February 28, 2019 | By Peyton Sawyer
Every year, the US government spends an astonishing $500 billion on purchasing products and services. From that, 23% (almost $125 billion in contracts) is legally required to go to small businesses. But not without adhering to a difficult qualification process.
As a small business owner, you may not think the industry you work in would qualify for a government contract, but you may be surprised! Government contracts for small businesses are awarded to companies that range from one end of the spectrum to the other in all sorts of industries and specializations.
Still think your business would not qualify? In addition to allocating 23% of those contracts to small business owners, the government also provides work contracts to small businesses that would otherwise be at a disadvantage, like those owned by disabled veterans, minorities, and women. But how do you know if you qualify? Find out more about the process and what would make your business the best candidate possible!
Determining If Your Business Qualifies As A Small Business
The government has strict guidelines about what actually qualifies as a small business. And to make it even harder, those guidelines vary depending on the industry your business operates in. To find out if the government considers your business to be a small business, you will need to select a North American Industry Classification Code (NAICS) and find the code you selected in the Table of Small Business Size Standards chart. That chart will list by industry the maximum amount of employees a business can have or gross profit a business can make to still be considered a small business.
Registering Your Business For A Government Contract
When registering your small business for a government contract, you will be required to set up a user account. To do so, you will need a D-U-N-S number for each business location you are registering. By simply using the D-U-N-S request service, you can receive the 9 digit identification number for free within one day of submitting the request.
Once you have be provided the D-U-N-S number, you can begin registration in the System for Award Management (SAM). This user tool is free of charge and will allow you to track the status of your account. Following the SAM user guide will help to make the registration process easier. If additional assistance is required, there are also demonstration videos that can provide further instruction.
After completing the registration process, which includes receiving a D-U-N-S number, creating a user profile, and entering your business information in SAM, you will automatically be listed in the Dynamic Small Business Search (DSBS) database. Federal government contracting officers use this database to search small businesses that can fill their contracting needs.
Understanding the Process
Understanding the process of obtaining a government contract, will help your business to achieve success. That is why the Small Business Administration’s Learning Center offers a free course in Government Contracting 101, as well as an online course in Government Contracting Classroom. Take these informational courses at your own pace.
If you would like to get advice from those who are experienced in government contracts, the government has provided two mentoring programs to assist you in the process. The first program is the GSA Mentor-Protégé Program. With this program, qualified business owners are paired with experienced business owners who can help to guide them through the system. The second program, is offered to business owners who may be at a social or economical disadvantages. This is called the SBA 8(a) program. Owners who qualify for this program, are paired with a mentor in the SBA Mentor-Protégé Program that has experience in federal contracting.
After you have completed the registration process to be considered for a government contract, it's time to begin your search. There are many ways to search for a contract.
- Searching SUB-Net will assist in finding a sub-contract. Prime contractors that have a large government contract are required to provide subcontracting opportunities for small business owners. You will find a listing of those subcontracting opportunities on SUB-Net. To view solicitations listed on SUB-Net, simply enter your NAICS code to get started.
- Searching FedBizOpps is another option to use when looking for a government contract. If a federal agency has a contract valued over $25,000 they are required to list the contract on the Federal Business Opportunities database. If you find a contract that your business can fulfill, simply place a bid on that contract.
- Searching GSA Schedules can help you to find long-term government contracts that are open for biding. If you need assistance with the process, GSA offers a Vendor Toolbox for small business owners like you.
Writing A Proposal
If you find a contract in the federal database that matches the services or products that you can provide, the next step is to submit a proposal for the contract. can be daunting, but necessary to work with the government. Make sure to include specific details that fulfill the contract requests and format
Related:Still need help getting the funding your company needs when you need it? He's some jumbo funding and merchant cash advance information that could help you make the right decision about your small business funding needs!
The procurement process can be quite complex. If you receive a request for a proposal, be sure to seek the advice of someone who has experience, before you respond. If you are not sure how to go about finding an experienced business owner, then there are several workshops, free and low cost that can assist in increasing your knowledge. Finding a workshop to help with the federal process is easy with the help of the Small Business Administration, SCORE, and the local Procurement Technical Assistance Centers that are available.
Providing the services or products that were listed in the proposal is no easy task, especially if there are multiple agencies involved in the contract. Following the rules and regulations that the government has set forth can be quite different than what you are used to. As a business owner, you may be accustom to selling, billing and getting paid, but with the government, the order may be much larger, making it harder to fill, and the payment process more involved. With the government, you will be required to enter order information into a system, that requires a perfect match before payment can be made. Submission is often rejected and needs to be resubmitted.
Even though fulfilling contracts can be complicated, assisting the government in its functionality can be quite rewarding.