For businesses, there is always a never-ending search for new customers, new opportunities and new markets for better sales. There is, however, one market that many businesses have not considered so far – the government sector.
Most businesses are either unaware that there are a number of government contracting opportunities available or avoid seeking out government contracts as they find them too intimidating due to bureaucratic red tape and endless paperwork. They might even think that their business will not be considered for the contract.
The federal government is a huge sector and an organizational entity, similar to any other organization or business. They also need services and products like other businesses in order to function and perform their responsibilities and tasks. They need to buy everything from machinery and equipment to military vehicles, from Post-its and paper clips or transportation and janitorial services, from marketing expertise to functioning websites.
Such services are contracted out to businesses of every size. If you are a business that is selling to nonprofit organizations, there is a large chance that you can easily sell your services to the government sector as well.
How to Get Government Contracts
If you consider the United States government, for example, it buys a large range of products and services from the local US businesses. The US government awards around $500 billion worth in government contracts every year and almost a quarter of those contracts are legally required to go to small businesses.
Since only a few businesses will get these contracts, it is an extremely competitive field, especially for small businesses. A very large number of small businesses bid for these contracts, trying their luck each year since these are big jobs which end up paying big money. With so much competition, it can be difficult for new companies to start out in this sector, but once they have registered themselves in the government’s database, it can become a lot easier for them to get a government contract.
There are a few steps to take before you can start getting contracts from the government for your business. By the end of these steps, you would be able to register your business and be eligible for these contracts:
- You should read about the different types of government contracts that are available and find out the ones that may be suitable for the kind of business you are in.
- Calculate the most recent annual revenue of your business.
- Find the NAICS, the North American Industry Classification System, code for your business. This is available with the US Census index.
- You must check to make sure your business qualifies for the contracting opportunities available. If you are a small business, you can check out the SBA’s prequalification quiz.
- Once you know you are eligible, you can register your business on the SAM, which is the System for Award Management, using the NAICS code and details about your annual revenue.
- You should decide whether you would like to have government contracts as a prime contractor or as a sub-contractor.
- You can now begin your bidding process for government contracts by searching through the GSA Schedules Program, the FedBizOpps and various other programs depending on what type of business you are into.
Small Business Administration Government Contractor Qualification and Pre-Check Process
Even if you already know the basics of how to get a government contract for your business, you need to first make sure whether you are even eligible to get a contract. This is because most small businesses have to go through a rigorous and a lengthy process for qualification before they can compete for government contracts.
You can check your eligibility through a quiz on the SBA’s website. This is a pre-check list for the process of registration. However, you must make sure all the details about your annual revenues are at hand when you take this quiz so that you can get accurate results.
If you find out that you qualify, that is great! You can then register yourself as a contractor for the government and start to seek out government contracts. However, if you don’t, you might have to make some changes to your business in order to qualify.
Figure Out Your NAICS Code
One thing that is required before you take the quiz to check your eligibility is to know your North American Industry Classification System code. This is because it would specify under which section your business falls.
This code classifies businesses according to their economic activity. Through this, it can be determined whether the federal government considers your business a true small business and where it fits in the government’s size range so that you can compete with businesses of the same size for contracts.
The government defines business size according to the number of employees, industry, and number of annual receipts.
Without these NAICS codes, there would be no way to regulate which types of businesses are eligible for competing for government contracts. If a large business with lots of funds and expertise is competing for a government contract with a small business with limited budget and resources, the former would end up monopolizing the competition, thus being unfair to small businesses.
Types of Government Contracts – Prime Contractors and Sub-Contractors
In order to get a contract from the government, you must first decide whether you would bid for the contract as a prime contractor or as a sub-contractor. Prime contractors are those who bid for government contracts directly from government agencies. Sub-contractors, on the other hand, join a prime contractor’s team and help them finalize the contract. They provide a specific product or capability which is required by the prime contractor. Hence, sub-contractors usually have a more skilled area of expertise.
Examples of businesses that are usually prime contractors include law research, annual control services, construction companies, IT support services, transportation and other service-based industries.
Generally, there is more competition for prime contractors as compared to sub-contractors. There is also more risk and work involved. Sub-contractors, on the other hand, do not have the whole responsibility of the contract and are only responsible for a small area of their specialization. Thus, starting off as a sub-contractor is a great way of getting into government contracts and building your business’s credit!
Registering Your Business for Getting Government Contracts
The SAM, which is the System for Award Management, would be the main contact for getting contracts for your business and where you would have to register your business to get the contracts in the first place.
You would need to make a user account and register your business with the US government, which can be done for free. The whole process of registration takes about 7-10 days as the SAM would be validating your business credentials from outside parties such as the IRS. Hence, you will need to have a little patience here before you can actually start bidding.
SAM is also a government database for contractors and government agencies to look for sub-contractors in order to fulfill their contracts. Thus, your registration details should be updated so that you can get a contract without even bidding.
Once it is approved, your registration will be put automatically on the database of the SBA and the Dynamic Small Business Search. Even though these databases are quite useful as they allow government agencies to contact you themselves, a large part of getting government contracts involves bidding on them by yourself.
Finding Government Contracts
Once you have been registered and approved on SAM, you can start looking for government contracts. In order to find government contracts, becoming a part of the government’s database is crucial. By now, you would have probably decided whether you want to bid for government contracts as a sub-contractor or as a prime contractor.
After getting registered on the government databases, you can market your business directly to government agencies, especially if you are aware of which government agency is best suited for your business. In order to do that, you would have to use websites and databases like SUB-Net or FedBizOpps in order to identify the existing requirements and then directly communicate with the agencies to convince them why your business is the best choice to fulfill the contract.
Work with Bid Matching Services
Another way to get government contracts is to get in touch with consulting companies that offer bid-matching services, especially if your business offers quite generalized products and you are unsure about what is the ideal government agency fit for your business. The bid matching service can be quite useful as it will help you bid productively.
Many local Procurement Technical Assistance Centers offer free services for bid matching. You can also get a customized or private service at an affordable cost.
Through these bid-matching services, you can get connected with experienced government contracting mentors who can help and guide you through the process.
Additional Resources for Business Owners
There is a host of resources available to help business owners and allow them to learn about this industry.
- SBA 8(a) Program
The SBA 8(a) program is, by far, the best resource guide in order to get local government contracts for your business, whether they are basic products or services. The SBA program not only guides businesses but also provides development and mentoring services through training which can help a business compete for bidding on government contracts.
- SBA Government Contracting Classrooms
Through the SBA Government Contracting Classroom, which is an online course, business owners can understand fully what is required from them in order to bid for government contracts. It provides all relevant information as a step-by-step guide, from the process of registration to winning government contracts.
- Procurement Center Representatives
Another great way of learning more about this process is through the SBA Procurement Center Representative who can discuss with you the opportunities and methods of getting government contracts for your business, especially if you want to know it in person. They also provide mentoring and counseling.
- SBA or GSA Mentor-Protege Program
Both the Government Services Administration and the SBA have a mentor-protege program that helps small businesses which are qualified and skilled to connect with experienced government contractors. This will help you learn the inner workings of the industry and have a guide on how to bid successfully.
There is a lot of learning required when you decide to bid for a government contract for your business. It takes time, so you would need to be patient and do not expect to win government contracts on your first attempt. You must do a lot of research and do your homework right. Furthermore, make sure you are qualified enough to bid for the contract.
There are various resources available to guide you on getting government contracts successfully and help you in your journey. The best one for businesses, whether they are experienced or first-timers, is the SBA, which is surely the best resource available! With patience, effort and time, you can definitely expand your business to the profitable world of government contracting in no time!