Top 5 Mistakes Small Firms Make in Public Contracting

Published on: June 09, 2025

Each year, Minnesota’s state and local governments award billions of dollars in contracts for goods, construction, and professional services. Yet many qualified small businesses struggle to win even one bid.

According to the Minnesota Joint Disparity Study (2025), small and diverse firms remain underrepresented in public contracts despite strong availability.

That’s not always because large firms are better — it’s often due to avoidable mistakes that knock small firms out early. Understanding these pitfalls can save time, money, and frustration.

1. Missing Compliance Details

Even one missing document can disqualify a bid.

Common oversights:

Forgetting to sign or date a form

Skipping required attachments like non-collusion affidavits or certified payroll statements

Submitting outdated insurance or bonding certificates

Overlooking addenda (updates or clarifications posted after a bid opens)

Tip:

Always download the final version of any solicitation just before submission. Addenda can change instructions, quantities, or deadlines.

You can track updates at the Minnesota Office of State Procurement (OSP).

If you’re working with a city or county, sign up for their bid notification system. For example:

City of Minneapolis eSupplier Portal

Hennepin County Supplier Portal

2. Ignoring Pre-Bid Meetings

Many agencies host pre-bid meetings (sometimes virtual) to clarify details, walk through project requirements, and answer questions. These sessions are often optional — but skipping them is a mistake.

At pre-bid meetings you can:

Confirm project scope

Learn about site conditions

Meet agency contacts

Hear competitor questions you hadn’t considered

Attending shows professionalism and sometimes reveals small details that help you price or plan better.

Tip:

Take notes and follow up with an email summary to yourself or your team — it helps if you need to explain changes later.

3. Overstretching Capacity

Small firms sometimes bid on projects larger than they can safely handle. It’s understandable — everyone wants to grow — but overcommitting can damage credibility and future chances.

Agencies often check:

Bonding capacity (your limit through a surety company)

Past performance (number and size of completed projects)

Staff and subcontractor lists

If you win a contract you can’t fully deliver, you risk termination or removal from future solicitations.

Tip:

Start with projects at 50–70% of your bonding limit and grow gradually. Use smaller contracts to build a track record that primes and agencies can verify.

4. Partnering with Debarred or Non-Compliant Subcontractors

Even if your own paperwork is perfect, partnering with a debarred or suspended firm can disqualify your bid.

The State of Minnesota maintains an up-to-date list of suspended and debarred vendors:

https://mn.gov/admin/osp/government/suspended-debarred/

If you’re a subcontractor, verify that your prime contractor is clear too. Debarment often affects the entire project.

Tip:

Create a short checklist before forming any team:

Search partner names in the state’s debarment list.

Request a current W-9 and certificate of good standing.

Ask for a copy of their last three references.

Agencies expect primes to vet their partners — doing so protects your reputation and reduces risk.

5. Skipping the Debrief After Losing a Bid

Many small businesses submit bids, lose, and walk away without asking why. That’s a lost opportunity.

Most Minnesota agencies allow or even encourage losing bidders to request a debrief — a short conversation or written summary explaining:

Which criteria were scored lowest

How your proposal compared to others

What to improve for next time

Debriefs are not appeals — they’re learning tools.

Tip:

Always ask for a debrief within a week of the award notice. Keep notes and review them before your next submission.

Over time, debriefs reveal patterns — like pricing too high, missing documentation, or weaker technical sections — that you can correct.

Bonus: Poor Communication During the Process

It’s easy to assume silence is fine after submitting, but proactive communication (within guidelines) makes a difference.

Before submission: Confirm that your forms and attachments meet the requirements.

After submission: A polite check-in about timeline or clarification can prevent misunderstandings.

If awarded: Respond quickly to all contract setup requests. Delays can trigger cancellations.

Public buyers appreciate responsiveness. You don’t have to overdo it — just be clear, prompt, and professional.

Building Better Habits

Here’s a simple pre-bid checklist you can adapt for your company:

✅ Read the full solicitation and all addenda.

✅ Verify certifications (TGB, DBE, CERT) are current.

✅ Gather all required forms, signatures, and insurance proofs.

✅ Confirm your partners are not debarred or suspended.

✅ Schedule a review meeting before final submission.

✅ Request debriefs on every loss within seven days.

Use the same checklist for every bid. Consistency prevents most errors.

Final Thought

Public procurement is competitive, but the biggest hurdles are often procedural, not performance-related. Small mistakes close doors; consistent preparation opens them.

Don’t let avoidable errors keep your business from growth. Double-check every document, build relationships with procurement staff, and treat each bid as a learning process.