How to Qualify for Government Contracts

How to Qualify for Government Contracts

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Ever wonder how your business can get government contracts? After all, the U.S. government is the largest buyer in the world, with purchases amounting to about $500 billion dollars per year. Government agencies are such a big customer of small businesses that some small businesses make their cash solely off of business from government contracts.

And maybe your business can capitalize on this big small business customer, too. Here’s your guide to understanding contracting opportunities with the U.S. government and how to get them.

What Types of Contracting Opportunities are There?

There are 4 main types of contracting opportunities available through the federal government:

  • Micro-purchases are government purchases under $3,000. These opportunities don’t require a competitive bidding process.
  • Sealed bidding is the competitive buying process for contracting opportunities with specific and clear government requirements. These contracts range between $3,000 – $100,000 and are awarded to the lowest bidder that fits the needs of the respective government agency.
  • Contract negotiations are used for contracts that will exceed $100,000 and when highly technical products and services are being sought.
  • Consolidated purchasing programs are for contracts that can be awarded to multiple vendors and can be used by multiple agencies.

How to Get Government Contracts in 4 Steps

1.Get Your DUNS Number

A Dun & Bradstreet DUNS number is a unique nine-digit code that serves as an identifier for your business. This number is directly tied to the credit profile D&B creates on your business, and this number can help you secure a contract with the U.S. government.

This is the number one step on our list because a free D-U-N-S number can take up to 30 days to get. You can get one directly through Dun & Bradstreet or get a free DUNS through your Nav account, but either way you’ll want to start the process now before you’re ready to start bidding on contracts.

2. Find Your NAICS Code

Your business’s NAICS code identifies the industry in which your business operates. You’ll need it to search for opportunities that are right for your business, and the government agency offering the contract need to know your NAICS code to make sure you’re the right business for the job.

3. Make Sure Your Business Meets the SBA Size Standards

In order to qualify for government contracts for small business, you need to meet the size standards set by the Small Business Administration (SBA). Size standards vary by industry, so you’ll need to know your NAICS code before decoding whether you can qualify. Two common size standards are 500 employees and $7.5 million in annual receipts maximum, but you can use the SBA’s nifty size standards tool to check your eligibility.

4. Register with SAM.gov

The System for Award Management (SAM) is where you’ll need to register your business entity in order to qualify for contracts. In addition to your D-U-N-S number, you’ll want to have other information about your business, such as:

  • Your company’s fiscal year start and end date
  • Your Taxpayer Identification Number (this can be EIN or SSN)
  • Your business bank account information
  • Your Commercial and Government Entity (CAGE) code (if you have one, if not one will be assigned to you when you register with SAM).
  • Your corporate structure
  • Financial information, such as your bank account information and whether you have any existing delinquent federal debt (DFD)
  • The type of goods or services you provide (NAICS code, Product and Service Codes (PSCs) if applicable

SAM allows you to see all of your records allowing you to do business with the government in one place. Federal agencies considering awarding your business with a job can see all your information they need to determine if they are able to select you for the job.

Finding Federal Contracting Opportunities: FedBizOpps

Federal Business Opportunities, FedBizOpps.gov or FBO is a site for searching and identifying active federal business opportunities. You can search by state or zip code, by government agency or government agency location, by set-aside code, or by your NAICS code.

FedBizOpps.gov only lists federal opportunities over $25,000. If you’re interested in smaller contracts, reach out to the to the government agency you’re interested in working with to find out what opportunities they have available.

How to Be Successful Doing Business with the Federal Government

Make sure you’re taking advantage of every opportunity you can to boost your chances at securing contracts. Here are two tips:

  1. Consider government contracting goals. The federal government sets contracting goals for their contracts—they specify certain contracts they want to award to small businesses, but they also have goals to award a certain percentage of contracts to disadvantaged businesses, women-owned businesses, and veteran-owned businesses. Goals set by the U.S. government include 5% of contracts awarded to women-owned businesses, 5% to small disadvantaged businesses, 3% to firms located in HUBZones, and 3% to to service disabled veteran businesses.
  2. Utilize SBA certification programs. The SBA offers a program called the 8(a) programs, which helps businesses in economically disadvantaged areas boost their business and increase chances of success. This includes helping with the competitive bidding process and access to sole-source contracts. The SBA offers information on eligibility here.

One final tip: government agencies may also use your DUNS number to look into your business credit report, specifically your D&B PAYDEX score, and use your score to determine if you’re likely to pay subcontractors you’ve hired on for work, or pay your bills in general. The government wants to work with credible companies, and your PAYDEX score is one way to determine your business’s credibility. Check your business credit scores here (it’s free).

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About the Author — Lydia serves as Content Manager for Nav, which provides business owners with simple tools to build business credit and access to lending options based on their credit scores and needs.

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