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Beginner’s Guide to Becoming a Government Contractor

Beginner’s Guide to Becoming a Government Contractor

Government contracting is a highly sought-after industry. Many government institutions forge agreements with companies to drive success and fulfill various missions for the defense, intelligence, healthcare, information technology, cybersecurity, and construction domains.

With many government contracting companies being global leaders in their specific fields, and having spent billions of dollars to fuel their high-profile projects–delving into the industry might seem intimidating and complicated for smaller businesses.


What is government contracting?

What is government contracting?
 Image by Jack_the_sparow / Shutterstock.com


By means of government contracting, businesses are able to sell their products or services to the government and to different federal agencies. And how does it work?

The government chooses businesses by awarding them with the contracts presented for bidding. One way government contractors can snag deals is by submitting the lowest-cost bids. These bids must meet the requirements and minimal specifications of the contract.

Government contracts come in different types. The most common ones are suitable for prime contractors. There are also various types of contracts for small businesses. These may vary in terms of order period, the number of orders allowed during the contract’s validity (whether the contract value is amenable or not), and if the agreement will have subsequent modifications. 

Depending on the contract type, contracting activities may modify parts of the contracts and make multiple orders from their chosen government contractors as they see fit. The winning enterprise is funded by the entire contract value at the time of award or in segments.

On the bright side, the federal government has partnered with the US Small Business Administration (SBA) and established contracting guidelines that level the playing field for smaller enterprises, Thus, enabling them to secure agreements from federal institutions.


How to become a government contractor?

The federal government comprises countless agencies, offices, and organizations that require a specific product or service type in large quantities worth millions and billions of dollars. With that, the US government is the top spender of government contracting services. 

Federal government agencies seek several products, services, and solutions from businesses. From manufacturing armaments to developing aerospace solutions, from developing vaccines for COVID-19 to bolstering Internet and network security and constructing new facilities and buildings, the government will have use for commodities offered by big and small businesses.

If you provide any of these businesses or services, plan to expand on these products, and want to delve into the government contracting industry and snag distinguished deals, here are some guidelines below.


Register your small business for government contracting services

Register your small business for government contracting services
Image by RomanR / Shutterstock.com


Before you get contracted by the government, you’ll need to register your business first. Both big and small companies must complete paperwork to ensure the legality of their transactions with various contracting activities. This legality also establishes strict transparency about the funds they will potentially receive in every deal.

Below is a rundown of how to register your business and get started with securing high-profile federal contracts.


Register Your Business Name

Start by deciding on a business name. Choose one that reflects your brand identity and is not taken by any enterprise yet. The more unique the brand name, the more likely you are to set your business apart from other potential contractors.

Legally register your business through either of these four ways: 

  • Entity name – An entity name protects your enterprise at a state level. Your business entity name may depend on the state’s regulations. Always check with the state’s business rules regarding establishing your business identity and preventing sharing of brand names with others.
  • Trademark – A trademark protects your business name, products, and services nationally. Trademarking your enterprise prevents other similar businesses from using your trademarked brands and products.
  • Doing business as (DBA) name – Depending on your business structure and in which state your business is operating, you might have to register with a DBA name. Also called a trade name, a DBA name lets you conduct business under a name different from your personal name or entity name. Your DBA name lets you secure a federal tax ID number and open a business bank account.
  • Domain name – Register for a domain name to establish your business’ online presence. Also called a website, URL, or address, no one can use your domain name as long as you continue to own it. Domain names should be renewed every year or so to maintain ownership. 


Apply for Your Federal and State Tax ID Numbers

After officially registering your business name, your next step is to apply for your Employer Identification Number (EIN). Your EIN, or federal tax ID, works similarly to your social security number. EIN is used for applying for business licenses and permits and paying taxes. Keep in mind your EIN can’t be used for lotteries and tax lien auctions.

The most convenient way to apply for your EIN is through the official IRS website. Once you’ve completed the form, your information will be validated, and you’ll receive your EIN immediately. Other ways to register for your federal tax ID are via mail, fax, and telephone (for international applicants who want to bring their business to the US).

It’s worth mentioning that the IRS’s online application for EIN is only available for businesses, agencies, and entities in the United States and US Territories. After you’ve received your EIN, you’ll need to apply for your state tax ID number. The application process is similar to getting your federal tax ID, although steps vary from state to state. You’ll need to check your state’s official website for the application requirements for your state tax ID number. 


