What Is Business to Government (B2G)?

Business to government (B2G) is the sale and marketing of goods and services to federal, state, or local agencies. In modern lingo, there are three basic business models: business to consumer (B2C), business to business (B2B), and business to government (B2G).

B2G is not an insignificant chunk of business. By the end of May 2024, the federal government had spent over $3.8 trillion in the fiscal year to date.1 Notably, a portion of its business is supposed to be spent on small business suppliers.

Business to government, or B2G, is the provision of goods and services to government agencies at the federal, state, and local levels.
Most contracts are granted in response to a request for proposal (RFP) from an agency.
Businesses bid for contracts by submitting responses to RFPs.

Understanding Business to Government (B2G)

B2B business can be as modest as a small business providing IT support services to a town government. It can be as big as Boeing, which builds helicopters, missile defense systems, fighter jets, and surveillance aircraft, among many other products, for the U.S. Department of Defense (DoD).2

At the federal level, the General Services Administration (GSA) is the government’s official buying arm, developing and implementing regulations on a vast array of products and services purchased for the U.S. government.3

How Businesses Get Government Contracts

Governments generally solicit services from the private sector through requests for proposal (RFPs).

The GSA website, GSAAdvantage.gov, is a shopping portal for government agencies and gives an idea of the sheer breadth of products purchased by the federal government.

Not surprisingly, given the enormous numbers and range of federal, state, and local purchasing requirements, an entire sector of the internet is devoted to matching businesses to government agencies.

Advantages and Disadvantages of Business to Government (B2G)

Businesses that are used to interacting with other businesses or directly with consumers often encounter unexpected hurdles when working with government agencies.