What is a US government contractor?
Every fiscal year, the United States government releases data on one of its official websites with all the products or services they will need. These are directly offered to any company that wishes to work with them. Once companies, firms, and businesses successfully passed through the government’s standard and were able to work with them, they were then called government contractors.
United States government contractors produce products and services for the federal government. Government contractors become employed by government agencies through winning solicitation notices that are out for bid.
Government contractors can win contracts by submitting the lowest cost bid in response to a proposal required by law and government contract compliance issues. Like the United States government agencies, government contractors come in different industries and sizes.
What is required to bid on government contracts?
Getting into the government contracting industry is not easy, and it takes up a lot of processes before being officially considered a prime contractor. Here are the things that you need to comply with for your business to get into government contracting.
1. Register your business
In order to be eligible for government contracting opportunities, you must first register your business with the System for Award Management. The System for Award Management (SAM) compiles all the databases of companies interested in government contracts. Before submitting your proposals, your company must be updated and registered as a government contractor on this platform. More information about SAM.gov down below.
2. Acquire DUNS Number
Data Universal Numbering System of Dun & Bradstreet is a nine-digit number that may instantly identify a business, corporation, or firm. During the whole existence of your business, your DUNS Number will remain the same. You can request a DUNS Number for your business online through the DUNS Request Service Platform.
3. Get a NAICS code
The government requires businesses to have NAICS or North American Industry Classification System code. In the United States government, this code is used to classify business, the industry it belongs to, and its accounting system, tax services, and economic statistics.
Take note that if your company works in different industries, you may need to register with multiple NAICS codes. For more information about the NAICS code, the Small Business Administration (SBA) offers consulting assistance.
4. Check your EIN
Some business owners prefer to establish a business while using their social security numbers. But, the government requires federal contracting vendors to have Employee Identification Number (EIN). The Internal Revenue Service provides a free Employee Identification Number, often known as a Federal Tax ID Number.
5. Obtain Commercial and Government Entity Code
Commercial and government entity code or CAGE is a five-character unique code given to every business. Just like the NAICS, CAGE will serve as an identifier to your business, allowing the authorities to recognize your company quickly.
6. Apply for certification
The government offers different certification programs to any business called the set-aside program and sole-source contracts. These certifications bring significant benefits and a fair playing field for businesses of different sizes and classifications. But to be eligible for certifications under these programs, you must submit an application for your business to the Small Business Administration or SBA. Hence, if you wish to change any information, you must immediately contact the SBA to revise your application.
Once you accomplish applying for certifications, make sure that you keep all your paperwork and create multiple copies to have them ready whenever a federal agency asks for it. For more information about the certification, you may visit https://www.sba.gov.
How do you get into government contracting?
The process for getting into government contracting may differ for every business, depending on what state the company is located in. Each state has different processes and procedures to become an official government vendor. So, to become part of the government contracting industries, check first with your state, country, and city procurement office.
How do you get a government contract?
I. Research government agencies
Assuming that you aim to work for a particular government agency or department, you will need to do intensive research about them, their budget, how they procure, or how they do business in general.
Researching the particular agency you want to work with will give you enough time to prepare for the bidding. On the other hand, you may disregard this step if you are hoping to work for any agency.
II. Meet size standards
An official government organization called the Small Business Administration sets size standards to every NAICS code given to a business. Sizes standards define the qualifications of companies for a particular contract.
The Code of Federal Regulations (CFR) states all the rules and laws for contractors’ eligibility for the set-aside contracts. So, before you submit your proposal, make sure that you meet the size requirements. To quickly identify your company’s qualification for contracting projects, you may visit the SBA’s Table of size standards and size standards tool.
III. Place your bid
Once you have accomplished filling up every critical and sensitive information needed in the industry, you can bid for any contracts. But before you place your bid, there are a few things to consider:
- Thoroughly study each contract because the federal strictly follow its rules and regulations. If you don’t, you may be disqualified from bidding on federal contracts.
- Avoid legal implications by deeply understanding the contract’s terms and conditions.
If you think that preparing for government contracting, you may hire or outsource government contracting consulting services to help with your bidding process. However, be reminded that their fees can affect your profit.
IV. Receiving an answer
Agencies take a lot of time to choose the proper proposal. Contracting officers usually take thirty to one hundred twenty days to complete the review with all its sensitive information and critical data.
The following are some factors that contracting officers consider before awarding a contract:
- How responsive the business is
- Does a business have enough resources to fulfill the demand
- How responsible is the company
- References to past performance
- Financial information and terms
While the government takes their time to efficiently each submitted proposal, once your bid has been chosen, you will receive personal updates from the agency you will be working with. At the same time, since the solicitation is open to the public, the federal management system publicly announces which bid was awarded.
What is SAM in government contracting?
System for Award Management or SAM is an official government organization that handles government contracting databases. The government department has a website where businesses can:
A. Register to do business with the United States Government.
B. Update, renew, or check the status of registration.
C. Search for contracting records.
D. Access publicly available award data through the data extracts and system accounts.
Registration for the SAM is free of charge, and they also offer assistance to the business in need. But take note that since SAM.gov is a federal public database, you may unexpectedly receive online marketing campaigns. Some even say they are being flooded with emails, phone calls, and texts that are part of the sophisticated campaign design to encourage them to sign up for services even though they don’t need them.