As the world’s largest customer – purchasing more than $225 billion in goods and services annually – the United States government is a routine business partner with small businesses. If you can think of a product or service, it is highly likely that the federal government is buying. Small and large quantities are purchased each day. Therefore, whatever product or service your company sells, there is a good chance that you can sell it to the government. Of course, you must know the rules of play and follow them with precision.
Not only the federal government, but state and local governmental agencies are also prime customers for small businesses. There are opportunities to sell billions of dollars of products and services. For many government agencies, there is a percentage requirement set aside to procure some items from small businesses. Once your company is classified properly, you can begin the extended process to register with the government. The following information will help you certify your business and begin bidding on government contracts.
Competing against large corporations for government business can make some small businesses feel they are at a disadvantage. Large corporations have more resources at their disposal to bid on different projects while managing daily business activities. In government contracting, however, bigger is not always better.
The federal government sets aside opportunities specifically for small businesses. Those businesses headed by women, disabled veterans, socially or economically disadvantaged groups can compete for government contracts. Additionally, businesses located in geographic areas that the government deems underprivileged are also given special consideration.
In addition, the government also aims to set aside nearly one-fourth of contracts for small business owners. While this is the goal, – and not a reality – it does offer a glimmer of hope that you can get business from the government. By law, at least 23 percent of prime contract dollars under federal control should be awarded to small businesses.
Securing business from the government is a multistep process that requires persistence and attention to detail. Generally, if you want your business to provide goods and/or services to the federal government, you must:
The fine print of these general steps registering with Federal Business Opportunities, more commonly known as FedBizOpps.com, which is a comprehensive database of major solicitations, subcontracts and contract awards.
You want to familiarize yourself with federal contracting rules, which are very different from commercial contracts. For instance, you might be limited on how much you can subcontract if you receive a contract that is from the set aside category. The types of products you provide and your interaction with other firms may also be limited. The Federal Acquisition Regulations details what is acceptable.
Research government agencies to identify which ones want to buy the products or services that your small business offers. Each agency may also list acquisition forecasts on individual websites. With the knowledge of rules and opportunities, you can begin the process of bidding for lucrative contracts with the government.
Millions of businesses across every industry operate around the world, which makes it imperative that you have a unique way to distinguish your business. You can achieve this by having a number assigned by Dun & Bradstreet, a company providing credit and corporate information on businesses. Much like a social security number, the D-U-N-S number is essential even if you are not interested in bidding on government proposals. However, you cannot register or submit offers on government contracts without one.
The D-U-N-S number is a nine digit number assigned to your business for free. Government contracting sites maintain a database of businesses with this number. Typically, this makes it easier to identify the businesses that qualify for specific contracts. If you do not already have a D-U-N-S number, you can use the free Request Service to register for one.
The next step in bidding for government contracts is to register with the System for Award Management. Known as SAM, this free government website replaces the Central Contractor Registration system and consolidates several systems related to contracting. SAM is the primary database for eligible companies that do business with the federal government.
Registering on SAM is a way to self-certify that your small business is qualified to participate in government bids. According the Federal Acquisitions Regulations, all prospective contractors must register with SAM before contracts are awarded. This applies to contracts with basic order agreements or blanket purchase agreements.
By using SAM, you can register the size and economic status of your company. At the same time, you can complete the certifications and solicitation clauses that are necessary. This confirms with the government that information about your company is correct.
In addition to registration and certification requirements, SAM also acts as a marketing tool for your business. Government agencies and federal contractors can search the database based on your company’s location, size, and product and service offerings. Agencies and contractors who search the database can also find businesses that are located in underutilized business zones. Socially and economically disadvantaged businesses that are part of set aside contracts are also easier to identify in SAM.
You may also need a North American Industry Classification System code for various purposes such as contracting, tax and administrative purposes. This code is used to classify the industry, economic sector and country of where your business is located. For federal contracting, you will need to identify all of the industries that are applicable to your business in SAM.
Winning a million dollar government contract can do wonders for your business. However, do not overlook smaller product purchases that the government solicits very often. Most agencies may never offer a $1 million contract; they will, however, make micro purchases of $5,000 or less. Over time, this can do significant wonders to your bottom line. Make sure that you do not limit your business to big dollar opportunities, but rather, indicate that you are also interested in small purchases.
Put a brochure of your company’s products and/or services in the hands of every procurement officer that you can find. If an agency has a small business representative, this puts you even closer to winning a contract. Call each agency that purchases your product or service to get the name of the representative.
Stay connected to the government database that houses every contract that goes out for bids. Every contract connected with the federal government should be in the FedBizOpps database. In addition to contracts that you can bid for directly, the database may also have contracts from large corporations looking for federal subcontractors. As long as they want a business that sells your products or services, you can submit a proposal for the opportunity.
A customer that spends $225 billion each year on business contracting services may seem like a massive, impersonal customer. Nevertheless, building relationships within different agencies is just as important as you would for private business customers. Leaning too much on databases and cold calls will only carry you so far; you must cultivate lasting relationships with humans who will actually approve – or decline – your proposal.
This does not eliminate the requirements for eligibility, but networking with government agencies and large contractors can make a difference. Select two or three agencies that use your products or services. Attend events hosted by the agencies so you can learn more about the types of opportunities they want. The same applies to private sector companies that look for subcontractors. Eventually, you will meet the decision makers.
Whether you provide products, services or both, getting business from the federal government has the potential to boost growth and recognition for your company. The purpose of setting a percentage of contracts aside by the government is designed to support the growth of small businesses. You can take advantage of these targeted approaches by following the process of securing government contracts.
Patience is a virtue when you want to do business with the federal government. While contracts can be financially rewarding, the application and approval process can be long and arduous. However, you must follow the government agency’s guidelines systematically.
Monitor your applications for contracts on the Federal Business Opportunities website and connect with various government resources. Take advantage of an advocate for small businesses through the Office of Small and Disadvantaged Businesses Utilization. Every federal agency has an OSDBU office that can assist you with identifying and applying for various contract solicitations.
Another resource to use is the Procurement Technical Assistance Centers for local assistance on applying for government contracts. A representative at the center provides one-on-one guidance to help you overcome the challenges of pursuing government contracts. You receive technical assistance on registering with the proper agencies to participate in the government marketplace. The representative will also help you determine if your company is eligible for different small business certifications.
In essence, you have a number of resources that can ensure a successful application process. Make sure that all required information is submitted with your bid. Most problems are caused by omitting necessary information or providing unwanted information. Avoid automatic disqualification by following proposal guidelines and soliciting direction.