How to become a government contractor
When it comes to becoming a government contractor or subcontractor, you need to know a few key things to be successful. First, you need to understand how the government contracting process works and what types of contracts are available. Second, you need to find out where to look for government contracts you may be interested in bidding on.
The government contracting process is a competitive process whereby the government solicits bids from contractors interested in performing the work required by the contract. The government then awards the contract to the contractor who offers the best value for performing the work.
Types of government contracts
There are two main types of government contracts: fixed-price and cost-reimbursement. Fixed-price contracts are the most common type of contract awarded by the government. With this type of contract, the contractor agrees to perform the work required by the contract for a fixed price. The government then pays the contractor that price, regardless of the actual cost of performing the work. Cost-reimbursement contracts are less common but do occasionally occur. With this type of contract, the contractor agrees to reimbursement from the government for the actual costs of performing the work required by the contract, up to a maximum price agreed upon in advance.
How to find government contracts
There are several ways to find government contracts you may be interested in bidding on. The best way to find government contracts is to use one of many databases that allow you to find and bid on federal contracts.
Here are some of the key ways to enter the world of government contracting:
Dynamic Small Business Search
The Dynamic Small Business Search (DSBS) is a searchable database of small businesses interested in doing business with the federal government. You can use the DSBS to find small companies registered with the government and that have expressed an interest in bidding on government contracts. To register on this database, register on the System for Award Management (SAM) site, and be sure to complete your business profile in full.
SAM.gov is the government gateway that all federal agencies must use to advertise contracts that exceed $25,000. For more minor contracts, you may be approached via DSBS, but for contracts that meet this threshold, you will be expected to bid for the contract. The great thing about this site is that you can set up email alerts for contract opportunities that meet your business’s criteria, so you don’t miss any opportunities.
Government Services Administration
If you seek to sell to the government rather than provide services, you should register with the General Services Administration (GSA). The GSA is the government agency responsible for procuring goods for the federal government. You can register as a GSA schedule holder, which will give you the ability to sell your goods and services to the government at pre-negotiated prices.
If you are interested in becoming a government contractor, the best place to start is by registering on SAM.gov and setting up email alerts for contract opportunities that meet your business’s criteria.
Some contracts are too big for one entity to necessarily manage. Companies can bid for contracts but take on subcontractors to assist with delivering the required goods or services. If this interests you, seek out a company that is already a government contractor and inquire about opportunities to work together on future projects. To seek a subcontracting role, check out SubNet, where contractors will seek out smaller businesses to aid them in fulfilling their obligations.
Additionally, the GSA publishes a Subcontracting Directory, which contains a list of companies that have been awarded federal contracts. This is a great way to find out who the major players are in the government contracting space.
The Federal Procurement Data System
The Federal Procurement Data System (FPDS) is a database of information on federal contracts. This database can be used to determine who the major contractors are, what types of goods and services are being procured, and how much money is being spent. The FPDS is a great way to get an overview of the government contracting landscape.
Who can become a government contractor?
The US government awards contracts to businesses of all sizes. To become a government contractor, you must register your business with SAM.gov and have a Unique Entity ID number, which has recently replaced the more widely known DUNS number. You will also need to have a business bank account and be able to accept payments via electronic funds transfer (EFT).
For any small business to serve as a government contractor, the business owner must clearly understand the Federal Acquisition Regulations (FAR). FAR is a set of regulations that govern how the federal government purchases goods and services.
In addition to registering your business, you must match a North American Industry Classification System (NAICS) code to all your goods or services. While your business will have a primary NAICS code, each type of goods or service will need to be matched to its NAICS code, as listed on the US Census Bureau website.
Opportunities for diverse businesses
The federal government has a commitment to awarding a certain percentage of contracts to small businesses. In addition, the government attempts to ensure that businesses owned by women, minorities, and veterans are given opportunities to participate in the contracting process. There are many programs and initiatives to help these businesses get their start in government contracting. The 8(a) Business Development program sets out the government’s goals for awarding contracts to small and disadvantaged businesses.
- These include:
- Women-owned businesses
- Native American-owned businesses
- Veteran-owned businesses
- LGBT-owned businesses
- Rural businesses
- Minority-owned businesses
The Small Business Administration (SBA) is a good resource for information on these programs. The SBA also offers support services to small businesses interested in government contracting, such as counseling and training.
Meet business size standards
Your business must meet specific size standards to be eligible for government contracts. These standards are based on the number of employees or your business’s revenue annually. The SBA has a handy tool that allows you to input your NAICS code and determine the size standards for that particular industry.
It is important to note that these standards are not static and can change over time. For example, the size standards for veteran-owned businesses have increased in recent years. As a result, more companies are now eligible to participate in government contracting.
As a government contractor, you will be required to comply with a number of regulations. These include FAR and the Davis-Bacon Act, and the Service Contract Act. The FAR requires that contractors maintain accurate records and submit timely reports. The Davis-Bacon Act sets forth wage requirements for construction contracts, while the Service Contract Act establishes wage requirements for service contracts.
Failure to comply with these regulations can result in penalties, including the loss of your government contracting eligibility. It is essential to familiarize yourself with these regulations and make sure that you are complying at all times.
Government contracts are an excellent opportunity to grow your business, but it is necessary to step through a lot of red tape to achieve the stability that a government contract can provide. By following the steps outlined above, you can increase your chances of success in this competitive arena.
Promoting yourself to the government
Successfully winning a contract takes more than just being the cheapest or the best known. The government wants to see that you can be trusted to deliver on your promises.
There are many ways to promote your business to the government and increase your chances of being awarded a contract.
You can search federal procurement data to determine which agencies buy which goods and services. You can also look for contracting opportunities on the federal government’s main contracting website, SAM.gov. In addition, you can participate in government-sponsored trade shows and conferences. These events provide an excellent opportunity to network with government officials and learn about upcoming contracting opportunities. If you can spot trends, you can pre-emptively makes offers.
Smaller businesses can seek an Office of Small and Disadvantaged Business Utilization (OSDBU) representative. The OSDBU can help you navigate the contracting process and connect you with opportunities that fit your business.
Once you have registered your business and obtained the necessary certifications, you can begin bidding on government contracts. The first step is to find opportunities that match your business’s products, services, and capabilities.
We’ll cover how to make your bid for a government contract in our next article. We hope you’ve found this information on becoming a government contractor useful. If you have any questions, please don’t hesitate to reach out to us. We’re here to help you every step of the way.