Growing Your Small Business: Utilizing Government Contracts

Once you’ve got a business up and running, it’s easy to forget that there are other streams of revenue available outside of the public sector.

The federal market place puts a lot of money into contracts – around $90 billion in 2012. That’s more money than I can shake a stick at. While there’s a lot of income to be had by investing and participating in government contracting, it’s not easy

Since you’ll be doing business with the government there will be a lot of regulations to follow and registration processes to go through. Most of the rules, regulations, and procedures involved can be found on the Small Business Administration’s (SBA’s) website, here. Remember, even if you jump through all the hoops successfully, and are able to start bidding on government contracts, the federal market place can be just as tumultuous and competitive as the private sector.

Getting Your Foot in the Door

The first step you need to take before you start shoveling in the cash is to register with the SBA. The registration process is done primarily through a system called SAM, which stands for System for Awards Management. SAM is a database of vendors that are willing to bid on contracts with the federal government. You must register for SAM before any business can be transacted.

While you are registering for SAM, you will be able to specify your business size and socio-economic status. It is important to fill out these portions with particular detail. Government agencies search for vendors via size, location, experience, ownership, etc. But more importantly, there are set-aside contracts for small businesses of certain ownership and location.

There are set-aside contracts for women-owned, veteran-owned, service-disabled veteran-owned and other disadvantaged businesses. There are certain opportunities only available to business whose central location is located in a Historically Underutilized Business Zone.

Even though there are set-aside opportunities for small disadvantaged businesses, that doesn’t mean that they will always prosper, and that’s why there’s the 8(a) program: to help small disadvantaged businesses compete.

Obtaining the Proper Codes

You’ll need certain identifications codes in order to fill out SAM properly. First, there is the D-U-N-S Number, which is a nine-digit classification number that assigns your business a physical location. With a D-U-N-S Number, government agencies will know exactly where to find you.

Next, for size/economic/industry classification, are the NAICS codes, which stands for North American Industry Classification Codes. These codes will help government agencies search through vendors by industry, size, and economic status. It’s important that you fill these out properly in SAM; the more ways that government agencies can find you, the better.

Staying Ahead of the Competition

Like I mentioned earlier, the federal market place is an extremely competitive place for small businesses. Here are a couple of tips for staying ahead of the competition

– Demonstrate your value: it’s important to build relationships with government agencies that could potentially need your services. The relationships need to be healthy and long-term. This can usually be accomplished through traditional networking techniques – you don’t need to do anything too fancy.

– Distinguish yourself: try to show government agencies the services that you have in common with your competition, but focus on unique services or special outcomes that your completion doesn’t have. Showing the results of your work, rather than the work you could potentially do, is the best way to distinguish yourself.

– Be online: don’t be afraid to use extra tools that your competition might not have thought of: a bid notification service is an oft overlooked asset. One of these services will help you keep track of pending bids, notify you of new contracts, and give you access to eprocurement (bid offers electronically).

There you have it. You are now ready to register for government contracts and stay ahead of the competition.