Cielo Cinco
The U.S. government and its federal contractors have worked hand-in-hand since time immemorial. Through their joint efforts that are mediated by government contracts, the nation’s cyber and on-ground defenses were fortified, infrastructures that made every American’s life easier were built, and recently, helped America recover from the devastating effects of the COVID-19 pandemic.
The skills and expertise of the federal contractors help uplift and improve America’s way of life. And in turn, the government contracting industry opens up lucrative growth opportunities for every private-sector enterprise that wishes to work with the government. And if you want to join this thriving industry, here are the things you need to know before entering this field.
Table of Contents
What is a government contractor?
A government contractor is a business or organization, may they be for-profit or non-profit, that sells its goods or services to the federal government.
Is it worth it to become a government contractor?
To know whether being a government contractor is a worthy endeavor, you have to look at your business goals and see whether this path aligns with them.
It is undeniable that entering the government contracting industry takes a lot of time and money. To thrive in a hyper-competitive environment, you have to know what you do, how you can stand above the competition, and how you can deliver the best service there is to seal a contract deal.
Choosing to become a government contractor requires you to take a huge risk. But, risking something as big as this means that you are also setting yourself up for the opportunity to win big.
1. Government contracting is a lucrative business opportunity
The federal government earmarks billions of dollars worth of budget for government contracts. In the fiscal year 2020, the government has awarded more than $682 billion worth of federal contracts—a significant increase from 2019’s figure. Despite the devastating effects of the COVID-19 pandemic on the economy, there was still an increase in the value of government contracts awarded.
As you can see, the U.S. government is a prime client—they give huge compensations for every awarded project, they open up more business opportunities to enterprises no matter their business size, and business leaders are guaranteed that they will be remunerated appropriately on time.
2. Government contracts last for a long time
Project-based work means that it is not permanent. But luckily, the length of government contracts can least from a year to three years. If you have displayed satisfactory work—or even exceeded the expectations of the federal agency you are currently engaged in, they can choose to extend your contract period. If there isn’t work left to do in the contract, then the good impression you have left on them will improve your chances of winning another contract with them in the future.
3. Never miss a payday
As one of the biggest clients any company would have the fortune to do business with, the federal government always adheres to the payment terms stated in the contract. The payment scheme and schedule may differ depending on the nature of the contract. So, carefully scrutinize every clause of the contract so both parties can hold each other accountable.
How do you get a government contract?
Countless businesses have been deterred from entering into the government contracting industry due to the convoluted application processes they have to submit themselves into.
Fortunately, we are here to help you out! To guide you toward the starting line, here is an overview of the requirements and other things you should do to become a fully recognized government contractor.
1. Ensure that your business adheres to the federal laws and regulations
It is the legal responsibility of every business owner to acquire the necessary permits and licenses to operate. And if you plan to become a government contractor, then best believe that the federal administration will scrutinize every document you have to prove that you are a legitimate and law-abiding government contracting firm.
If you are a small business owner, the SBA lays out the basics for properly registering your business.
2. Perform market research
Entering the government contracting industry requires you to sacrifice time and resources. So to ensure that the resources you have risked will bear fruit in the long run, you have to perform federal market research. This will help you gauge whether federal agencies are currently in need of your goods and services. Additionally, this will give you a clearer picture of the market’s trends and possible competitors.
3. Maximize every learning resource available
It is undeniable how confusing this whole journey can get. And that is why there is an abundance of learning opportunities available online and even offline.
Procurement Technical Assistance Centers (PTACs) are learning centers found locally to assist small businesses that desire to enter the industry. Here are some of the ways PTACs can help you out:
- Evaluate your business’s readiness to join the government contracting industry
- Guide you through the registration process to become a federal contractor
- Assess your eligibility to apply for small business certifications and assistance programs
- Provide you with reference to past contract opportunities that can help you in bidding for future federal contracts
4. Familiarize yourself with the Federal Acquisition Regulation
Also known as FAR, this is the primary regulation that every federal agency follows when it comes to acquiring goods and services using their allotted budget from the government. So as a government contractor, it is your responsibility to become well-versed in the federal rules and regulations that bind the industry to avoid any unwanted entanglement.
