Federal agencies are more reliable clients than state or local governments because they can print money to cover debts. State and local entities often have balanced budget requirements and can face shortfalls after disasters, risking non-payment on fulfilled contracts.
While furloughed federal employees are typically guaranteed back pay after a shutdown, government contractors are often not. These individuals, who perform similar work without the same protections, face a permanent loss of income, highlighting a significant and often overlooked inequity in how shutdown risks are distributed.
Eric Coffey broke into government contracting by partnering with existing businesses. He managed the complex bidding process for them in exchange for a percentage of the contract, leveraging their history and workforce to win bids he couldn't have secured alone.
Agencies should refuse to pitch if a prospective client will not provide a budget. This policy protects valuable resources from being wasted on ill-defined or non-committal opportunities. There are polite but firm ways to request this crucial information before proceeding.
The government's standard procedure is to disburse funds and attempt to recover improper payments later—a highly inefficient process that costs hundreds of billions annually. A more effective system would require real-time prepayment verification, defaulting to "no pay" if eligibility cannot be confirmed, preventing fraud before it occurs.
The "land and expand" strategy in federal contracting involves winning an initial bid and performing well. This builds trust, leading agencies to offer additional, often unlisted projects directly, bypassing the competitive public bidding process for smaller contracts under a certain threshold.
Unlike most countries that fund legislation upon passing it, the U.S. Congress passes laws first and separately debates funding later. This fundamental disconnect between approving work and approving payment is a structural flaw that repeatedly manufactures fiscal crises and government shutdowns.
Challenging the myth of slow government procurement, the Department of Energy completed an eight-figure software deal with a brand new vendor in just five weeks. This speed was possible because the vendor presented a strong ROI and a solution to an urgent, high-level problem, proving that bureaucracy can move fast for clear priorities.
For stablecoin companies like Tether seeking legitimacy in the US market, the simplest path is to back their assets with US treasuries. This aligns their interests with the US government, turning a potential adversary into a welcome buyer of national debt, even if it means lower returns compared to riskier assets.
Government procurement is slow because every scandal or instance of fraud leads to new rules and oversight. The public demands this accountability, which in turn creates the very bureaucracy that citizens and vendors complain about.
Unlike the US, emerging markets are constrained by financial markets. If they let their fiscal balance deteriorate, markets punish their currency, triggering a vicious cycle of inflation and higher interest rates. This threat serves as a natural check on government spending, enforcing a level of fiscal responsibility.