lesson for businesses in what recently transpired with the sudden surge in certain costs. Bids typically need to include enough wiggle room to account for unpredictable changes. Not only do the prices quoted need to offer a bit of flexibility so that companies can complete the project without taking a loss if there is significant inflation, but they may need to address risk factors and other aspects of the proposal as well.
From building in some leeway into the project timeline to including alternate plans for different materials in case of supply chain disruptions, there are many ways for those seeking government contracts to protect against the possibility of economic disruptions and other challenges that might prevent them from fulfilling the contract.
Inflation is one of many practical considerations that people often overlook until it is too late. Executives and business owners often need assistance identifying issues that they need to address in contracts and other company documents. Having the right help when bidding on government projects and preparing for other major company transactions could take some of the risk out of pursuing upcoming projects.
