The United States government annually awards $1 trillion in contracts, and 23 percent — that is, $230 billion — of this total goes to small businesses. In light of this huge volume of potential business, you would think that a lot of small business owners would be scrambling to secure one of these highly lucrative government contracts, but surprisingly only 1 percent of small businesses pursues them. The reason more companies don’t participate in the bidding for government contracts is because they are unfamiliar with the process. The first step to securing one of these contracts is to register as a contractor.
The Central Contractor Registry (CCR) is the main government database for registering contractors. Because contractors authorize their own data, they assume responsibility for the accuracy of their information. The CCR makes the data available to the various government agencies that contract work. This helps level the advantage between large corporations and small business in that small businesses will not have to register with each government agency in order to bid on contracts.
Federal Acquisition Regulation (FAR) policy dictates that all contractors must register with the CCR before being awarded any contract or purchase agreement. Subcontractors, who work for a registered contractor, do not have to register unless they intend to personally bid on government contracts. The Department of Defense, the largest federal contracting agency, requires that all contractors who are bidding for defense contracts register with the CCR and obtain a CAGE (Commercial and Government Entity) code. CAGE is an alpha-numeric identifier assigned to your company by the Defense Logistics Services Center. For more information on CAGE codes, visit the CAGE information page.
You can contact and/or register with the CCR in one of three ways:
When registering with the CCR, you will be asked to provide information about your company. This information includes:
- Your company’s DUNS number — known as the Data Universal Numbering System, it is maintained by D&B as a way of tracking the credit status of different companies. You can apply for a DUNS number by going to the D&B Web site or by calling directly at 1-800-333-0505.
- Your company’s Tax Identification Number (TIN).
- Your company’s Bank Routing Number (ABA) that includes a contact name and number.
- Your company’s information regarding Electronic Funds Transfer from your bank. You must specify whether it is a savings or checking account.
In addition to registering your company with the CCR, you can also contact your local Small Business Administration (SBA) office. They can help you determine which government agencies would be interested in your product or service. For more information on the SBA, read Registering with the SBA as a Small Business. If you are a minority owned-business, consult and register with the Minority Business Development Agency.
Another database with which your company might consider registering is the United States General Services Administration (GSA). For more information on this, check out Working with the U.S. General Services Administration (GSA).
Once you have registered with the government as a contractor, you will move into the next phase of government contracting: bidding for government contracts. This topic is covered further in Working with a Government Agency.
Acquiring government contracts could be a useful avenue for your business. Involving amounts above $100,000 and below $5,000, these contracts are available to small as well as large businesses. Because of this, every small business owner in the United States should at least consider the possibility of pursuing government contracts.