As a small business owner, you’ve probably explored various ways to grow your customer base, but have you set your sights on Uncle Sam? If you haven’t looked into selling to the federal government, you could be missing out on a lucrative financial opportunity. Considering that the U.S. government is the largest purchaser of goods and services in the world, why not get in on the action?
how to become a government contractor
The federal government awards hundreds of billions of dollars in federal contracts each year to businesses to meet the needs of federal agencies and the military—everything from computer ink to furniture to forklifts. These contracts don’t just go to large corporations, though. The government is required by law to consider buying from small businesses, and has set a goal of awarding at least 23% of all federal contracts to small businesses.
Unfortunately, many smaller companies shy away from government contracts because applying for one (called “bidding”) can seem overwhelming, from reading through lengthy solicitations to putting together a comprehensive proposal that meets many specific and detailed requirements.
You’ll also typically be competing with other companies to win a contract, so there’s no guarantee that your time and effort will pay off. Luckily, we spoke to a handful of experts for the inside scoop on how government contracts really work. Here’s what you need to know to be successful.
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Are your products needed?
You might be wondering if the government actually needs the types of products or services you offer, but don’t count yourself out too soon. Maurice Harary, owner of The Bid Lab, a Manhattan-based company that writes proposals for businesses bidding on government contracts, has seen opportunities for small companies in a broad array of industries. “We have clients in fields such as medical, marketing, technology, legal, construction, public relations and real estate,” he said. “We really haven’t seen an industry that hasn’t had opportunities.”
To get a better idea of whether the government buys what you sell, it’s a good idea to look up your industry’s six-digit North American Industry Classification System (NAICS) code. You can then enter your code into a search on USASpending.gov to see what contracts have been awarded to members of your industry in the past, including the price awarded. (Tip: You might have multiple NAICS codes if you sell multiple products and services.)
Finding opportunities
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To search for contract opportunities, check out the Federal Business Opportunities website (called FedBizOpps for short), which lists all open federal contract opportunities over $25,000. There are various kinds of solicitation notices that you’ll find, and it’s important to know the differences. A contract opportunity that is currently open and accepting proposals is called a Combined Synopsis/Solicitation, and typically includes contact information, deadlines, and information about how to submit your proposal. It may also be called a Request for Proposals (RFP) or a Request for Quotes (RFQ).
Other notices that may come up in your search results include a Presolicitation, which is a notice about a contract opportunity that will open for proposals in the future; and Sources Sought, which is a request for information from a federal agency to help it understand the interests and capabilities of businesses that would submit proposals for a future contract.
It’s a good idea to use the search filters that FedBizOpps provides. “I think a lot of people feel frustrated because they’ll see a perfect RFP, and then they realize it’s due the next day which really stinks,” said Harary. “Be sure to filter by ‘Posted Date,’ so if you check every week, you’ll just review the opportunities that have been posted within the past week.”
You can also filter results by keyword(s), just be aware that every solicitation that contains those words may come up, even those unrelated to your industry. “Always have a human going through it—perhaps someone who does business development or marketing for your company,” Harary added. “The AI is just not there yet.”
Don’t overpromise in your technical proposal, because that becomes part of your contract and you’re going to have to deliver to those technical specs.
Todd Overman, chair of the Government Contracts Practice Group at Bass, Berry & Sims
Look for set-asides
To help create a level playing field, the federal government offers some contracts that only small businesses can apply for—called small business set-asides. You’ll first need to qualify as a small business to bid on these (you can use this online tool to help you check).
“Keep in mind that yourNAICS code is tied to the size standard and it varies by industry, so just because you’re small in one industry doesn’t mean you’re small in another,” said Ambika Biggs, a government contracts attorney and partner with Hirschler in Tysons, Va.
Some set-asides are intended for small businesses in certain socio-economic categoriesthat participate in the Small Business Administration’s (SBA’s) contracting assistance programs, including women-owned small businesses, service-disabled veteran-owned small businesses, small businesses in a historically underutilized business zone(HUBZone), and disadvantaged small businesses in the 8(a) Business Development program.
The SBA’s website includes information about eligibility requirements for each program and how to get certified. Also, keep in mind that when you search for opportunities on FedBizOpps, you can use a filter for set-aside contracts.
