According to the U.S. Government Accountability Office (GAO), the federal government $637 billion in contracts 2021 years.
Small business owners may find it difficult to compete with large companies for government contracts. But government jobs may be more accessible than you think. Of all the money spent on contracts, $149.5 billion awarded to small businesses.
It’s no coincidence. The government actively supports small business owners through the procurement process.
Let’s take a closer look at the benefits of winning government contracts and the steps you can take to make your business more competitive.
Advantages of Government Contracts
When it comes to customers, the federal government is worth pursuing. Here are some of the benefits available to government contractors:
- Competitive Pricing/High Value Contracts
- The longer the contract period, the more stable the income.
- Consistent and on-time payments
- Reduce the risk of customers going out of business
- Designated opportunities for small businesses
Challenges associated with bidding for government contracts
Contracting with the federal government represents a significant and stable income opportunity, but it also comes with more regulatory and compliance work. In addition to the following rules: Code of Federal Regulationseveryone in your business may be required to pass government screening and background checks.
Still, there are many bidders, and SMEs may be at a resource disadvantage. Large companies can have entire departments devoted to quality assurance, compliance, and cybersecurity.
Large companies may also have an advantage when it comes to production resources, making it easier to compete for contracts with high volumes of deliveries.
Still, many small businesses have won government contract awards. Let’s take a look at the steps you can take to find the right federal business opportunity.
How to Win Government Contracts as a Small Business
Mastering the government bidding process as a small business is about paying attention to detail and developing strategies to identify the best opportunities to target.
Here are some steps you can take to increase your chances of winning a government contract:
Get Your Business Profiling Right
Before you start drafting your proposal, you need to make sure your business meets the basic requirements. Here are the tasks you need to complete before starting your application:
- Get the Unique Entity Identifier (UEI). Get your number by registering with the Awards Management System (SAM). SAM.govThis is the official portal for viewing contract data and listings.
- Look up the NAICS code. All businesses have a primary North American Industry Classification System (NAICS) code, but they may have additional classifications if they sell a variety of goods and services. A complete list of NAICS classification descriptions can be found at U.S. Census Bureau website.
- Determine the size of your business. The government has reserved opportunities specifically for small businesses, but they must meet size requirements to qualify.of the government size reference tool Check if you are eligible.
- Stay compliant. Small businesses applying for government contracts must follow the regulations defined in 13CFR125If you are contracting with the Department of Defense (DoD), you must also have a Cybersecurity Maturity Model Certification (CMMC). Visit the Department of Defense website for certification assistance and cybersecurity training tools. project spectrum.
Take advantage of Set-Asides and small business programs
Once you have the basics in place, you can start looking for government contracting opportunities using SAM or databases such as: periscope holdings When bidnet direct America or Merx.com In Canada, we connect you to the most relevant options in the Commonwealth market.
At this point, it may be helpful to consider holdout agreements for small businesses. These are opportunities only available to small businesses.
Additionally, each individual federal agency has its own goals for awarding contracts to different types of small businesses. Collectively, the federal government aims to award the following awards:
- 23% of prime contracts for small businesses
- 10% of main contracts and subcontracts to disadvantaged SMEs
- 5% of main contracts and subcontracts to women-owned SMEs
- 3% of main contracts and subcontracts to HUBZone SMEs
- 3% of main contracts and subcontracts for veteran SMEs with service impairments
Check out SBA’s list Contract support program To find opportunities that fit your business.
Identify the Best Government Agency for You
In some cases, trying everything out and seeing which one works can be a useful approach. Responding to requests for proposals (RFPs) takes a lot of work.
Focus your attention on specific departments instead of spreading your limited resources across multiple trials. Research contracts by sector of government to see which sector best fits your capabilities, products, and services.
Each federal agency has its own small business office to help find and apply for suitable projects.
start with a small contract
Having a good and successful track record helps make your proposal competitive.
In addition to ongoing work for individual clients, you can seek out contracts with state or local government buyers.
Identify and contact potential bidding partners
Another way to improve your offer is to form a joint venture with another small business.
Joint ventures allow companies to join forces and compete for government contracts. Working with another business allows us to combine our resources, expertise and past achievements. Of course, there is also a cost-sharing benefit when a contract is concluded.
To apply as a joint venture, find a partner who has similar expertise or can provide the missing knowledge and capabilities. Once you start another business, you will need to set up your joint venture in writing, register with SAM and get your own UEI.
Great resource for small businesses bidding for government contracts
Finding the right government opportunities can seem like a challenge. Here are some of the best resources you can use to get started.
Government contract data:
Database and Application Portal:
Final Thoughts: How Small Businesses Win Government Contracts
Contracts with the federal government can be a big boon for small businesses. Finding the right opportunity is half the battle when you don’t have the resources of a big company.
Take your time and find the perfect match for you. Then you can focus your efforts on doing your best with compelling suggestions.