Getting started with government freight

Smaller trucking fleets and owner-operators tend to spend time searching load boards for freight to fill their trailers, or maybe gaps in their lanes. Some are lucky enough to run dedicated freight or to have a consistent shipper that keeps their trailer full. Others choose to hook on with a larger fleet.

There is another option to acquiring good paying freight, and that is government freight. Government freight doesn’t have to be just from the federal government, but also state and local governments. They, too, have goods and products that need to be moved, and not just in times of natural disaster.

So, how do you tap into some of that freight? The easy approach is to partner with a company that is already hauling under a government contract. In fact, the Department of Transportation recommends partnering with another firm as a way to strengthen any bid you make for freight services.

“Smaller companies often fill niches that round out a prime contractor’s services,” DOT writes. “The government also gives incentives to firms that subcontract work to small businesses.”

DOT views subcontracting as a way for smaller companies to get involved without the need to invest capital to meet the overall bid requirement. The agency says that more than 50% of its subcontracting opportunities are awarded to small businesses, often through a larger, primary contractor.

“Any federal contractor receiving a contract for more than the simplified acquisition threshold must agree in the contract that small businesses (including veteran-owned, service-disabled veteran-owned, HUBZone, disadvantaged, and women-owned businesses), will have the maximum practicable opportunity to participate in the contract consistent with its efficient performance,” DOT noted. “Furthermore, large prime contractors receiving a federal contract exceeding $700,000 ($1.5 million in the case of construction), and that offer subcontracting opportunities, must establish subcontracting plans with goals that provide opportunities to these small businesses.”

DOT maintains a Subcontracting Directory to search for opportunities, but the Small Business Administration (SBA) also offers a service, a Subcontracting Network website, Sub-Net, where prime contractors may post subcontracting opportunities for smaller businesses looking for opportunity. The database lists opportunities by state.

SBA also offers marketing programs and other administrative help to assist small businesses with preparing and submitting a proposal for government contracting work. SBA suggests developing a network of potential firms you can work with on DOT opportunities and to get involved with your local Chamber of Commerce to network and learn about opportunities and potential partners.

Another resource is the GSA, which provides government agencies with cost-effective transportation services, including the military. It’s website includes links to current opportunities. Those opportunities call for “Request for Offers” (RFOs). Importantly, RFOs can only be accepted by a “Transportation Service Provider” (TSP) that has been approved by the Freight Management Branch and agree to “abide by the Standard Tender of Service (STOS) terms, conditions, and associated supplements.”

The majority of opportunities are listed on FedBizOpps.gov. The site currently lists over 32,000 active opportunities – not all in freight movement. At the site, you should register as a “vendor” as someone who wants to sell a service or product to the government. Company and personal information must be submitted.

You can also register to do business with the government at the System for Award Management site.

Any carrier that hauls government freight may also have to meet requirements under the Service Contract Act (SCA). There are exceptions, but the SCA in general requires prevailing wages to be paid for any work.

If you choose to haul government freight – and the process to obtain approval can be lengthy, and based on several stories online, difficult to follow – there is always the problem with payment. Just like shippers who don’t pay on time, sometimes you have to wait to receive that government check. Factoring through companies such as Triumph Business Capital can help with this, allowing your fleet to get the majority of the contract fees in a timely manner that allow you to keep your fleet running and well capitalized.

But whether you factor the accounts receivable or not, government freight can be a profitable avenue to success.