Government Contracting Myths Debunked: 5 Lies Keeping You Out

The General Services Administration (GSA) Multiple Award Schedule (MAS) — a long-term, government-wide contract vehicle that pre-negotiates pricing for thousands of products and services — is a powerful channel. But calling it a prerequisite is like saying you need a franchise agreement to open a restaurant. It is one business model, not the only one.

Most federal procurement dollars flow through what the FAR calls “open-market” purchases. These are acquisitions conducted under FAR Parts 12 (commercial items), 13 (simplified acquisition procedures), 14 (sealed bidding), and 15 (negotiated procurements) — none of which require the seller to hold a schedule contract ^[1]. FAR 8.002 and 8.004 establish a priority ordering for supply sources, but they also explicitly permit open-market buys after required sources have been considered ^[1].

For newcomers, the fastest on-ramp is often Simplified Acquisition Procedures (SAP), which apply to purchases at or below the Simplified Acquisition Threshold (SAT) of $250,000 ^[1]. SAP buys move faster, require less paperwork, and are largely reserved for small businesses under FAR 13.003(b)(1) ^[3]. Below the Micro-Purchase Threshold (MPT) — generally $10,000 — contracting officers (COs) can use a Government Purchase Card with minimal competition requirements ^[1]. If your offering is commercially available and priced below $250,000, SAP is often a faster path than a schedule contract.

Does a GSA schedule help? Absolutely — particularly for commercial products and services where agencies want speed and pre-competed pricing. GovBidLab’s GSA Eligibility Calculator can help you assess whether the investment makes sense for your offerings. The bottom line: a GSA schedule is a strategy, not a gatekeeping requirement.

If you have ever walked away from a government opportunity because you assumed the cheapest bid would automatically prevail, you left money — and mission value — on the table. The idea that federal procurement is a pure price war is one of the most damaging government contracting myths in circulation.

The FAR establishes two primary evaluation approaches for negotiated procurements, and understanding the distinction is central to learning how to win government contracts:

Under FAR 15.101-1, the government can — and frequently does — award to a higher-priced offeror when the qualitative benefits of that proposal justify the price premium ^[2]. FAR 15.304 requires that evaluation factors be stated in Section M (evaluation criteria) of the solicitation, and those factors drive the award decision ^[2]. When Section M says “best value tradeoff,” the Source Selection Authority (SSA) is comparing your technical approach, management plan, staffing, risk, past performance, and price — and the government may pay more for a meaningfully better solution.

The real insight is this: in a best-value evaluation, your proposal is a business case for why you are worth the price. Companies that price at the bare minimum and submit thin technical volumes lose to competitors who invest in proposal quality and demonstrate clear value. Learn to recognize which evaluation method applies before you build your price — and invest your proposal effort accordingly.

This myth has a particularly cruel effect: it creates a chicken-and-egg trap. You need past performance to win contracts, but you need contracts to build past performance. Fortunately, the FAR explicitly breaks the cycle.

FAR 15.305(a)(2)(iv) states that when an offeror has no record of relevant past performance, the agency must evaluate that offeror “neither favorably nor unfavorably” — a neutral rating ^[2]. This means a new entrant cannot be penalized for being new. In a best-value tradeoff, a newcomer with a strong technical proposal and a neutral past performance rating can beat an incumbent with a mediocre technical approach and average past performance.

Under SAP (buys at or below the $250,000 SAT), agencies have even broader flexibility. COs can consider commercial contract performance, state and local government work, references from private-sector clients, and the experience of key personnel — all as evidence of capability. This means the project your team delivered for a Fortune 500 company, a state transportation department, or a municipal utility can serve as relevant evidence of your ability to perform.

Beyond neutral ratings, small business programs fundamentally change the competitive math. The “Rule of Two” at FAR 19.502-2(a) requires that acquisitions above the MPT be set aside for small businesses when the CO has a reasonable expectation that at least two responsible small businesses will submit offers at fair market prices ^[3]. Under SAP, the small business reservation at FAR 13.003(b)(1) makes set-asides the default, not the exception ^[3]. These set-asides shrink the competitive field dramatically — a newcomer may be competing against two or three small businesses instead of the full market.

And for businesses in designated socioeconomic programs, sole-source authority — the legal ability for the government to award a contract to a single vendor without competition — exists under several statutory frameworks:

One practical first step: make sure your NAICS codes — the numerical codes that categorize what your business does — are accurate in your registration, since set-aside eligibility is tied to SBA size standards organized by NAICS code. GovBidLab’s free NAICS Code Lookup tool lets you search and verify the right codes in seconds.

