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4 Tips for Pursuing Government Contracts for Small Business

Government contracts for small businesses

Government contracting can be a never-ending opportunity for your company, whether you have a large or a small business. The Small Business Administration (SBA) claims that the federal government spent 132.9 billion dollars in the fiscal year 2019 on small business government contracting opportunities.

Based on the public law 85 – 536 or the so-called Small business act., the federal agencies are mandated to offer government contracts to small disadvantaged businesses, minority-owned businesses, and women-owned small businesses (WOSB). With that being said, from the record-breaking year up to the present, government contracting opened many opportunities for businesses to level up their operations and compete with federal contracting opportunities.

You may be thinking about whether government contracting suits you and your business. Below are some tips that might help you to decide on pursuing government contracting.

What qualifies as a small business for government contracts?

The Small Business Administration (SBA) of the U.S government created small business programs to assist small firms in obtaining federal contracts. Qualified businesses can apply to participate in procurements reserved for program participants.

Qualifying and acquiring certifications as a small business owner may put your company in a better position to sell to the federal government and prime contractors.

Federal SBA small business program goals

Every fiscal year, the SBA works with every federal government department to set small business and socio-economic prime contracting and subcontracting targets.

The minimum goals include the following:

  1. Contracts worth twenty-three percent for small disadvantaged business
  2. Five percent contracts for Women-Owned Small Business (WOSB)
  3. Five percent contracts for Minority-Owned small businesses, including the 8(a) program
  4. Three percent contracts for Service-Disabled Veteran-Owned Small Businesses
  5. Three percent of prime contracts for HUBZone Small Businesses

This program is made to support the mentioned businesses as engines of economic development and has an open competition. Therefore your company must meet the SBA’s size standards in order to be eligible for government contracts intended for small enterprises. However, there is no formal certification for small businesses. Small enterprises might use the System for Award Management to show their status (SAM)

Perhaps the SBA Standards establish the maximum size at which a company can qualify as a small business for a specific contract.

Aside from achieving the numerical requirements for small businesses, your organization must:

  • Be a for-profit organization with any legal structure.
  • Be own business and operated independently.
  • Not having a nationwide dominance in its field of operation
  • Conduct business and physical location in the United States or its territories.

Dynamic small business search

Contracting officers and Federal agencies use the dynamic small business search (DSBS) a federal procurement data system maintained by SBA to discover small company contractors for upcoming contracts. Small businesses can also use DSBS to connect with other small enterprises.

The information you provide when registering your business in the System for Award Management (SAM) is used to populate DSBS, therefore create a complete business profile.

Contract Opportunities

Beta.SAM.gov lists federal business opportunities for contractors. All government entities are obligated to use SAM to advertise all contracts valued at more than $25,000.

What is the easiest government contract to get?

Products, services, research, and technical support are the three categories of government contracts.

Goods

Depending on their needs, government agencies may be seeking for everything and purchase goods from paper clips to bolts and nuts to airplanes and machinery at any particular time. The key to winning goods contract bids is to make sure you have exactly what the government agency and contracting officer are looking for.

Services

You might think that the government already has multiple departments with full-time staff and that it doesn’t need any further help from the private sector or organizations. The truth is that government agencies are looking to recruit small businesses that provide services like consulting, lab testing, and other service-based tasks.

Federal agencies seeking assistance typically want a demonstration and verification that the organization can provide the essential job. If your company satisfies their requirements, you’ll have a better chance of bidding and winning these types of contracts.

Research and Technical Assistance

These agreements are similar to service-based agreements, although they are more focused on specific industries. Scientific research or technical assistance for the examination of legal papers required by government agencies are two examples.

Small business owners who work in highly specialized sectors benefit from this type of contract. If your organization has a solid portfolio, a searchable database on the federal procurement data system, and a list of references from clients with whom you’ve collaborated, you can be on the bidding list for these certain contracts. Taking advantage of a contract’s success can boost your company’s revenue and reputation in your industry, as well as future government contracting opportunities.

Bidding for government contracts is simple if you know the dos and don’ts in evaluating bids, the filing process, and the basics of government contracting.

Keep in mind that while working with important customers like a government agency, your company’s reputation and integrity are on the line. As a result, make sure you have the confidence and resolve to deal with their qualifications and requirements.

4 Tips for pursuing government contracts for small business

Register your business

The first step in getting your company ready to bid on government contracts is to register with the System of Award Management. SAM is a U.S government official website that stores and states procurement databases for companies interested in government contracts.

The SBA has a guide and pointer for small businesses registering and bidding on federal government contracts.

More information on how to register and obtain government contract opportunities can be found here.

Start small

Every business started small, and build their stepping stones to reach where they are right now. With government contracting, the federal agencies take a look at your business’s past performance and turn it into a critical indicator of potential success.

So, as a starter in federal contracting, you should bid first on federal contracts worth as little as $3,000. This seems small, but many prime contractors passed this stage and made their way up in the market.

You may also consider doing subcontracting. Subcontracting is offering your products or services to a large prime contractor currently working with the federal government. By doing this, you can learn more about the process while obtaining income from government contracting.

Establish business network

Government procurement conferences are held on a regular basis by federal and local government agencies that are actively recruiting small business contracts. These industry events are a fantastic way to meet government officials and take part in workshops aimed at assisting small businesses in understanding the procurement process.

As always, a solid reputation among buyers and contracting officers is essential. It is true that proper vendor registration is required, but the procedure does not end there. As a business owner, you must learn how to properly market your products or services.

Starting locally is a solid method for breaking into this market. Begin with government buyers you are most likely familiar with.

The National Association of State Procurement Officials (NASPO) maintains a website that serves as a link to a variety of state procurement agencies and keeps small business owners informed.

You can utilize their website to identify a procurement website that can help you find local bidding possibilities, prospective clients, register as a vendor, and learn about future networking events.

Continue Growing

Winning a government contract may take a while; others say it took them almost two years to win their first federal contract. With this, we can indeed conclude that preparing for a government contract has a long road ahead. You will need to commit and invest your time in pursuing government contracts for small businesses.

Meanwhile, while waiting for your first successful bid or waiting for winning another government contract, it is still better to push your business to its maximum growth. Do not just limit your business development to the government, especially if your product or service is needed and can be sold somewhere else.

Is pursuing government contracting for your business?

I cannot answer this question because, in the end, it is still your decision whether you will pursue this given opportunity or not.

But, if you are seeing your business serving the market for a very long time and gaining larger contracts. Then good for you. But if you are still hesitant whether to push it or not, you shall make a firm decision and concretely study the capabilities of your business.

As for me, government contracting is indeed helpful when you patiently learn and understand how the market works for this can give lots of opportunities to you and your business.

 

For relevant articles, read:

How to Push Through When Business Isn’t Reaching Its Full Potential

Top 10 largest government contractors you need to know

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