Pros and Cons of Becoming a Government Contractor

Do you want to become a government contractor? If your answer is yes, you could be on your way to an enriching and fulfilling career. 

But before you can qualify for government contracts, you must meet the qualification requirements that every government contractor is required to establish beforehand. Of course, this can sometimes get tricky and confusing, but many resources are available to guide you. 

You must also weigh the pros and cons of this industry to decide if becoming a government contractor is right for you: 

Here are some pros and cons of becoming a government contractor:


Good Compensation

The government spends, on average, $500 billion on contracts yearly. So, if you ever become a government contractor, you can be sure of receiving great compensation. 

The government expects quality in whatever they do, so they are ready to spend more to achieve that. 

And because the government has credibility, you will have access to different government contract financing options whenever the need arises- in most cases, amounts you’ll typically be ineligible to get from a bank or other financial institution.


Government contracts usually last between a year and three years. In addition, if you prove to be a reliable contractor, you will most likely be contacted and contracted for future projects. 

Such consistency is crucial for a business to continue to grow and develop.  

Credibility for Your Business

Becoming a government contractor gives you credibility in the business world. Being a government contractor is also equivalent to being certified as a trusted provider of certain services by the government and other institutions.  

Moreover, once your business grows and thrives, you can expand to the private sector and increase your market share considerably.  


Red Tape and Bureaucracy 

There are plenty of hurdles to overcome before becoming a government contractor. But it doesn’t end there. 

It is a steep learning curve to navigate red tape and bureaucracy; therefore, most small businesses struggle and remain stagnant over time.

Slow Pay

Becoming a government contractor means hefty compensation. But most times, because of the myriad of required procedures and paperwork, getting paid can take a while.

Many businesses turn to invoice factoring to relieve the burden that comes with slow pay from the government. Government Contract Factoring involves immediately selling your outstanding invoices or accounts receivables to a third-party financial firm in exchange for lump-sum funds.  


Another drawback of becoming a government contractor is the uncertainty that can creep in now and then. Budget cuts, national emergencies, and other unforeseen occurrences can cause the government to halt or delay your contract payment.  

This uncertainty can stifle the growth of your business and cause you to waste valuable resources such as time and money.  

Before deciding to become a government contractor, you must calculate the risks and rewards and weigh them carefully. Hopefully, after doing so, you will be able to discern whether or not becoming a government contractor is the right fit for you and your business.