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Win Government Contracts

4 Steps to Win Government Contracts for Small Businesses

Entering the government contracting industry as a small business owner is already as intimidating as it is. But, winning government contracts? That sounds overwhelming.

But it isn’t!

Small businesses are all familiar with the struggle of finding the right market. But the good news is that the opportunity to work with the world’s largest buyer is just within reach: winning contracts with the United States government.

In Bloomberg Government’s annual fiscal report, the U.S. government has achieved a record-breaking $680 billion worth of awarded government contracts in the fiscal year 2020, and small businesses owned at least $144 billion of it. And, this figure is still projected to rise higher in the coming years as the U.S. government continues to procure government contracts to meet the nation’s growing demands amidst the fight against COVID-19.

To further support the economic development of the US, and as mandated by the Small Business Act as well, the government has set aside a percentage of the national spending budget for government contracts to small businesses. The government mandate will open more contracting opportunities for small enterprises, particularly to women-owned small businesses and businesses owned by economically disadvantaged people.

Are you now ready to start winning government contracts? Follow these four steps that GovCon Wire’s team of experts has prepared for you!

1. Register your business

The first step in sealing government contracts for small businesses? Filing for paperwork. Since the federal government spends public funding, it is essential that every entity the government agencies deal with is qualified and adequately documented.

At a glance, registering your business to be a contractor may seem like an arduous process. But once you have nailed down the basics, everything will start to fall into place. So to give you a jumpstart, here is a quick guide to register your small business for federal contract opportunities:

How to register your small business as a government contractor?

1. Register for a DUNS Number

Your DUNS number is the unique 9-digit code you can request at Dun & Bradstreet’s official website to confirm your business’ existence.

Be wary that online hackers are now targeting the federal marketplace by posing as “official websites” and require payment to use these free national services. To stay safely connected and protect your sensitive information against cyberattacks, make sure that you are only accessing the secure websites of the official government agency by checking the URL of the said website.

2. Know your North American Industry Classification Systems (NAICS) Code

As a self-assigned system, you are in charge of selecting which NAICS code best matches your products and services offered.  Check the list of codes by visiting the website here. If you provide varying products or services, your business can also have more than one NAICS code.

3. Use Size Standard Tool

For technical assistance to confirm if your current business size is qualified as a small business, use this Size Standards Tool by the US Small Business Administration to confirm.

4. Register your business at System for Awards Management (SAM) 

Using your DUNS number, register your business for an account for free at their website. Some of the requirements you should keep in mind before creating a SAM profile for your business are as follows:

  • 9-digit DUNS number, legal business name, entity type and information, and your business’s physical location
  • Taxpayer Identification Number (TIN) and taxpayer name
  • For locally registered entities, prepare your Contractor and Government Entity (CAGE) code or NATO Commercial and Government Entity (NCAGE) code for foreign entities.
  • Financial and banking information for your Electronic Funds Transfer (EFT)

5. Fill out your SBA profile

Part of a contracting officer’s meticulous procurement process is to check for the SBA profile of a small business. Before they purchase goods, this will give them an insight into who your company is and what exactly you are offering.

In addition, your SBA profile is necessary to add your business into the Dynamic Small Business Search (DSBS). Certain contracts, such as sole-source contracts, of federal agencies have particular requirements, so having a complete and searchable SBA profile will help you increase your chances of getting considered when evaluating bids and eventually winning federal contracts.

You can access your SBA profile by using the link on your SAM profile under the Small Business Certification section.

By enforcing a thorough application process, the government limits competition by cutting down those who are not genuinely prepared to win awards and contracts while ensuring that the public’s general interest is satisfied.

2. Perform a S.W.O.T. analysis on your business regularly

Before you head into the playing field of federal contracting, it is vital that you at least know everything about your business, so you prepare to join the full and open competition of winning contracts from government agencies.

The Strengths, Weaknesses, Opportunities, and Threats, or commonly SWOT Analysis, is a famous assessment technique that lets the business, no matter their size, have a deeper understanding of these four aspects of the company.

But doing it once is not enough.

After collating your findings from your SWOT Analysis, you should now make a conscious effort to follow through with your plans. You should dedicate yourself to honing your business’s strengths and overcoming its weakness. Doing so opens up more contracting opportunities for your company and minimizes the threats you may face.