This myth gets the causation backward. There are strict rules about communication during certain phases of a procurement — but those rules exist precisely because pre-award engagement is so valuable that the government wants to ensure it happens fairly. The FAR does not discourage contact; it structures it.

FAR 15.201 explicitly encourages exchanges with industry before the solicitation is released ^[2]. These exchanges take many forms:

• Requests for Information (RFIs) — where an agency asks industry to describe capabilities or comment on draft requirements. An RFI is not a solicitation and does not commit the government to a procurement.
• Draft solicitations — where the agency publishes a working version of the Request for Proposal (RFP) for industry feedback, often resulting in requirement changes that benefit well-positioned vendors.
• Industry days and pre-solicitation conferences — where program managers and COs present upcoming needs face-to-face. These are where experienced contractors gather intelligence about mission priorities, budget cycles, and incumbent weaknesses.
• Sources Sought notices — formal presolicitation notices asking industry to identify capable vendors, often used to determine whether a small business set-aside is feasible under the Rule of Two.

This early engagement is not a courtesy — it shapes requirements. Agencies conducting market research under FAR Part 10 are trying to understand what is available, at what price, and under what terms. If you are not in the conversation, someone else is defining the requirement for you. Savvy contractors treat industry days, RFIs, and Sources Sought notices as the opening round of competition, not as optional reading.

Once the solicitation drops, communication becomes more formal. Questions typically flow through a designated CO, and all questions and answers are shared with every offeror to maintain a level playing field. The Procurement Integrity Act (PIA) prohibits the disclosure of source-selection information (like competitors’ pricing or evaluation scores) and contractor bid or proposal information ^[2]. Violating the PIA can result in criminal penalties, civil fines, and contract cancellation — which is why COs are careful about what they say and to whom once a procurement is active.

What to do: Monitor SAM.gov for presolicitation notices, RFIs, and Sources Sought postings in your NAICS codes. When an agency hosts an industry day, show up with a capability statement — a concise, one-to-two-page document summarizing your company’s competencies, differentiators, past performance, and socioeconomic status. GovBidLab’s free Capability Statement Generator helps you build a professional version quickly. Engaging early is not just permitted — it is how experienced contractors win before the RFP drops.

Let’s be blunt: registration in SAM.gov is free. Obtaining a Unique Entity Identifier (UEI) is free. The government charges nothing ^[6]. If someone offers to “register you in SAM” or “activate your UEI” for a fee, treat that as a red flag. Third-party companies may charge for form-filling services, and some provide legitimate consulting, but the government itself does not charge for registration — ever.

SAM.gov replaced the Central Contractor Registration (CCR) system, and the UEI replaced the legacy Data Universal Numbering System (DUNS) number, which was previously issued by Dun & Bradstreet. Since April 2022, the UEI is generated within SAM.gov at no cost when you register your entity ^[6].

That said, the registration process is not trivial. You will need your Taxpayer Identification Number (TIN), banking information for Electronic Funds Transfer (EFT), your NAICS codes, and details about your company’s size, ownership, and socioeconomic certifications. Common pitfalls include mismatched legal business names, incorrect NAICS codes, and failure to renew annually (SAM registrations expire every 365 days). You can verify your UEI or look up another company’s registration status using GovBidLab’s free UEI Lookup tool — another free resource.

If the myths above are not the real obstacles, what is? In our experience, the genuine barriers for companies learning how to win government contracts are more mundane and more fixable: not understanding which opportunities match your capabilities, not engaging early enough in the acquisition cycle, underinvesting in proposal quality, and treating compliance as an afterthought rather than a discipline. None of these require a GSA schedule, a rock-bottom price, or years of federal past performance. They require attention, strategy, and the willingness to learn a system that — for all its complexity — is designed to be open.

For DoD-focused contractors, cybersecurity compliance is an increasingly real barrier. The Cybersecurity Maturity Model Certification (CMMC) framework is rolling out in phases, and understanding where your company stands is essential. GovBidLab’s free CMMC Calculator can help you estimate your current posture and identify gaps.

Whether you are a first-time entrant learning how to win government contracts or a seasoned business development director refining your government bid strategies, the myths we have covered share a common thread: they mistake one pathway for the only pathway, or one rule for the whole system. The FAR is dense, but it is also public, searchable, and — once you learn to read it — remarkably transparent about what is required and what is permitted.

Pick the myth that has most affected your decision-making and read the FAR citation behind it. If you are not yet registered in SAM.gov, start there — it is free, and it is the single non-negotiable prerequisite to any federal award. If you are already registered, search SAM.gov for an upcoming industry day or RFI in your NAICS codes and participate. The system is more accessible than these myths suggest, and the best way to prove that is to take the first step. Explore GovBidLab’s full suite of free government contracting tools to accelerate your readiness.