Question 1

What does a government contract do?

Accepted Answer

A government contract is a legally binding agreement where an agency buys specific goods or services from a private company to support its mission. It clearly defines scope, deliverables, timelines, performance standards, and how the contractor will be paid.

In federal contracting, each award ties back to a real requirement in SAM.gov or other acquisition systems, not a vague "vendor list." For small businesses, a contract becomes predictable revenue and proof that an agency trusts you to deliver.

Question 2

How do government contractors get paid?

Accepted Answer

Government contractors get paid according to the payment terms written in each contract, usually after delivering and the government accepting the work. Most federal contracts require electronic invoicing and pay by Electronic Funds Transfer directly to your bank account.

Payment timing typically follows Net-30 or similar terms, but may include progress or milestone payments on long projects. The key is submitting clean, accurate invoices that match the contract line items exactly.

Question 3

Is it hard getting government contracts?

Accepted Answer

Breaking into government contracting feels hard at first because you are learning a new language, new platforms, and a relationship-driven sales process. The challenge is less about complexity and more about focus: chasing every SAM.gov posting burns time and proposal budget with little return.

Once you understand your ideal agencies, NAICS codes, and buyer keywords, you can narrow your efforts to realistic, winnable deals.

Question 4

What is the most common type of government contract?

Accepted Answer

The most common type of government contract small businesses see is a firm-fixed-price contract, where you agree to deliver clearly defined work for a set amount. Agencies like fixed-price deals because budget exposure is predictable; you carry most performance and cost risk.

Variations include task orders under IDIQ or multiple-award contracts, where the ceiling is large but funding arrives one order at a time. For services, time-and-materials and labor-hour task orders are also frequent, especially when the scope is evolving.

Question 5

What is the easiest government contract to get?

Accepted Answer

The "easiest" government contract is usually a low-dollar, low-risk service or product aligned perfectly with your existing past performance and relationships. Micro-purchases and simplified acquisitions under the Simplified Acquisition Threshold often require lighter competition and faster awards, especially when buyers already know and trust you.

Easiest rarely means "cold bid from SAM.gov"; it means being the obvious choice when a program office has a small, urgent need.

Question 6

What is the downside of government contracts?

Accepted Answer

Government contracts create stable revenue, but they also come with real downsides: long sales cycles, heavy compliance, and strict performance expectations. Cash flow can be lumpy if you rely on one or two contracts and an invoice gets delayed.

Audits, reporting requirements, cybersecurity rules, and subcontracting limitations can strain a small team's capacity. There's also the risk of recompetes, protests, or changes that shift scope and margin mid-performance.

Question 7

Who gets the most money in government contracts?

Accepted Answer

The largest dollars typically flow to big prime contractors, but a significant and growing share is reserved for small businesses through set-aside programs. Agencies must meet small business goals, including 8(a), HUBZone, SDVOSB, and WOSB categories, so capable firms in these programs can tap billions in annual spending.

The small businesses earning the most usually do three things well: build deep relationships at a few agencies, team intelligently with primes and peers, and specialize in high-value mission support.

Question 8

What is the $20 $50 rule for government employees?

Accepted Answer

The "$20 / $50 rule" is an ethics guideline that limits what federal employees can accept from outside sources, including contractors. In many agencies, they generally cannot accept gifts over a modest value from a single source at one time, nor exceed a yearly aggregate cap from the same source.

Exact thresholds and exceptions come from federal ethics rules and agency policies, but the spirit is simple: avoid anything that looks like you are buying influence. As a contractor, treat this as a guardrail—keep outreach professional, focused on mission value, not perks.

Question 9

What is the rule of 2 in government contracting?

Accepted Answer

The Rule of Two says that if a contracting officer reasonably expects at least two responsible small businesses can compete at fair market prices, the requirement should be set aside for small business. This is one of the most powerful protections for small contractors because it turns market research into real opportunities reserved for you, not just the largest primes.

Your job is to be visible during that research so the buyer can "see" at least two qualified small firms.

Question 10

What is the first rule of contracting?

Accepted Answer

The first rule of contracting is: do not chase random opportunities—chase the right opportunities with a clear plan to win. Many new contractors burn out writing proposals for deals they never shaped, at agencies that do not know them, for work that stretches beyond their capabilities.

Instead, start with focus: target a few agencies, understand their missions, learn how they buy, and build relationships before the RFP drops. From there, every capture step and bid decision becomes intentional.

Question 11

What is the 2 year rule for contractors?

Accepted Answer

The "2-year rule" often refers to expectations around small business program participation and the time needed to build meaningful past performance in the federal market. Many firms underestimate how long it takes to move from registration to consistent revenue; two years is a realistic horizon to establish relationships, win starter work, and prove reliable delivery.

For some small business certifications and mentor-protégé programs, agencies also look for a track record rather than a brand-new entity.

Government Contracting FAQs

What does a government contract do?

How do government contractors get paid?

Is it hard getting government contracts?

What is the most common type of government contract?

What is the easiest government contract to get?

What is the downside of government contracts?

Who gets the most money in government contracts?

What is the $20 $50 rule for government employees?

What is the rule of 2 in government contracting?

What is the first rule of contracting?

What is the 2 year rule for contractors?

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