First-Time Contractor Mistakes 2025: 15 Errors to Avoid in Government Contracting
Learn the most common mistakes new government contractors make. Avoid costly errors in registration, bidding, pricing, compliance, and contract performance.
The Most Common New Contractor Mistake
The number one mistake is bidding on everything without a strategic focus. New contractors often waste resources chasing opportunities they cannot win, burning out before building the past performance, relationships, and expertise needed for success. Focus on a niche, build past performance, then expand.
Registration Mistakes
Mistake 1: Incomplete SAM Registration
Leaving SAM.gov registration incomplete or letting it lapse makes you ineligible for awards.
Fix: Complete all SAM sections including representations and certifications. Set calendar reminders for annual renewal.
Mistake 2: Wrong NAICS Codes
Selecting inappropriate NAICS codes limits opportunity visibility or makes you appear unqualified.
Fix: Research NAICS codes thoroughly. Look at what codes similar contractors use and what codes appear on target solicitations.
Mistake 3: Missing Small Business Certifications
Not pursuing 8(a), WOSB, SDVOSB, or HUBZone certifications when eligible leaves money on the table.
Fix: Evaluate eligibility for all small business programs. Set-asides provide significant competitive advantages.
Bidding Mistakes
Mistake 4: Chasing Every Opportunity
Bidding on everything wastes resources and produces weak proposals across the board.
Fix: Develop bid/no-bid criteria. Focus on opportunities where you have clear competitive advantages.
Mistake 5: Missing Proposal Requirements
Failing to follow RFP instructions exactly can result in rejection without evaluation.
Fix: Create compliance matrices. Have someone review proposals against RFP requirements before submission.
Mistake 6: Waiting Until RFP Release
Starting pursuit when the RFP drops is usually too late. Winners shaped requirements months earlier.
Fix: Track opportunities from Sources Sought stage. Engage with agencies during market research phase.
Mistake 7: Ignoring Incumbent Advantage
Bidding against strong incumbents without a clear discriminator rarely succeeds.
Fix: Research incumbents. Identify their weaknesses or find opportunities where incumbents are vulnerable or not competing.
Pricing Mistakes
Mistake 8: Underpricing to Win
Pricing below cost to win may get you the contract but creates performance and cash flow problems.
Fix: Know your costs including indirect rates. Price to win profitably or do not bid.
Mistake 9: Not Understanding Contract Type Risk
Fixed-price contracts place cost risk on you. Underestimating scope on FFP contracts is costly.
Fix: Thoroughly analyze requirements before pricing FFP work. Include contingency for unknowns.
Compliance Mistakes
Mistake 10: Ignoring FAR Requirements
Not understanding FAR clauses in your contract leads to compliance failures and disputes.
Fix: Read and understand every FAR clause in your contract. Get training on government contracting compliance.
Mistake 11: Poor Record Keeping
Inadequate documentation causes problems during audits, disputes, and claims.
Fix: Document everything. Maintain records of government direction, approvals, and communications.
Mistake 12: Missing Certifications
False or missing representations and certifications create serious legal exposure.
Fix: Understand what you are certifying. Consult counsel for complex certifications. Never certify falsely.
Performance Mistakes
Mistake 13: Not Building COR Relationships
Your COR is your primary customer contact. Poor relationships lead to poor evaluations.
Fix: Communicate regularly with your COR. Be responsive and proactive about issues.
Mistake 14: Scope Creep Without Modifications
Performing out-of-scope work without a modification means you may not get paid.
Fix: Identify scope changes and request modifications. Document all direction and its scope impact.
Business Mistakes
Mistake 15: Expecting Quick Success
Government contracting has long sales cycles. Expecting rapid returns leads to discouragement.
Fix: Plan for 12-24 months before significant revenue. Maintain commercial business while building federal pipeline.
The Path to Success
- 1.Start small with subcontracting to build past performance
- 2.Focus on a specific niche where you can excel
- 3.Build relationships with agencies and primes
- 4.Win small contracts and deliver excellence
- 5.Expand gradually based on proven capabilities
Frequently Asked Questions
How long does it take to win a first contract?
Typically 12-24 months from starting serious pursuit. Some succeed faster through subcontracting or small purchase orders, building toward larger prime contracts.
Should I hire a consultant?
Targeted consulting for specific needs (proposal writing, compliance setup) can help. Be wary of consultants promising guaranteed contracts or charging excessive fees.
What is the best first contract to pursue?
Small purchases under $250,000 have simpler procedures. Subcontracting to established primes builds past performance with less risk. Small business set-asides reduce competition.
Start Your Government Contracting Journey
Find opportunities matched to your capabilities. Build past performance strategically with BidFinds.
Ready to Find Your Next Contract?
Get instant access to thousands of government construction bids with our AI-powered platform.
Get Started