Do you want to go into military or government supply and contracting? If YES, here is how to get government contracts for small businesses without knowing any top official.
The United States Government spends billions of dollars every year awarding different types of contracts to meet the needs of the US military and other government agencies. In order to promote and support small businesses, the government ensures that at least 23% of these contracts are awarded to small businesses.
But if there are so much funds available, why then do small businesses not take advantage of them? The reason is quite simple; it is because Government contracts cannot be gotten that easily. The government needs small business owners to go through a process of qualification which is quite rigorous, but once they qualify, they will be allowed to partake in the contract bidding process.
If you run a small-scale business, you can sell your products and services to the US government and earn good money from it. If this is a business opportunity you would like to explore, you should take the following steps to improve your chances of success.
Getting Government Contracts for Small Businesses – A Complete Guide
- Determine If your Business Would be Considered a Small Business in the Eyes of the Government
Government has strict rules as to what is regarded as small business, and to make it more complex, these rules differ based on industries. To know if your organisation would be seen as a small business in your industry, you would first be required to choose the NAICS code of your business and locate the code in the table of small business standards, which enumerate the highest amount of workers or profit a business can make and still be seen as a small business from the perspective of the government.
When looking for contracts, your NAICS code won’t hold you down so far all the needed requirements for the contract you are in search of have been attained by your business.
2. Study and Understand the Process
It is ideal to study and understand all you can about the steps involved in selling to the government so you can be successful. The Small Business Administration’s Learning Center provides a course on government contracting which can be taken at your convenience; it teaches you the process as a whole.
3. Make Research on the Available Opportunities
Locate the opportunities currently available by utilizing code numbers that are significant to you in the search toolbar of the website for federal business opportunities. If you locate anything that seems perfect for you, begin small because a lot of small businesses are also after the same opportunities. Spend your time applying for contracts you have the possibility of winning.
Also, ensure you take the required time to make research on contracts that have already been given out, study the businesses that obtained the contracts so you can have a broader idea of what the government is on the lookout for. Other ways to search for opportunities include;
- Search SUB-Net: contractors that have massive contracts with the government make subcontracting jobs available as a part of their contract and those opportunities are listed here.
- Search FedBizOpps: when a federal agency has a contract that is worth more than $25,000, it must be listed here. You can search for opportunities and bid if your business is registered.
- Search GSA Schedules: here long term contracts for services and products are listed.
4. Find Out If There is a Demand for Your Product or Service
You have to first ascertain that the government has needs for the products you sell or the services you offer. It is also smart for you to find out what prices the other contractors are offering these products or services for, so that you can determine if you have the capacity both in pricing and quality of service delivery. You can use any of these online tools and resources to conduct an extensive research on demand and pricing:
- Contract-Awarded Labor Category [CALC]
- Contract Opportunity Finder
- Forecast of Contracting Opportunities Tool
5. Find out the Legal Responsibilities and Laws for Federal Contractors
You would be working with the government here, and even though it is a very lucrative opportunity, the rules can be very strict too. There are a lot of rules and regulations governing government contracting in the USA such as the Federal Acquisition Regulation [FAR]. You can learn more about your duties and responsibilities as a contractor on the SBA website.
6. Get the Required Documents
There are a number of documents that you would be required to possess before you can be allowed to register and bid for government contracts in the US:
- Register with the System of Award Management. SAM is the main database of Federal Government contractors in the US and you have to register on this platform to qualify as a government contractor.
- Get a DUNS Number. The DUNS number is a unique 9-digit code used to identify the physical location of your business. You can get it by visiting the DUNS request service center.
- Get Your NAICS and SIC Codes. The North American Industry Classification System [NAICS] code is used to classify each contractor’s business according to the industry, sector, and county your business belongs. You also need to figure out your Standard Industrial Classification [SIC] code, Federal Supply Classification Codes, and Product Service Codes.
- Get Your Federal Tax Identification Number and Employer Identification Number [EIN].
- Obtain Open Ratings Past Performance Evaluation: Open Ratings is an evaluation of your business credibility based on your past operations.
7. Get Certified in a Specialized Category If your Business Fits the Bill
It is required by government agencies to keep over 20 percent of their budget for small businesses owned by veterans, women as well as for businesses situated in areas that are economically depressed which are recognized as the HUBZones. If your business falls under any of these categories, you can get certification and stand a better chance of getting contracts.
8. Think about Subcontracting First
If you are not finding it easy to get government contracts or you are not quite knowledgeable on how to go about the process, you may want to think about subcontracting your services first to groups that work regularly with the government. This would aid you in creating connections that would be valuable in the long run when you make the decision to chase your own contracts.
9. Attend Seminars and Conferences to Link up with Agency Officials
Attending seminars and conferences will provide you with a better understanding of how the contracting process of the government is done. It also allows you relate with agency officials on a personal level.
10. Patience is key
The contracting process of government can be quite slow and sometimes small businesses may have to wait for a year or more before they can attain the final approval for a contract. With these kinds of delays, you are less likely to get a government contract with ease. But if you can persevere through the difficulties, government contracts can be beneficial in the long run.
11. Get Assistance from Those with Experience
Lastly, government offers mentoring programs to assist small businesses that plan to carry out business with the government. One is the GSA Mentor-Protégé Program where business owners that are qualified will be linked with other owners with experience who can assist them go around the system.
12. Start Bidding for Your Own Contracts
Once you get all these documents and legal requirements filled, you are ready to start taking up contracting jobs with the government but it doesn’t just happen automatically, you have to bid for, and win contracts. There are usually hundreds of other contractors to compete with so you have to be fast, smart and make sure your own bid stands out.
i. Search for Suitable Contracts-: You need to continue to look out for available contracting jobs that you qualify for. You can find a lot of them through Contracting Opportunity Finder and FedBizOpps. You can register on both platforms so that you would be able to receive instant notifications as soon as a job that suits your qualification pops up.
There are also some private agencies that specialize in matching contractors to available contracts that they can bid for, you can find such agencies and use their services if you don’t mind spending a little cash.
ii. Read Contract Details-: No matter how many contracts you have been awarded and have executed in the past, never assume that the requirements for each new contract are the same as the previous one. There are usually some differences and you may not know this unless you actually take out time to read and understand the specifics of each contract.
iii. Differentiate between Pre-solicitation and Solicitation: Pre-solicitation is simply a request for information and you are not expected to make an offer just yet. Make sure you read each contract details and understand in order to determine if you are expected to simply provide information, or go right ahead to make an offer.
iv. Talk to the Procurement Center Representative: If you ever get confused about anything, don’t guess; simply ask for clarification from the procurement center representative who would be able to break it down for you.
v. Make a Competitive Offer: Pricing is very important here. You have to give your most competitive price for every bid you submit because there are usually a lot of competitions for these jobs. You don’t necessarily have to offer the cheapest rates but if your price would be a little bit higher than those of other applicants, make sure you emphasize the reasons behind this steep pricing especially if you are offering a higher quality product or extra perks.
Don’t forget to include all supporting documents when submitting your bid and do crosscheck a few times to be sure you are not leaving out anything important.
13. Wait for Reviews and Offers: After you submit your bid, it would usually take the government between 30 and 120 days to completely review your application. During this period, you should try to be alert as they may require extra documentations and further clarifications from you.
Some of the factors that are usually considered before contracts are awarded include the pricing and terms of the proposal, past performance references, and how technically acceptable the proposal is. If your proposal is approved, you would get a notification from the government informing you that you have been awarded the contract or requesting to schedule a meeting.
Lastly, if you are applying for contracts as a small business, you have to be sure that your business can be legally classified as a small business within your industry especially with regards to size.