The United States Government Is A Very Powerful Client With Deep Pockets
The Federal government usually spends around 500 billion dollars a year on goods and services. This makes the U.S. government an extremely attractive client. There are few other organizations with this type of spending power and clout. That will still hold true in the coming year despite the rocky start to this decade.
The government also tends to buy goods and services in bulk. If your business has the infrastructure to handle large orders, then the government can help you grow substantially at an accelerated pace.
Government agencies also buy goods and services in large quantities. Large orders can be a double-edged sword for small businesses. However, if managed correctly, they can help you grow substantially and rapidly. You also should be aware that working for such a large and powerful client is not without challenges.
Understanding The Marketplace
It might at first feel like working for the government is very unpredictable. Contractors can be affected by a variety of factors such as budget cuts, regulatory pressures, change of administration, and stringent accounting rules.
However, all marketplaces can be volatile and change rapidly according to the whims of consumers. A company needs to make sure that they have a deep understanding of the end buyer and why they want to use their products and services.
This is also true for the United States Government. You will need to develop relationships and cultivate a trust that allows you to showcase your competitive advantage. Strategically managing the right relationships might guarantee you the federal government as a solid client that can assure your business of a bright future.
Government Funding
As we have stated before, the United States government is one of the wealthiest and most powerful clients in the world. However, no one has unlimited resources. Administrations change and that can often mean a shift in funding priorities. For example, if the government is into energy conservation, that might mean a lot of contracts for those who develop energy alternatives. If a new administration comes into power that values different things, then the funding for alternative energy initiatives might be decreased.
One of the best ways to combat this is by supporting politicians that understand and promote your type of business. It is important to keep an eye on the political atmosphere and make sure that your voice is heard.
Department Of Defense
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 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. Companies can go to https://business.defense.gov/Small-Business/DoD-Small-Business-Offices/ to find out more information about contracting and subcontracting opportunities.
Innovation and Technology
We must remember that some great innovations in technology actually came out of this branch of the government. This includes the internet, which is a vital part of our lives and has changed the way we look at the world. The Internet was initially a DARPA, the Defense Advanced Research Projects Agency project, as well as GPS, the cell phone, the computer mouse, and drones.
Being a defense contractor meant that you are on the cutting edge of tomorrow’s technology. This is not only a noble pursuit, but it allows you to gain a distinct advantage over other civilian tech companies.
Example
The United States Army has big plans for developing its air and missile defense system to be one of the best in the world. Lieutenant General James H. Dickinson, commanding general of the U.S. Army Space and Missile Defense Command/Army Forces Strategic Command, said, “Our vision is that the AMD force of 2028 will provide the combatant commanders with a flexible, agile, and integrated AMD force capable of executing multi-domain operations.”
The army is particularly interested in modernizing its radar technologies. This is a fantastic opportunity for innovative small businesses to step up to the plate and help the army build some new prototypes. The army is very open to working closely with new businesses in order to develop key technologies that will streamline operations in the future.
How Do You Get Started Working With The Government?
SAM stands for System Award Management.
In order to do any business with the federal government, you must register your business in the System for Award Management. The government will not hire any type of business that has not registered in the SAM directory.
We have an article on our site, Everything You Need to Know About SAM for Small Businesses, that gives you important information about this process.
As a smart entrepreneur, you have already used our site to register in the SAM directory. Congratulations on taking this important first step to become a government contractor.
Make Sure You Get A 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.
Registering With The SAM Directory Also Has Other Important Advantages
You must register with the SAM directory in order to apply for government grants.
A grant is a way the government funds your ideas and projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and many other programs listed in the Catalog of Federal Domestic Assistance (CFDA).
A grant is different from a loan in that it is money that your business does not have to pay back. So, registering for the SAM directory actually gives you access to free money!