A Guide to Doing Business with the Federal Government


Do small businesses stand a chance of winning a government contract with federal agencies in an industry where corporate giants still prevail?

Fortunately, yes!

Huge corporations may dominate the government contract industry, but that doesn’t mean that smaller companies have no chance of winning a government contract. With the existence of development policies and the industry to come reforms that aim to further level the playing field for small government contractors, doing business with the federal government no longer seems too impossible.

How can the federal government support my business?

The United States government is one of the biggest spenders in the world. In 2020 alone, the federal government posted a record $682 billion value of federal government contracts awarded, where a important part of it went to small businesses. With an industry as massive as this, doing business with the federal government can pave the way for your small business to grow like never before.

  1. Opportunity to win big

Finding prime customers is essential to the growth of any small business. And that is why doing business in this billion dollar federal government outsourcing industry can definitely give you opportunities to earn big.

  1. Compete for exclusive small business contracts

The federal government recognizes that not all businesses have equal access to government procurement opportunities. And that’s why some contracts are more accessible to small businesses, such as the set-aside contracts. Also called fallowing,

  1. Benefit from long contract periods

One of the difficulties of every business owner is to find stable customers who will stay with the business for a considerable period of time.

Luckily, the world’s biggest spender is also offering longer contract terms to its government contractors! The length of each government contract can vary, but they generally last from one to three years. Additionally, if the federal agency you work with is pleased with your performance for the contract, they may renew your contract if there is still work to be done. If there is none, they can take your past performance as a reference when you bid again on a new contract with them.

  1. Guaranteed payments

You don’t have to worry about being left hanging by your customer. Since federal laws are binding on the government itself, they strictly adhere to federal regulations, especially the terms set out in the contract.

How do you sell something to the government?

Choosing to become a government contractor is serious business. You will invest your time and resources to prepare your business to enter the government contracting industry. So that your efforts do not end in vain, here is an overview of the things you need to do to be able to start selling your products or services to the government:

  1. Know your target market

Blindly entering the field of public procurement will only be a disaster. Get to work and find out if the products or services offered by your company are in high demand. You can get an idea of ​​the current contract market situation by viewing previously awarded contracts on USASpending.gov and current contractual opportunities at SAM.gov and Subnet.

Also, don’t forget to use these contracting opportunities forecasting tool managed by the General Services Administration (GSA). Keeping tabs on these government websites can give you an edge over the competition.

  1. Learn more FAR

The Federal Acquisition Regulations are a set of primary rules and regulations that guide the federal government’s procurement of goods and services from government contractors using the allocated federal budget.

So, to put it simply, FAR is the federal government’s and contractors’ rulebook that they must follow whenever they do business with each other. And with this in mind, you must know the crucial clauses stated at FAR so that your efforts to thrive in this industry are not in vain.

For businesses looking to do business with the government, there are existing assistance programs that can help businesses succeed.

  1. Determine your eligibility for small business assistance programs

First, you must confirm that your business size falls within the stated parameters that qualify your business as small. You can use this Size Standards Tool by the SBA to find out.

In addition, different types of procurement support are available for disadvantaged small businesses. The Small Business Administration, the official government agency that promotes and protects the rights of small business owners, offers support programs for small entrepreneurs. By joining SBA’s contracting assistance programs, you can qualify for a layaway contractsteam up with established government contractors to win more federal contracts and meet mentors.

  1. Continuously improve your skills

Public procurement is an ever-changing industry. And to thrive as a federal contractor, you must be able to keep up with these changes through your innovative business solutions. Aim to obtain the necessary licenses and certificates to increase the value of your skills and always be on the lookout for learning opportunities.

SBA also provides learning opportunities for companies operating in the public procurement sector. You can visit your local Purchasing Technical Assistance Centers (PTACs), which can provide valuable assistance to your business. Visit this site to see the nearest PTAC to you.

  1. Know your NAICS codes

Your NAICS code, or North American Industry Classification System code, will be used by contracting officers to identify the nature and industry of your business. Go to their self-service website, then select the one from the NAICS codes in the list that best describes your business. If your contracting company offers various products and services, you can choose more than one NAICS code.

  1. Register your business at SAM.gov

Registering your business on the Awards Management System website means you are now qualified to bid on and win federal contracts. Here are the requirements you will need to register your contracting company at SAM.gov:

  • Employer Identification Number (EIN)

Your EIN will prove that your business complies with federal tax rules. You can apply for your EIN at IRS.

  • Get your CAGE / NCAGE code

If your business is located in the country and its territories, you will be assigned a CAGE code. You can get it after completing your SAM.gov registration.

On the other hand, you will need a NCAGE code if your company is established outside the United States and its territories. Ask for one before your SAM.gov application here.

The federal government has moved from using the DUNS number to using the Unique Entity Identifier (UEI). Unlike the DUNS number where you must apply for it through a third-party website before registering your business on SAM.gov, you can automatically receive your UEI after completing your registration on SAM.gov.

  • Banking and financial information

This sensitive information will be used to set up the electronic funds transfer (EFT). The federal government will wire the money directly to you using this payment method.

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