Being A Government Contractor Is Fantastic For Your Business
In many markets, small businesses are often outcompeted by larger organizations that often have access to almost unlimited resources. This set aside actually might increase a small business’s chances of winning a lucrative bid.
The federal government is required to set aside at least 23 percent of its total spending specifically for small businesses. Several small businesses have made a fortune just on federal government contract awards.
The Federal Government Offers Great Opportunities For Many Types Of Businesses
The government actually designates a portion of the contracts for women-owned small businesses, small disadvantaged businesses, companies within historically underutilized business zones (HUBZone), and service-disabled, veteran-owned small organizations. This allows underserved groups to have a real chance to get awarded lucrative government contracts.
However, it is important to be aware of certain elements of government contracting culture in order to be more effective and get more contracting opportunities.
Understanding Military Culture
The Department of Defense is one of the largest consumers of government contracts in the world? Many companies think that this agency is only contracting with giant companies that supply tanks and missiles.
Remember, the Department of Defense (DoD) supplies the Army, Navy, Airforce, and many other defense agencies. They are very open to working with small businesses and are fully funded for the rest of this year. In fact, they try to reward at least 20% of their contract to Small businesses all across the nation.
In order to be a successful DoD contractor, it is important to have a clear understanding of military culture. One must remember that there are great complexities associated with rank and protocol. For example, addressing someone by their first name in an email is perfectly acceptable in the private sector. However, in the military, it would be an insult not to address a person by their formal title and rank.
Rules Of Timekeeping And Accounting
Government contractors have to maintain very strict schedules when compared to the private sector. Your business must comply with a set standard of rules and regulations when reporting on how many hours worked in a certain period of time.
The Financial Accounting Standards Board (FASB) states that contractors must comply with the following in order to work with the government:
- Federal Acquisition Regulations (FAR)
- Cost Accounting Standards
- FAR agency supplements
Understanding Audits
Your company should be clear on what the DCAA considers the responsibilities of federal contract actors. They include the following:
- timeliness of payments to subcontractors
- documentation of contractor oversight of subcontractors
- documentation of enforcement of flow downs
- documentation of support for subcontractor billings
- documentation of subcontractor reviews
Federal government agencies receive their funding from taxpayer dollars and they need to justify their spending in order to prevent waste. We will help you make sense of government accounting so you can develop a methodology that works for you and your business.
Understand The Chain Of Command
In the private sector, you might have a boss or manager that your report to on a daily basis. The chain of command is usually very straightforward. In the world of government contracting, you might have several people to report to, including managers from other contracting companies. There can be a steep learning curve when it comes to managing the expectations of several government employees at once.
However, there are endless opportunities and one can gain priceless experience by working with several agencies. There are actually many departments in the federal government that contain hundreds of agencies. These places have a wide variety of needs that can easily be filled by small businesses. Working with one agency often opens the door to other departments, making the scope of opportunities endless.
What Information Does A New Business Need to Register For SAM?
It is important that a business understands the government classification system which includes the following codes:
- NAICS
- PSC
- FSC
What is a NAICS number?
NAICS is a six-digit code that stands for the North American Industry Classification System. Many federal agencies post contracting opportunities using the NAICS codes. The NAICS is used as an internal reference that quickly describes what a business does. You want to make sure you have the correct NAICS number to qualify for as many contracting opportunities as possible.
What is the PSC number?
PSC stands for Product Service Code and is primarily used by the Federal Procurement Data System (FPDS) and the General Services Administration (GSA). They are used to describe the types of products, services, and research and development purchased by the federal government.
What is an FSC Code?
Federal Supply Class (FSC) codes are four-digit codes that are used to group products into logical families for supply management purposes. These codes are also used to classify government standards documents into categories, to help manage them more easily. FSC codes are grouped by Federal Supply Group (FSG) numbers.
CAGE Code (Commercial and Government Entity)
This code is five characters and unique to your business. It’s basically your ID code, and government agencies will identify your business using this code. It is a bit like a social security number for your business. If your business includes more than one facility, then you will need multiple CAGE codes. Each location must have its own unique code, and each location must be registered separately with SAM.
How Can A New Business Easily Register For SAM Without All the Hassle?
All this information can at first seem quite daunting at first. We understand that as a small business owner, you have a million things to accomplish on any given day. However, you also do not want to miss out on the honey hole of opportunities provided by the federal government. It is important that you get registered into the SAM directory as quickly and efficiently as possible.
That is why it is a great idea to go to sam. directory. They understand the importance of proper SAM registration and take this confusing process off your hands completely. This website can make sure you are registered in as little as two days. If you still have questions, sam.directory will be more than happy to guide you through this often bewildering maze of registration. The consultation is free and you really have nothing to lose.