On top of FAR, you should also read up on the individual publications of government agencies to know their specific acquisition rules and regulations.
5. Acquire the necessary government contracting requirements
DUNS Number
These 9-digit unique identifier codes are obtainable by requesting yours for free at the Dun & Bradstreet (D&B) website. Usually, you will only need to wait one business day before your DUNS Number will be sent to you via your registered email.
Your DUNS Number represents critical information about your business, such as financial credit and financial capability—and is recognized worldwide. Read more about it in this detailed guide by D&B.
NAICS Codes
To help federal agencies identify the nature and industry of your business, they refer to your company’s NAICS codes. This allows you to get more exposed to contracting officers looking for contractors with the same skillsets as yours.
You can acquire your NAICS code through its self-service portal. From the extensive list of NAICS codes on the website, select which codes best represent the goods and services you currently offer. You can have more than one NAICS code if your business offerings fall under different categories.
CAGE / NCAGE Codes
CAGE and NCAGE codes are unique business identifiers assigned by the federal government—usually by defense agencies. Both codes are used by government contractors who sell their goods and services to the government. The only difference is that CAGE codes are given to businesses built within the U.S. and its territories. In contrast, NCAGE codes are assigned to companies whose physical addresses are found outside the country and its territories.
The CAGE Code, also known as the Commercial and Government Entity Code, is awarded automatically after you finish registering your business at SAM.gov.
In contrast, the NCAGE Code, or NATO Commercial and Government Entity Code, should be requested before the SAM.gov application. Here is the website where you can ask for your NCAGE Code.
6. Complete your registration at SAM.gov
The System for Award Management (SAM.gov) is the one-stop portal for every government contractor. Registration to this website means you are now eligible to start bidding for government contracts.
Aside from the previously mentioned requirements, you also have to acquire your Employer Identification Number (EIN) and arrange your banking and financial information for your Electronic Funds Transfer (EFT).
7. Keep tabs on government contracting opportunity websites
If you wish to be a prime contractor, you can find contracting opportunities are posted at SAM.gov, the same website where every government contractor must register to become fully recognized in the industry.
On the other hand, if you wish to be a subcontractor, you can subcontracting opportunities in these websites:
- Small Business Administration (SBA) – Subcontracting Network (SubNet)
- Small Business Administration (SBA) – Directory of federal government prime contractors with subcontracting plans
- General Services Administration (GSA) – Subcontracting Directory for Small Businesses
What are the easiest government contracts to get?
There are several types of government contracts issued by the federal government. And with every government contracting opportunity available comes its own set of requirements and obstacles.
In truth, there is no “easy” contract to win. The government contracting industry is riddled with complicated processes and unique challenges. But, there are federal contracts that are made more accessible to small businesses and enterprises that belong to certain socio-economic classes.
Set-aside Contracts
Set-aside contracts, or set-asides, are federal contracts exclusive to qualified small businesses only. Given how highly competitive the industry is, the federal government has devised a plan to level the playing field for small businesses, especially those burdened with socio-economic challenges.
Federal contracts valued at $3,000 – $150,000 are automatically reserved for small business government contractors. The competition in this range is much thinner and more accessible to small business owners.
Before you can compete for set-asides, you have to satisfy these two conditions: (1) be a duly registered government contracting business at SAM.gov, and you should also (2) qualify for the assistance programs under the Small Business Administration.
GSA Schedule
When the federal government needs to buy a bulk of resources, whether they may be paperclips or toiletries, they use blanket acquisition contracts such as GSA Schedules to get them.
GSA Schedule, or Multiple Award Schedule (MAS), are long-term government-wide contracts that let the federal government acquire commercial products and services at a fair price. Through the mediation of the General Services Administration, the buying process is made more efficient and cost-effective.
