If you`re interested in competing for some of these often lucrative contracts, follow these steps to prepare your business for a government contract. Yes, this has already been mentioned, but we cannot underestimate its importance. That`s 23 percent of the $500 billion the U.S. government spends each year on federal contracts. And realizing that agencies need to meet that 23% goal can give you a big head start. Through the Federal Procurement Data System, you can see which government agencies are not yet meeting this target, giving you a much better chance of getting a contract if you bid. For government contracts, you will be asked to submit your NAICS (North American Industry Classification System) code as part of your application. This code is used by the federal government to classify businesses for statistical purposes related to the U.S. business economy. There really is no good reason not to look for government contracts.

Each agency publishes a supply forecast that includes contract opportunities for disadvantaged small businesses. To qualify for government contracts as a small business, you must meet the size standards of the Small Business Administration. Typically, a small (non-manufacturing) business earns less than $7.5 million per year and has fewer than 500 employees (manufacturing). To get started, your company needs to register as a government vendor in the SAM system. While your SAM profile must be updated at least once a year to stay active, companies that commit to winning government contracts must update and refine their SAM profile at least quarterly, if not monthly or longer. For small businesses with more general offerings that aren`t sure about their ideal government agency, subscribing to a job matching service can be a useful way to find government contracts. Most local technical support supply centers offer free quotes, but you can also enjoy private and more personalized services at a reasonable cost. Working with a bid matching service also has the added benefit of connecting you with experienced procurement mentors who can guide you through the bidding and procurement process.

Meredith launched the Fundera Ledger in 2014. She has specialized in financial advice for small business owners for nearly a decade. Meredith is often sought after for her expertise in lending and financial management for small businesses. Contact the Small Business Administration (SBA) for advice on how to identify your industry code, keeping in mind that if your business operates in multiple industries or sectors, you may need to report multiple NAICS codes. If you`re not sure if the procurement is right for your business, or want to know more before submitting a bid, consider the option of subcontracting. Many large companies are looking for small business partners so they can bid on opportunities to promote small businesses. Your partnership is valuable to these prime contractors. Similarly, you can familiarize yourself with an established contractor who has the systems and relationships in place. Yet despite these opportunities, even small business owners who are aware of government procurement opportunities find various reasons to avoid seeking government contracts – not least because they find the process intimidating. The U.S.

government is the world`s largest buyer of goods and services, awarding hundreds of billions of dollars in federal contracts each year. Contrary to popular belief, these contracts often go to small businesses. Not only is the government required by law to review small business bids, but it has also set a target of awarding at least 23 per cent of all federal contracts to small businesses. If you`re in a very specific industry or know exactly which government agency your small business can work best with, you can market your business directly to target agencies or contractors. To do this, you should use SAM.gov and SUB-Net to identify existing procurement needs. Then you can tell these agencies directly why your company is the right choice to fill them. You might assume that determining the size of your business doesn`t require much thought. However, to qualify for small business government contracts, you must qualify according to SBA size standards.

To help you easily answer this question, the SBA offers a Size Standards tool that uses your NAICS number as well as basic information about your business to determine if it qualifies as an SBA-designated small business. Everything from military vehicles and equipment to paper clips and Post-it notes is regularly outsourced by the federal government to companies of all sizes. If you sell to businesses or nonprofits, chances are you can also market your services to government agencies. The available outsourcing options can be found via the SBA`s searchable SUB-Net database. If you`re working for a government agency for the first time and aren`t familiar with the suggestion process, this is a great place to start. Essentially, if you ignore government contracts, you`re sacrificing the biggest path for new customers and revenue in the United States. Here are the top three types of requests you`re most likely to see on SAM.gov or any other list of government contract opportunities: As you can imagine, setting your contract pricing is critical to your ability to win profitable government contracts. You need to consider your costs both when bidding and executing the contract, while leaving enough room for day-to-day overhead. Of the roughly $500 billion the U.S. government spends each year on federal contracts, its goal is also to allocate 23 percent of those funds to small businesses. [2] Well, that may not sound like a lot – but in what other bidding scenarios do you have the guarantee that the prospect will choose a small business like yours over a much larger one? This is virtually unknown in the private sector. While the SAM.gov database handles direct contracts with government agencies – called framework contracts in government terms – there is another form of government contract that small businesses can explore: subcontracting.

The General Services Administration (GSA) has found that companies with the following assets tend to have a higher chance of winning a government contract: While you likely have experience creating proposals and tasks for potential private sector clients, there is little that can prepare you for the unique process of preparing a government contract proposal. In fact, filling out a quote or proposal for a government agency may be more like filling out your corporate taxes or a stack of forms for the DMV. Now that you`re convinced of the value of government contracts for small businesses, let`s talk about how you can start getting started with procurement. As you may have assumed, there are some additional steps required to qualify as a U.S. government contract supplier, including enrollment in what is known as the Attribution Management System. That is, the rewards far outweigh the initial investment. And once your business is established and you have your first government contract, it`s all about rinsing and repeating as you reap the benefits. Keep in mind that even if you reach out to government agencies, the decision-makers in those agencies are real people.