Building a Government Contracting Business From a Harrisburg Basement

Sam Delgado started his IT services company out of a basement office near Harrisburg, targeting a niche most competitors overlooked: small state agency contracts under $250,000, too small for large national contractors to bother bidding on.

"The big firms wanted the ten-million-dollar contracts," Delgado said. "I wanted the two-hundred-thousand-dollar ones nobody else showed up for."

That strategy required learning the state's procurement process in granular detail, including certification programs for minority- and veteran-owned businesses that opened access to set-aside contracts. Delgado, a former Army logistics officer, says his veteran-owned certification opened doors that would have otherwise taken years to access through competitive bidding alone.

The company now employs 22 people and has expanded beyond its original basement office into a full floor of commercial space near the Capitol complex. Delgado says the biggest ongoing challenge isn't winning contracts but managing cash flow, since state payment cycles can run 60 to 90 days even after work is completed.

"You learn to manage a credit line like it's part of your business model," he said, "because in this line of work, it basically is."