If you are interested in selling your goods and services through a Schedule, check out this primer from the GSA website.
Why should you look for government contracting partners?
As you can see, it is truly undeniable that thriving in the government contracting industry is challenging, especially when you are alone. And that is why forging quality connections with key industry movers, professionals, and fellow like-minded government contractors can make or break your success in the federal contracting industry.
Receive quality business leads
The federal contracting industry is a hyper-competitive business field. With contracting giants leading the industry almost every year, finding your place can be pretty taxing—but not impossible.
Skills and reputation can set you apart from the competition. And other than consistently displaying excellence in your business, having government partners and connections can link you to government contracting opportunities. If you maintain an excellent rapport with your partners, they will not only refer you to prospective clients, but they will also help establish your reputation.
Exchange valuable insights with one another
When you are trying to build your network of federal contracting partners and connections, you should seek those who will further enrich your mind.
In this industry, it pays to be always at the forefront of innovation and development since the government always prefers to go to contractors who can offer them the best service at a cost-effective price. And that is why exposing yourself to a diverse group of people can freshen up your perspective and improve your vision for your business.
Meet a mentor
There is only so much you can do alone, especially when trying to navigate through all of government contracting’s complicated processes—from application to bidding. And that is why having a seasoned professional mentor you through all of this entangled web of rules and regulations can boost your business’s growth.
How can you seal partnerships with other government contractors?
Set your goals
You should keep in mind that networking is an investment. It is not an endeavor that bears fruit overnight. It is something that should be patiently cultivated before you can reap the benefits of your efforts. And with this view in mind, then you should lay down your goals to ensure that none of your efforts will go to waste.
Do you want to meet more like-minded people, or do you wish to diversify your network? Are you looking to meet with potential government contractors who might be willing to partner with you for future contracts, or do you want to meet key investors who might help grow your business? Those are just some questions you should ask yourself when setting networking goals.
Strategically network with your connections
The practice of networking may be common in the industry, but there are still business leaders who frown upon it, degrading it into mere “politics.” Although there will be individuals who wish to exploit the benefits of networking for their gain, it shouldn’t deter you from doing so. And that is because networking is not simply a game of dirty politics, but rather, networking is the art of making meaningful and valuable exchanges with others.
According to this study, networking strategically was instrumental in the success of the managers who participated in their research. It was stated that networking deepened their insights regarding the internal workings of their organizations and broadened their knowledge about the latest trends in their industry. And since these managers have demonstrated rapport with their network, they have managed to strengthen their business internally and externally.
Be proactive
As they say: the early bird catches the worm. Always be receptive to opportunities to connect with others, no matter the time and place. But to help you home in on the best places where you can seek to communicate with the relevant people, here are some of the things that you can do:
Attend networking events
Ever since the event management industry has shifted into a hybrid setup, more and more government contracting events have become more accessible to anyone. And since more people can join, then that means that you can connect with more industry professionals as well.
Whether it be an on-ground event or a digital conference, you have to do your best to make the most out of each engagement you will attend.
Build your online presence
Thankfully, making your name known to your target government contracting industry has become much easier thanks to technology. With the rise of professional social networking platforms such as LinkedIn, you now have the means to share your thoughts, connect with industry leaders and engage with them!
Humanize your approach
Every connection starts with a conversation. But, a conversation will only bear meaning if you leave a lasting impression.
If you wish to include people in your network, you should never settle for stale conversations. But, you don’t have to resort to gimmicks and overboard antics. The best way to avoid tanking down a conversation is pretty simple—find something you are both interested in. Once you have found common ground with them, the rest will follow.
Be genuine
And, of course, the most important lesson of all is to be genuine in your attempt to connect with them. Remember that you are not trying to engage with a robot but rather an actual human being who may be instrumental in your growth as a government contractor. Sometimes, people can view relationships forged through networking as purely transactional so try to see beyond these preconceived boundaries and be genuine.
