The U.S. government purchases an astonishing volume of products and services each year, and luckily for small-business owners, 23 percent of the $500 billion in yearly contracts are legally required to go to small companies. So why don’t all small businesses work to get government contracts? Because it’s not easy. For starters, the government requires small-business owners to step through a rigid qualification process. But once you qualify, you’ll be eligible to take a piece of the almost $125 billion pie. Here’s how the process works.
Determine Whether You’re a Small Business in the Government’s Eyes
The government has strict guidelines about what constitutes a small business, and to further complicate matters, the guidelines vary according to industry. To find out if your firm qualifies as a small business in your industry, you’ll first need to select the primary North American Industry Classification (NAICS) code for your business from this chart, and then find that code in the Table of Small Business Size Standards [PDF], which lists the maximum number of employees or gross profits a business in each industry can have and still be considered a small business by the government. When searching for contracts, you won’t be restricted to your primary NAICS Code, as long as you can fulfill the requirements of the solicitations you’re seeking.
Get a D-U-N-S Number
You must have a Dun & Bradstreet Number for each physical business location you have before you can register to do business with the government. All businesses that have to register with the federal government to receive a contract or grant can obtain the number for free and have it within one day using the D-U-N-S request service.
Register Your Business
Next, you’ll need to create a user account, and register your business in the System for Award Management (SAM). Registration is free, and a new tool allows you to keep track of your status. You can register by following instructions in the SAM User Guide [PDF] or watch the demonstration videos to learn more. SAM also serves as a marketing tool because government agencies and contractors in search of subcontractors use the database to look for businesses based on size, location, experience, ability, and ownership.
In addition, once your business is registered in SAM and you’ve filled out your small business profile, you’ll automatically be entered in the Dynamic Small Business Search (DSBS) database. Contracting officers use the DSBS to search for small businesses to fill their contracting needs.
Learn the Process
It’s a good idea to learn all you can about the process of selling to the government to achieve the greatest success. The Small Business Administration’s Learning Center offers a free three-part on-demand course, Government Contracting 101, that you can take at your own pace.
The SBA’s Government Contracting Classroom also offers other self-paced online courses on a variety of topics. You’ll find courses for women-owned small businesses, veteran-owned small businesses, a course about how to prepare government contact proposals, and more.
Now that you’ve done all of the hard work, it’s time to begin your search for contracts. There are various ways to do this.
- Search SUB-Net. Prime contractors that have large contracts with the government have to provide subcontracting opportunities as part of their contract, and they list those opportunities on SUB-Net. If you are registered to do business with the government, you can answer these solicitations. You should start at the SUB-Net database, then enter the NAICS code you want to find solicitations for.
- Search FedBizOpps. When a federal agency has a contract that is valued over $25,000, they must list it on the Federal Business Opportunities database. Once your business is registered, you can search the opportunities and bid on them.
- Search GSA Schedules. Listed in this database are government-wide long-term contracts for products and services. $50 billion a year in purchases flows through this database. GSA also offers a Vendor Toolbox to help small businesses get acquainted with its process.
Get Help From Those With Experience
Finally, the government provides two mentoring programs to help small businesses that want to do business with the government. The first is the GSA Mentor-Protege Program. Qualified business owners will be paired with experienced owners who can help them maneuver through the system. If a business is socially or economically disadvantaged and qualifies for the SBA’s 8(a) program, it will be paired with a mentor in the SBA’s Mentor-Protege Program who has experience in federal contracting.