Women-owned businesses and small disadvantaged business owners will benefit the most from conducting a routine SWOT analysis. This practice will help them put their businesses at the forefront of the federal marketplace and increase their chances of opening more government contract opportunities.

3. Understand your market

Now that you finally have a deeper understanding of your small business internally, you should now start taking a look externally. Although the industry encourages open competition, the government limits competition by thoroughly checking whether each small business is fit to deliver a particular federal agency’s needs. And that is why it is essential to look at your competitors and potential clients to whom you can seal contracts.

How to know your competitors in the government contracting industry?

SBA has a tool called Dynamic Small Business Search (DSBS). The DSBS works in two ways: (1) contracting officers can scout the private sector for federal business opportunities, and (2) contractors can look into their competitors.

Using DSBS, you can now conduct a competitive analysis and see your company’s products and services, their business growth, the other federal agencies they are currently engaged in, and more!

To access this tool, you should first register your business to SAM, then fulfill your SBA profile found on your SAM profile. For more information, you can go back to our first step above.

How to know which federal agencies are most likely to give me a government contract?

One of the ways you can guarantee your success in getting a signed contract from a government agency is to advertise to your potential clients directly rather than broadcasting in general.

To help you hone your focus on who you should advertise to, look at which federal agency has purchased a similar product or service you are currently offering by using the Federal Procurement Data System (FPDS) ezSearch tool. Similar to how a Google Search works, type in relevant keywords into the ezSearch search box.

For example, you are a company that offers landscaping services. To look up competitors and the federal agencies they signed a government contract with, type “landscaping services” on the ezSearch search box, then hit enter. You can further refine your search results page by selecting filters on the right side of the page. If you need technical assistance for the use of this tool, visit their FAQ page here.

In addition, FPDS also publishes annual reports, such as Top 100 Contractor Reports and Small Business Goaling Reports, that can help you see the trend on the government contracting market. You can now view these reports at SAM.gov’s Data Bank.

4. Grow your business network

Equipped with vital knowledge about your company, competitors, potential clients, and the latest market trends by performing the research as mentioned above and assessment techniques, it is now time to make your small business known!

By establishing your business network, you can now break into the industry and make your business known among prospective federal agencies.

Establish a network with the right people

Networking can bolster your company’s growth. Connecting with the right people can give your small business qualified leads and even an opportunity to show off your products and services to potential clients.

Business conferences are great avenues to begin networking, and you can start by attending the latest conferences within your area. And to further increase your chances of sealing a deal with your target government agencies, you can sign up for upcoming conferences here.

To be in the loop for the latest news and industry events, you can tune in to GovCon Wire for more networking events!

Enter subcontracting

Before you have the opportunity to win larger contracts, you should establish your reputation that your business is capable enough. And that is why signing up to be a subcontractor is a great way to build your business’s reputation in the government contracting industry.

As a subcontractor, you will be working under a contractor who was awarded prime contracts. Although you would not be awarded contracts directly by the federal government, it will be an excellent opportunity to show your company’s ability and potential, especially if you are just starting in the industry. Taking advantage of this chance can be your metaphorical “foot in the door” to win more government contracts.

To know more about being a subcontractor, you can visit this page at SBA’s official website here. And if you are interested in beginning your journey as a subcontractor, you can check out subcontracting opportunities at SubNet, SBA’s dedicated database for contract listings for subcontractors.

Entering the government contracting industry takes hard work. Qualifying for government contracts alone requires you to undergo a long, meticulous process that may wear you down. Fortunately, the U.S. government has set up policies and organizations to support small business owners interested in dealing with federal contracts.

The US Small Business Administration, the official government organization for small businesses, is committed to assisting and protecting the rights of small businesses, especially those women-owned small businesses and small disadvantaged businesses. They help bridge small business owners to a contracting officer for potential contracts, too.

And to make it even more incredible, the SBA also runs the Historically Underutilized Business Zones (HUBZone) program! If your business is a qualified HUBZone small business, you will be granted preferential consideration on certain contracts. To know if your business qualifies for the HUBZone program, check here.

Always in the loop of the latest news about the federal government, its key decision-makers, and the government contracting industry by subscribing to our daily newsletter!

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