Register your business at System for Awards Management (SAM) 

Register your business at the official System for Awards Management (SAM) website to enter the government contracting domain. Applying at SAM.gov will get you your Unique Entity Identification (UEI), a unique 12-digit code that will serve as your enterprise identification.

Previously, the Dun & Bradstreet Data Universal Numbering System (DUNS) code was necessary for businesses to be qualified for government contracting. However, the federal government concluded using DUNS on April 4, 2023, and has fully transitioned to using SAM.gov’s UEIs as the prime identifiers for businesses wanting to be government contractors.

To sign up for your UEI, you’ll need to select ‘All Awards’ as your registration purpose and input your entity type. You’ll also need to provide the following information to get your UEI:

  • Legal business name
  • Physical address (a post office box may not be used as your business’ physical address)
  • Date of incorporation
  • State of incorporation
  • National Provider Identifier (for non-US residents only)
  • Taxpayer Identification Number (TIN) and taxpayer name
  • Contractor and Government Entity (CAGE) code for locally registered entities or NATO Commercial and Government Entity (NCAGE) code for foreign entities.
  • Financial and banking information for your Electronic Funds Transfer (EFT)

If you’ve previously registered for DUNS numbers before April 4, it’s wise to register your businesses into the SAM-based UEI numbers to continue winning contracts and transacting with the federal government.


Know Your North American Industry Classification Systems (NAICS) Code

After you’ve received your UEI code, you can check the official North American Industry Classification Systems (NAICS) website for your businesses’ NAICS codes. Check the “references” tab to get a list of the updated numbers assigned to different industries.

NAICS numbers are used by federal statistical agencies in classifying businesses to collect, analyze, and publish statistical data relevant to the US business economy. You can have more than one NAICS code that represents your businesses and products.  


Confirm Your Business Size

To know if your business qualifies as a small business, use this Size Standards Tool by the US Small Business Administration. This free online tool will ask for your NAICS code and your business’ five-year average of your annual revenue, then determine if your business size is small and applicable to SBA registration guidelines.


Fill Out Your SBA Profile

This is a step that other contractors commonly overlook. Although it is not a necessary qualification to become a government contractor, having a compelling SBA profile gives the contracting officer a deeper look into your business. It considers if your services fit their needs.


How to find government contracting opportunities

How to find government contracting opportunities
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After registering for the necessary ID numbers and memberships, procurement officers can now search your small business easily. That said, it’s important to proactively seek government opportunities in order to become a prime government contractor.

Below are some places you can access government contracts and start bidding for them:


Search via SAM.gov

SAM.gov is one of the prime websites for federal agencies to post contracting opportunities. While there are other places to find contracts out for bid, navigating the site lets you become familiar with the biggest government agencies and the potential high-profile projects that fit your product and service line-ups.

Be familiar with conducting searches, tinkering with the filters, saving search results, and setting notifications at SAM.gov. That way, you’ll know how to narrow down your search and find the most suitable agencies to work with.


Get into contracting vehicles

You may get more contracting opportunities by becoming a contract holder of the US General Services Administration’s (GSA) Multiple Award Schedule (MAS), Government-Wide Acquisition Contract (GWAC) or Multi-Agency Contract (MAC), or partnership vehicles. Here are their distinctions:

  • Multiple Award Schedule (MAS) – Also referred to as the Schedule program, MAS is the most common procurement method federal agencies use. While MAS doesn’t offer guaranteed sales for contractors,  it gives small and medium-sized businesses the chance to secure contracting opportunities priced at least $9 billion a year.
  • GWACs and MACs – Similar to the Schedule program, GWACs and MACs give businesses additional contracting opportunities. However, these contracting programs have a limited timeframe for submitting proposals for solicitation. Some of the advantages of these contract programs include less competition for task orders and streamlined ordering procedures for government agencies.
  • Partnership – Securing a partnership contract program helps small business owners improve their ability to compete for contract bids by accessing the deals, networks, and knowledge of more experienced partner contractors.


Search for set-aside agreements

Many contract programs, such as GWACs and MACs, are usually granted to larger businesses. On the bright side, the government provides set-aside contracts for small businesses to have an economic advantage in the contracting industry.

