5 Tips To Winning a Government Contract

By Jennifer Friedman

Opportunity could be knocking for small business owners who are open to prospects in government contracting. Small businesses were eligible for $357 billion of federal contracts last year, according to the Small Business Dashboard. With many government contracts available to small businesses, it’s important to know how to best position your company to ultimately reap the benefits.

As a percentage of overall government contracts, those available for small businesses are on the rise. According to the SBA, federal agencies awarded $83.1 billion worth of contracts to small companies in 2013. And the forecast looks good as Congress is considering legislation that would add more than $10 billion for small business contracts every year. The federal government also has procedures in place to allow for “micro-contracting,” which facilitates smaller contracts, and it designates goals for awarding prime contracts to small businesses every year.

So, how can your business get a piece of the pie? Here are five tips to help guide you through the process:

1. Determine if You Qualify as a Small Business

It’s a good idea to incorporate  your small business. The SBA defines “small business” based on  the number of employees or the average annual sales of the business. Additionally, these qualifications are determined by the North American Industry Classification System (NAICS) on an industry-by-industry basis. For example, an engineering firm might not be classified as a small business if it has more than $10 million in annual receipts, but a local retail outlet may be considered a small business until it reaches $25 million in annual receipts.

2. Be in Good Standing

To become eligible for a government contract, businesses should be in good standing  with the state(s) in which they conduct business and have up-to-date business licenses. Being in good standing means a business is to date with annual reporting, franchise taxes, and other compliance requirements. Businesses that do not stay up-to-date with compliance obligations and business licenses can lose their authority to operate within the state which may impact their eligibility to obtain government contracts.

3. Register Your Business

It’s easy for small businesses to register to receive federal contracts and provide payment information through the System for Award Management (SAM) website, which is the central registration system for all potential government vendors. Not only is SAM a portal through which small businesses can provide the necessary information and certification required by all government agents, but it's also a marketing tool that can help your business stand out from hundreds of others in your category. Companies doing business with the U.S. government must also have a DUNS Number, which uniquely identifies each of your business locations. Obtaining a number is free, and you generally can get a number by the next business day.

4. Get Connected

Once a business has met all necessary government requirements, registered and obtained a DUNS Number, it is ready to pursue government contracting opportunities. The SBA's Business Matchmaking web page is a great tool for matching small business owners with the right government contracting opportunities. Small business owners can also visit www.fbo.gov as a one-stop gateway to find federal business opportunities greater than $25,000 and to retrieve the relevant information required to bid on solicitations.

5. Take Advantage of Specific Programs

Depending on the type of business you own, there are also programs unique to some small businesses, including those geared toward economically- or socially-disadvantaged businesses, women-owned businesses, or service disabled veteran-owned businesses. Check out www.acquisition.gov as a resource that provides details on regulations, systems, resources, opportunities, and training for small businesses pursuing government contracts.

Government contracts can represent a lucrative, untapped source of revenue for many small businesses. While there are regulations and rules to understand, many resources exist to help guide business owners through the process.