Government contracts are the backbone of any economic recovery. Smart and successful companies are using these avenues of revenue to boost profits and reduce the negative effect of stagnant growth in the private sector. Virtually every industry can tap into federal, state and local government needs if only they know about available contract opportunities nationwide.

Company size also plays to strength in winning these opportunities. Many bids at all levels are set aside and reserved for small businesses. Many prime contractors are required to procure the services of small businesses for subcontracting opportunities.

So many brand name companies are falling prey to the economic downturn which shows no signs of abating anytime soon. It has magnified the reality of this winter of our financial discontent. Yet many smaller companies are thriving, though, by forging ahead in the world of government contract work. For many of these companies creating bids for government contracts is foreign territory. But seeing the federal stimulus money trickling down has provided a much needed respite in this unforgiving economic climate.

Niche industries have found a record amount of government RFP work to help weather these tempestuous conditions. Privately owned mid-sized industries had to quickly learn how to navigate these constantly changing economic twists and turns or else face an almost certain death. Their ability to act swiftly in government contract bidding has been an imperative component, not only in their survival but their thriving bottom lines as well. The revenue allocated for government contracts in the first month of 2010 eclipsed the previous high by a substantial amount. That trend has continued and there is substantive data suggesting this is just the beginning. That will be music to the ears for a wide variety of industries that are utilizing government contracting to offset losses in the private sector.

For example, architectural services are thriving in government contracts despite the abysmal private construction market. Construction rental equipment companies are leasing tractors and forklifts to state and local government entities or private companies fulfilling government contracts. At the moment, the most valued segments of market growth and survival are traced back to federal, state, and local government initiatives and capital.

Other companies like small IT firms are finding recourse in revenue through going after Health IT initiatives and electronic medical records (EMR). Public school software, school bus tracking and GPS/geo-location are other small niche segments in which these flexible technology companies are shifting focus. Each example is just a tiny snapshot of the enormous amount of possibilities that are a derivative of the federal stimulus money finally reaching its designated targets.

Fortune 500 companies are seemingly set in their ways in regard to government bids. In the past government bids were treated with sublime disinterest outside of long standing contracts. The rise of their smaller competitors who can move more quickly and precisely portends more questions than answers from the former corporate elite. In the interim you can expect to see continued growth from small to mid-sized companies savvy enough to maximize this record amount of government contract spending.