Pricing Strategies for Government Contractors
Pricing Strategies for Government Contractors
In government contracting, pricing is a critical factor, not just for winning the bid but for sustaining long-term performance. Set your price too low and risk a loss. Too high, and you're eliminated on cost. The key is finding the balance between compliance, competitiveness, and profitability.
Here’s how SSRJ Consulting helps contractors master their government pricing strategy.
Understand the Contract Type
Different contract vehicles require different pricing mindsets:
Firm-Fixed-Price (FFP): Minimize risk with careful cost analysis and built-in contingencies
Time & Materials (T&M): Justify labor rates and ensure realistic hours
Cost-Reimbursement: Emphasize indirect rate structures and past performance
Knowing your contract type shapes the foundation of your pricing model.
Build a Realistic Cost Structure
Your cost proposal should include:
Direct labor by labor category
Fringe, overhead, G&A, and profit markup
Escalation assumptions over multi-year periods
Subcontractor pricing with backup data
Government buyers expect to see detailed breakdowns, especially in cost-reimbursable or GSA proposals.
Comply with Federal Guidelines
Stay compliant with:
FAR Part 15 pricing rules
Cost Accounting Standards (CAS), if applicable
GSA disclosure requirements like Commercial Sales Practices (CSP) and Price Reduction Clause (PRC)
Avoid disqualification by aligning with the agency’s cost realism and pricing evaluation criteria.
Don’t Underprice—Position
Government buyers look for the best value, not just the lowest cost. Use your pricing strategy to show:
Why does your solution reduce risk or save time
What efficiencies or innovations support your rate
How your small business status creates indirect value (e.g., SDVOSB, DVBE incentives)
Strategic Pricing Support
At SSRJ, we help small and veteran-owned contractors:
Analyze RFP pricing instructions and scorecards
Develop competitive rate sheets and cost narratives
Align proposals with indirect rate structures
Price GSA and federal bids for sustainability, not just wins
Need Help Pricing Your Next Federal Proposal?
SSRJ Consulting provides compliant, competitive pricing strategies that help contractors win profitably.
📞 Let’s build your next cost proposal together.
