Many small companies don’t think about federal contracting as a viable business opportunity. They’ve only heard of defense contracts or major infrastructure projects like bridges and roads.
In reality, the government purchases a wide range of products and services, just like any large organization. As with many government activities, contracting is paperwork-intensive and detailed – and acronyms become a way of life. But you may be surprised at the number of contracts the government awards to small businesses.
How much government work is available?
The contracting forecast posted by the Government Services Administration (GSA) reveals hundreds of diverse opportunities from newsletters to building repairs to car parts to administrative services.
The government has a goal of awarding 23 percent of contracts to small businesses, with actual performance of 22.25 percent in fiscal year 2012, or $89.5 billion, according to the Small Business Administration (SBA) scorecard.
As the flagship agency for boosting small business contracting, the SBA tracks an additional goal of 36 percent for small business subcontracts from larger companies. The agencies reached 33.6 percent that year.
Also tracked are goals for businesses owned by veterans, women and the disadvantaged as well as those operating in HUBZones – impoverished areas targeted for economic stimulus.
Of the 24 government agencies on the SBA report, the largest was the Department of Defense, which awarded $56 billion to small businesses in 2012. The smallest was the National Science Foundation, with $44 million.
What’s it like working with the government?
The size of this marketplace and the push to include more small businesses means new opportunities for many companies. That said, bidding on contracts and subcontracts is not undertaken lightly.
Selling to the federal government, especially the first time, can be a complex, lengthy and confusing process. Contracting is extremely detailed and requires impeccable record keeping.
Understanding this, the SBA and the other sites provide a number of resources to help businesses enter and succeed in this arena.
How do you get started?
The SBA has a section of its website, www.sba.gov, dedicated to contracting assistance. It includes small business size standards and other definitions, understanding the
federal marketplace, and the nuts and bolts of contracting.
The first step is to explore existing opportunities for your company. By looking at past awards and current bid opportunities, you can see what type and size of jobs you may be able to bid on.
It isn’t necessary to register to browse the open jobs at FedBizOpps.gov (www.fbo.gov). Advanced search lets you drill down into the location of work to be performed, agency, type of award, industry and job classification code.
You can create search agents with email notifications to receive updated opportunities. User guides and videos are available to walk you through the site. For a review of awarded contracts in your industry or location, visit the Federal Procurement Data System (www.fpds.gov).
If you decide you want to proceed with obtaining contracts or subcontracts, you will need to register your business as a vendor. The System for Award Management (SAM) is the central registry.
To set up an account, you will need to provide information about your business, most notably several numeric codes. This may take some time and preparation. Included is a DUNS number, obtained through Dun and Bradstreet (www. fedgov.dnb.com/webform).
Your employer identification number (EIN) is required. If you are a sole proprietor, consider getting one since your personal Social Security number will be used and cannot be guaranteed to be secure in the System for Award Management. An EIN can be obtained from the Social Security Administration and takes two to five weeks.
A couple of codes will provide possible buyers with information about what you offer. These are the NAICS, or industry classification, code that you provide on your tax returns and the federal supply class code (FSC) and product supply class code (PSC).
You can look up all of these on the Federal Service Desk (www.fsd.gov) site. If your business offers a variety of products and services, be sure to use codes that match the likely opportunities. When registered in SAM, you will receive a CAGE code, the number that will identify you as a specific government vendor.
Where do you search for available contracts?
Once registered, you can use FedBizOpps to find appropriate opportunities. Subcontractor opportunities can be found through SUB-net (www.sba.gov/subnet). You can also register for the Dynamic Small Business Search database (dsbs.sba.gov), where agencies and prime contractors search for small vendors.
Another major source of contracts is GSA’s Schedules Program (www.gsa.gov/portal/category/100611), where about 10 percent of government purchases are handled. Agencies, including local and state governments, purchase directly from businesses on this site.
These contracts are long-term. You will need another number, Special Item Number (SIN), to categorize your product or service.
In addition, each state has a Procurement Technical Assistance Center (PTAC), where small businesses can receive one-on-one assistance and attend training sessions.
The Association of Procurement Technical Assistance Centers (www.aptac-us.org) has a directory of state contacts. The centers have also compiled tips and resources and will walk you through the registration process, help you with receiving notifications of appropriate opportunities, and assist you with preparing bid packages.