How Much Do Government Contracts Pay Small Businesses?
TL;DR: We analyzed 4,500+ federal contract awards. The median value is $127,820 and 70% fall between $25,000 and $500,000 — the range most small businesses can deliver. The government always pays. Browse open tenders to see what's available.
One of the first questions small business owners ask about government contracting: how much do these contracts actually pay?
The short answer: more than most people expect. We analyzed over 4,500 recent federal contract awards tracked by GovBid to see what businesses are actually winning.
The numbers
From our database of recent Canadian and US federal contract awards:
- Median contract value: $127,820 — Half of all awarded contracts are above this amount
- Average contract value: $2.2 million — Pulled up by large infrastructure and IT contracts
- Most common range: $25,000 to $500,000 — About 70% of contracts fall in this bracket
Here's how the awards break down by size:
| Contract Size | Share of Awards |
|---|---|
| Under $25,000 | 11% |
| $25,000 - $100,000 | 39% |
| $100,000 - $500,000 | 31% |
| $500,000 - $2,000,000 | 12% |
| Over $2,000,000 | 7% |
The takeaway: government contracts aren't just for big companies chasing billion-dollar defense deals. The majority of awards are in the range that a small to mid-sized business can realistically deliver.
Browse live contracts in the value ranges you want
Use real pricing context to focus on opportunities that fit your business size and bid capacity.
Browse All TendersWhat types of work pay what
Contract values vary significantly by industry:
Construction tends to have the highest values. Road repair, building renovation, and facility construction contracts regularly range from $500,000 to $5 million. Even smaller jobs like HVAC replacement or roof repair typically fall in the $100,000 to $500,000 range.
IT and professional services vary widely. A simple website development contract might be $50,000, while a multi-year IT support contract can be $5 million or more. Many IT contracts use task orders, where the initial contract value is small but additional work is added over time.
Cleaning and janitorial contracts are steady and recurring. A single building cleaning contract might be $40,000 to $150,000 per year, with multi-year options.
Security services follow a similar pattern — recurring contracts for guard services at federal buildings typically range from $100,000 to $500,000 per year.
Consulting and professional services like engineering, environmental assessment, and management consulting typically fall in the $75,000 to $300,000 range for individual task orders.
How payment works
Government contracts pay differently from private-sector work:
The government always pays. Unlike private clients who might dispute invoices or delay payment, government agencies are legally required to pay for completed work. In the US, the Prompt Payment Act requires agencies to pay within 30 days.
Payment is on delivery, not upfront. Most contracts pay after you deliver the goods or complete a milestone. You'll need working capital to cover costs until payment arrives.
Progress payments are common on large contracts. For construction and long-term service contracts, you'll typically invoice monthly for completed work.
Net 30 is standard. Government agencies generally pay within 30 days of receiving a proper invoice. Some are faster, some are slower, but you have legal recourse if they're late.
How to find contracts in your price range
Not every contract is right for your business. Here's how to filter:
Start with contracts valued under $350,000. These fall under simplified acquisition procedures in the US (the threshold was raised to $350,000 in October 2025), meaning less paperwork and faster evaluations. In Canada, lower-value contracts also have simpler processes.
Look for set-asides. In the US, contracts designated as small business set-asides, 8(a), HUBZone, or SDVOSB have less competition because only qualifying businesses can bid. In Canada, contracts under the Procurement Strategy for Indigenous Business (PSIB) are similarly restricted.
Multi-year contracts build stability. A $100,000/year contract with four option years is worth $500,000 total. These are common in services like cleaning, security, and IT support.
Getting started
The average government contractor wins their first contract within 3-6 months of starting to look. The process is: find relevant contracts, read the requirements, submit a bid, and learn from the feedback whether you win or lose.
Further reading
- Browse open government tenders — Search by industry, location, and value
- Government Contract Value Analysis — Deeper data on award sizes by industry