Small Businesses Are Given Special Consideration When It Comes To Government Contracts
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.
So, How Does A Small Business Successfully Start Relationships With Key Government Contractors?
The first step is to become familiar with the government marketplace. Do your research and become familiar with the terms that are commonly used in that industry. Then study the different regulations and become certified with the government, if necessary. You could also attend government trade shows to better understand the needs of particular government and state agencies. This will help you identify the needs of prime contractors and any niches that your business could fill.
Networking
Sometimes the hardest step is getting your foot in the door. Networking is extremely important when trying to secure government contracts. The Small Business Administration (SBA) is a great resource and hosts many events throughout the year. These events are usually no cost to business owners and can offer a treasure trove of information about how to obtain contracts from various agencies.
This is your opportunity to shine so make sure you are prepared to present an elevator pitch to better define your company. This is a speech that explains what your business has to offer and how you can help another organization meet their goals. It should be short and simple, no longer than a 30-second elevator ride.
Never Underestimate The Power Of Relationships
As part of understanding your customer, it is very important to build strong relationships within the government agencies. The government is not a giant cold faceless entity. It is made up of people and they will appreciate the opportunity to speak to you face to face. An impressive interview might win you a supporter that will lobby in your favor.
Think About Subcontracting
Subcontracting with a prime contractor rather than the government means that you do not have to worry about the strict rules and regulations that are part of working directly with the government. This is because the subcontractor is actually answerable to the prime contractor, not the government. Luckily, prime contractors are always on the lookout for companies that can help them complete these important government projects. Subcontracting has many advantages for less experienced businesses.
Special Programs
Help is available from special small business programs that encourage participation by small businesses and help these businesses navigate the government contracting maze This includes small businesses owned by minority and traditionally disadvantaged groups. These programs, which are administered by the Small Business Administration (SBA), assist small businesses on how to obtain both large business and government procurements.
Here is a list of websites that are provided by the government to help small businesses obtain contracting information.
FedBizOpps (Federal Business Opportunities): This is the spot for government procurement opportunities of $25,000 or more. Here, buyers for the government are able to publicize their business opportunities by posting information directly to FedBizOpps and commercial companies looking to do business with the government are able to find opportunities solicited by the entire federal contracting community. (http://www.fbo.gov)
Small Business Administration (SBA): This site has a great deal of information pertaining to small businesses as well as SBA-Net, a gateway to opportunities, and a great place to network. It has a direct connection to the CCR database, which is fast becoming the sole database used by government buyers to locate potential small business contractors.
The Federal Government Has Government Personnel That Are Strictly Utilized to Help Small Businesses Be More Competitive In Securing Government Contracts
Here are some examples:
- SBA Procurement Center Representative (PCR): Procurement Center Representatives are often located at a major government buying office, even though they technically work for the Small Business Administration. They will identify items and services that could be produced or provided by small businesses and try to get them “set aside” for small businesses, which means that only small businesses can bid for the contracts.
- Competition Advocate: This person is responsible for promoting full and open competition at high management levels in the major buying offices. They are supposed to challenge overly restrictive statements of work and contract clauses that can prove to be burdensome. They also try to expand competition for items by offering challenges to requirements that are not deemed necessary for the performance or essential physical characteristics.
- Small Business Specialists (SBS): The law requires that every government buying location must have a Small Business Specialist. These specialists work specifically with small businesses to help them to business with that office. Larger government offices might have full staff while smaller offices might only have one part-time employee assigned to this role. Major government buying offices have full-time staff, while smaller offices have a part-time person assigned to that task.
- SBA Commercial Marketing Representative (CMR): Commercial Marketing Representatives keep track of large companies doing work for their departments. These representatives are often the go-to person for fantastic subcontracting opportunities for small businesses.
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.
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.