Former federal insider Dr. Lori Smith shares battle-tested advice on navigating government procurement, from building past performance to avoiding the pitfalls that kill contracts before they start.

The question arrives in Dr. Lori Smith’s inbox constantly, sometimes tinged with panic: Is the government still contracting with small and minority-owned businesses?

Her answer is unequivocal: Yes. But the follow-up matters more.

“The art of distraction is to preclude us from moving forward,” says Smith, who spent four decades as a federal procurement decision-maker before founding Acu-Elligent LLC, a consulting firm specializing in government contracting. “The opportunities are still going to be there. I’m not going to say the road isn’t going to be bumpy, but the opportunities are still going to be there.”

Smith isn’t speaking theoretically. She signed or negotiated agreements with more than 11,000 contractors during her federal career and managed procurement portfolios worth up to $128 billion. She established the Community Care Network for the Department of Veterans Affairs and trained federal employees pursuing contracting certifications. If anyone understands both sides of the government procurement equation, it’s Smith.

And what she sees from her new vantage point concerns her.

The Real Barrier Isn’t What You Think

When asked about the biggest structural barriers preventing small businesses from entering the federal supplier pipeline, Smith doesn’t immediately point to institutional discrimination, though she acknowledges those barriers exist and persist.

Instead, she identifies something more insidious. “The thing that is stopping us is our propensity to want to get something quick, fast and easy.”

Small businesses, Smith explains, are falling victim to what she calls “shiny thing syndrome,” chasing after every opportunity, following influencers who promise easy wins, and failing to build the foundational systems that sustain government contracting relationships.

“We get caught up with the idea of fame as perceived and presented by someone else,” she says. “Someone potentially is only regurgitating to you what they’ve done to win. Although the steps will ultimately produce a similar outcome, it does not mean that you’re going to have the same experience.”

The result? Businesses submit proposals for opportunities they’re not even eligible to win, pursue contracts without proper funding in place, and bite off more than they can chew operationally.

Building a Foundation That Can Hold Weight

Smith’s advice for positioning a business to win federal contracts starts with an unglamorous directive: pause, review, and assess.

“More often than not, we run into roadblocks because our foundation is not secure,” she explains.

That foundation includes several critical elements:

Proper business structure and certifications. Verify that your legal entity is correctly established and that you hold the certifications you need, whether that’s 8(a), HUBZone, women-owned small business, or service-disabled veteran-owned status.

Financial readiness. Do you have a banking relationship? Is your credit solid? Do you have access to operational capital? Smith emphasizes that fractional lending shouldn’t be your financing strategy for every contract win.

Talent acquisition relationships. If you win a contract tomorrow, can you quickly onboard qualified personnel? Do you have established relationships with recruitment firms?

Capabilities aligned with competencies. Are you pursuing opportunities that match what you can actually deliver? If you’re leveraging a set-aside program, can you perform the required percentage of work in-house?

“Far too often, we’re submitting proposals for requirements and opportunities that we’re not even eligible to obtain,” Smith says. “But because someone has encouraged us to pursue everything, we just drop our names in a hat and that comes with struggle.”

The Past Performance Paradox

For new businesses, the past performance requirement feels like an impossible catch-22. You can’t win contracts without experience, but you can’t get experience without winning contracts.

Smith offers a three-pronged solution.

First, leverage your commercial and corporate experience. “You’re not waking up as babies and saying, ‘I’m in business,'” she points out. Your professional background and any business-to-business work you’ve completed can demonstrate competence.

Second, and this is where Smith’s insider knowledge proves invaluable, pursue subcontracting opportunities. When you work as a subcontractor under a prime contractor, you can claim that project as your past performance for future bids.

Third, do your homework using free government tools. Smith recommends visiting usaspending.gov, entering your NAICS code, and searching across multiple fiscal years. This reveals which agencies are buying in your industry and, critically, which prime contractors are winning those contracts.

“Download the report,” Smith instructs. “One of those spreadsheets is going to list all of those contractors who’ve gotten contracts in your industry code that potentially have a subcontracting opportunity.”

Then comes the strategic outreach. “Present yourself as a 3-D puzzle to a potential partner, showing how you complete the puzzle on their behalf,” she says.

What Actually Makes Proposals Win

Smith has reviewed thousands of proposals. The ones that immediately stand out follow instructions.

“If they told you to remove any kind of branding, they’re going to look to see that you did that,” she explains. “If you have the ability to at least follow the instructions for submission, your proposal is going to move forward.”

Beyond compliance, winning proposals tell a story visually. “If you’re able to tell the story and give them a graph so they can visualize the story, those kinds of things are important,” Smith notes. “Once they can visually see that even before they start reading what your solution is, you’ve gotten their attention.”

The key difference? Present the solution, not just your capabilities. Government agencies know what they need; they want to see how you’ll address their specific problem.

When Contracts End Badly

Contract terminations happen. Smith wants businesses to understand the critical difference between termination for convenience (the government no longer needs the service) and termination for cause or default (you failed to perform).

If you receive a termination notice, acknowledge receipt immediately and stop work if instructed. Then confer with legal counsel before negotiating termination costs.

“My hope is that as a business owner, we become much more prudent in our management and oversight,” Smith says. “We haven’t spent more than we’ve already taken in.”

Preparing for What’s Next

Looking ahead, Smith sees technology and artificial intelligence reshaping government procurement. But she cautions against viewing AI as a shortcut.

“AI is only as helpful as you are able to think critically,” she warns. “Even though someone else’s prompt may help me or get me started, I need to take that prompt and make it my own now.”

Efficiency will increasingly separate winners from also-rans. Can you launch immediately when you win? Have you pre-vetted potential hires? Are your systems integrated and secure enough to protect government data?

The One Thing That Changes Everything

If Smith could give small businesses only one piece of advice, it would be this: Get strategic.

“Identify your top three NAICS codes,” she instructs. “Then identify the top three agencies buying those codes. Then identify who you need to know inside those agencies.”

And here’s the discipline that matters most: Only pursue opportunities where you have a distinct differentiator that aligns with the specific requirement.

“If you don’t have a differentiator that aligns with the effort you are considering pursuing, it is a no-go,” Smith says firmly. “You may win slow, but you won’t win ugly.”

In a landscape where anxiety runs high and uncertainty feels paralyzing, Smith’s message is both sobering and hopeful. The opportunities exist. The path forward requires patience, preparation, and a willingness to build correctly rather than quickly.

“Everyone still has a responsibility to pay attention to what is occurring,” she says. “And then still make sure they go through their checklists.”

The government is still buying. The question is whether you’re truly ready to sell.