Government Contracting: How I Took My Construction Company From ,000 to ,000,000 - What I Know
How to Become a Government Contractor
Many U.S. companies find lucrative business opportunities by becoming government contractors. Federal, state, and local governments buy goods and services from contractors in nearly every field and industry. To become a government contractor, you must first register. You also have the option of having your business certified as a small business, which will open the door to more opportunities.
Registering as a Federal Contractor
Find your NAICS classification.The federal government uses the North American Industry Classification System (NAICS) to classify U.S. businesses for the purposes of gathering statistics on the U.S. economy. These codes also are used to classify contracts.
- The most current edition of the NAICS manual is available at . Use it to find the code or codes for your business.
Gather information about your business.In addition to your NAICS classification codes, there are other codes and numbers related to your business that you'll need to register as a federal contractor.
- You'll need the federal tax ID number of your business, as well as your Standard Industrial Classification (SIC) codes.
- You may have other codes, such as a federal supply code or product service codes. If you don't have these, don't worry about it – but if you do, they may come in handy.
Get a DUNS number.The federal government uses a unique, nine-digit number issued by Dun & Bradstreet to identify contractors. You can get a number free of charge if you are registering as a government contractor.
- To start the process, visit and complete the online form. Your number will be issued within 48 hours.
Create an account with the System of Award Management (SAM).SAM is the main database you'll use to manage your government contracts and do business with the federal government. You must register here before you can accept any government contracts.
- Get started by visiting the SAM website at www.sam.gov. Create your user account, then register your business. If you have more than one business, register each of them separately under the same user account.
- Include as much information about your business as well. Use SAM as a marketing tool so government agencies can find you. Agencies often search based on size, location, ownership, and other factors.
Certifying Your Business as Small
Begin as soon as possible.The certification process can take anywhere from three months to a year. In the meantime, your business may end up spending tens of thousands of dollars just to earn your first government contract.
- Once you're certified, you'll be eligible for smaller government contracts that are set aside for specific types of small businesses.
Review the qualifications for certification.The Small Business Association (SBA) certifies businesses in three different areas, each of which has its own requirements. You may qualify under more than one certification area.
- You can be certified if you have a woman-owned business, have a business in certain urban or rural areas, or have an extremely small business that is disadvantaged in some other respect.
- Visit the SBA website at sba.gov to review the requirements for each of the certifications and find out if any of them apply to your business.
Evaluate the set-aside rules and limitations.Before you go through the process of having your business certified as a small business for government contracting purposes, you need to make sure your business actually could benefit from small business set-asides.
- The certification process is long and involved, so if you don't see any benefit to your business in getting the certification, there's no point in doing it.
- By using SAM, you can self-certify in some areas, such as the size of your business or whether your business is veteran-owned.
Apply for certification.If you believe your business qualifies for one of the more specific set-aside programs, complete an application with the SBA to begin the certification process. You may be contacted by an SBA official.
- Keep all of your certification materials in one place, and make copies of everything you send to the SBA so you have it for your business's records.
- If any of the information changes while your certification is still being processed, contact the SBA as soon as possible to amend your application.
Use the size standards tool.Many contracts set aside for small businesses simply require your business to have fewer than a specific number of employees. That number varies based on what industry your business is in.
- The SBA uses the NAICS to set size standards. Get the NAICS classification codes you found for your business.
- Type your code into the SBA's size standards tool, available on the association's website at .
Finding Government Contracts
Search for open federal contracts online.Open contracting opportunities are listed on the FedBizOpps website, located at . The website is operated by the U.S. General Services Administration (GSA), the federal agency that oversees all contracts and government procurement.
Check for smaller state and local contracts.Particularly if you're waiting for small-business certification, you may want to get your feet wet by bidding for a few state or local contracts before you jump right into federal contracts.
- Each state has its own process to register as a state government contract. The information you need to get started shouldn't be any different than what you needed to register as a federal contractor.
- To find out the registration requirements and open contracts available in your state, visit the website of your state's procurement office or Secretary of State.
Research government agencies.If you want to contract for a particular agency or department, get to understand their budget and operations. This will give you a better idea of how high or low to bid to get a contract.
- You'll also find up to date information on regulations and safety standards that may apply to your business if your bid is accepted.
Network within government contracting and procurement programs.You want to cultivate the government as a client just as you would any other. Get to know the people in departments, especially local contacts.
- Talking to people in government agencies helps you get a better sense of what the agency's needs are, as well as their budgetary restrictions.
Attend government agency events.The SBA and government contracting agencies host conventions, workshops, and other events that allow contractors to better connect to the staff in different government agencies.
- You also can attend events focused on your particular industry that are hosted by a company in the private sector. In addition to private networking opportunities, government procurement experts frequently attend.
Find a mentor.If you're a small-business owner just getting started as a government contractor, you may want to take part in one of the two mentor programs sponsored by the federal government.
- The mentor program run by the GSA connects you with a larger and more experienced government contractor in your industry. They help you navigate the bidding process and get you on your way to winning your first government contract.
- If you were certified as a socially or economically disadvantaged business under the SBA's 8(a) program, there's another mentor program you can use that will connect you with a successful federal contractor.
Train your team.When you work on a federal contract, your business and your team may be subject to federal laws and regulations that wouldn't have applied to your operations otherwise. Your team should be up to date on these requirements so there aren't any problems.
- Some contractors must complete a mandated training process before they can begin work on a contract. Even if training isn't required for your employees, there typically will still be specific regulations and policies they need to know about.
Market towards government agencies.When you respond to bids and write proposals, you are advertising your company. Put your research to work by drafting proposals that clearly identify the needs of the government agency and how your business is best-situated to meet those needs at the best price.
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