Set-aside contracts come in two kinds, namely:

  • Competitive set-aside contract – Unlike competitive contracts for larger enterprises, set-aside contracts are granted to at least two small businesses that can complete the orders and work requirements of the contract. A competitive setup is usually given to contracts priced below $150,000.
  • Sole-source set-aside contract –  This contract type is issued without a competitive bidding process. Sole-source contracts only happen when only one small business can fulfill the contract’s requirements. Small businesses must be registered with SAM.gov to participate in any contracting programs they qualify for and secure sole-sourced agreements.


Check Agency Procurement Forecasts

Acquisition.gov’s Agency Recurring Procurement Forecasts is another suitable place to find contracting opportunities. On this page, you’ll find a comprehensive list of federal agencies, each with a link to their procurement forecasts pages; the sites show active and upcoming contracting opportunities. If you’re looking for all sorts of deals that may suit your line of business, exploring agency procurement forecast pages gives you access to more streamlined federal contracting opportunities.


Enter subcontracting

Small businesses must establish a good track record as a vendor before qualifying for more significant government contracts. But businesses not primed to work with federal agencies may still work for the government through subcontracting

Complex and large-scale federal contracts usually require a subcontracting plan to ensure the contractor completes the contract satisfactorily. That’s why prime government contractors seek out small businesses to be subcontractors to help them execute the work stipulated in the government contract. Through subcontracting, small businesses can gradually develop their competence and reputation to become prime vendors for the government. 

To help you find subcontracting opportunities, Small Business Administration has a dedicated free-to-use subcontracting database called SubNet, hosting all the contracting opportunities available in all states.


Search the US Digital Registry

The government contracting industry has also caught up with the efficiency of social media. A handful of contracting offices have communicated with vendors and bidders through Twitter and LinkedIn. 

But because social media is an ocean of posts and data, finding the right contracting opportunities may be challenging. You may look into the US Digital Registry to find if your federal customers are active on social media and the platforms they often use. That said, whichever site your target audience is, you must be present to win prime or subcontractor bids.


Comply with public and labor laws

Searching available contracts for bidding isn’t the only springboard to becoming a federal contractor. Large and small businesses have to abide by public and labor laws to be able to access prime government agreements.

The Federal Acquisition Regulation (FAR) is the primary governing body for all federal government procurement processes. Small business owners may look for the governing government contracting regulations they need to comply with and the programs they qualify for at 13 CFR 125.


Comply with cybersecurity requirements

Small businesses must comply with the federal government’s cybersecurity requirements to determine if they are capable of protecting their systems and critical information about the contract, contracting activities, and terms and conditions.

Every proposal request from the DoD will come with a Cybersecurity Maturity Model Certification (CMMC) level enforced to complete the work. Small businesses can use Project Spectrum, a platform the DoD developed to help enterprises complete the training and get the tools they need to bolster their cybersecurity measures and meet the CMMC standards.


How to win contracts if you are a government contractor

How to win contracts if you are a government contractor
Photo by LightField Studios / Shutterstock.com


Drafting a proposal for a potential government contract is just the start of the bidding process. But if you need to jumpstart your journey in writing successful bid proposals, here are some of the things you have to take note of:

  • Read and re-read the solicitation document

Regardless of the solicitation type you’re going for, it’s crucial to read and re-read the solicitation document before writing your proposal. It pays to be detail-oriented in this line of work. If you miss even one detail about the government’s solicitation, your bid will be deemed “non-responsive, and your proposal will likely be rejected.

It’s best to review the entire solicitation and its detailed requirements carefully. Most importantly, understand the contract regulations. Contact the procurement contracting officer if you have any questions about the document.

  • Align your proposal with the government’s specified needs

By carefully reviewing the solicitation, you can conveniently align your proposal with the government’s specific needs. Although government contract bid templates may be available online, writing your bid around the government’s particular needs and how your business can help them is better. 

Framing your proposal bid with the federal government’s needs will help you fully understand their requirements and plan how your business will complete them. Doing so also saves you from making government contract bidding mistakes that will bar you from expanding your network of contractors and securing impactful government contracts.

  • Highlight how your company can deliver the best solution

After discussing your business’s expertise, it’s time to get down on your straightforward solutions-based approach to the government’s specified needs. Creatively crafting your business history and logical and actionable plan into an executive summary can position your company as a strong contender for the contract.

Once you have penned down your bid proposal, have your document reviewed before submitting it. Doing so will help you double-check spelling mistakes, unclear messaging, and other details affecting how the government’s reviewing panel will receive your proposal.

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