Government Contracting Trends For Small Businesses In 2021

Just like every other industry, the pandemic has had a profound effect on the government contracting industry. However, government contracting still can promise a profitable future for small businesses. The Consolidated Appropriations Act, 2018 has provided a large amount of funding for many government programs, including the military. This allowed for $500 billion dollars to be used for new government spending, which is very good news for many private contractors that work for the federal government. 

The United States Government Is A Very Powerful Client With Deep Pockets 

The Federal government usually spends billions of 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. 

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. 

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. 

Changes In Defining Small Businesses 

In 2020 the Small Business Runway Extension Act allowed governments to calculate small businesses in a different way so many more companies could qualify for small business government contracts. This means more businesses than ever can be eligible for lucrative government set asides. 

Reforms In Security Clearances 

There will be a complete overhaul of the Department of Defense’s clearance process which will actually affect all government agencies in 2021. 

It is important for government contractors to be able to pass several security clearances. A background check on your company and employees is often a condition of employment. 

This will include the following: 

  • Employment 
  • Education 
  • Criminal Records 
  • Credit History 
  • Motor Vehicles and License Records 

You should make sure that all your personnel and employees are able to pass this intensive screening. If there are any issues, make sure the government is made aware of them ahead of time, so that an explanation can be given. For example, if you are participating in programs that rehabilitate criminals by giving them jobs. Transparency is often the best way to deal with situations that might cause an issue in obtaining lucrative government contracts. 

Blockchain 

Blockchain allows for the distribution of data on multiple platforms at the same time. It grows as a new set of recordings, referred to as blocks, are added to it. All the blocks contain timestamp information linking it to previous blocks, thus creating a chain. This allows for no data block to be altered without the alteration of all the blocks that came before it. 

The government is interested in blockchain data management because it is decentralized and allows for more security for transactions. This usually also means that operating costs can be lower. The United States government became interested in blockchain technology in 2016 and it should be a very lucrative avenue for many small businesses.  

Innovation OTS is a five-year program that will continue in 2020. It aims to provide opportunities for nontraditional government contractors to work with the Department of Homeland Security developing new technologies to address upcoming threats. In 2020,  small business contractors can take advantage of Innovation OTS to form government partnerships and provide innovative technologies. 

Cyber Security 

As the world becomes increasingly higher-tech, security breaches are more likely to be in data management than on the battlefields. It is very important for the government to stay several steps ahead of those who wish to exploit undiscovered vulnerabilities in our systems. This is why cybersecurity will be a very lucrative area for government contractors. This is particularly true in 2021, which might see unprecedented dangers as new systems are being installed in several federal agencies.. Cybersecurity will be used to protect voter databases and voting machines. 

Cybersecurity is also going to be a big part of government protection when it comes to cyberattacks on supply chains. Contractors that can help manage these constant threats to government security will be in high demand. 

The Department Of Health And Human Services 

The Department of Health and Human Services states its mission “Is to enhance the health and well-being of all Americans, by providing for effective health and human services and by fostering sound, sustained advances in the sciences underlying medicine, public health, and social services” This is an agency whose need has only increased due to the current pandemic of Covid-19. 

This agency is a great contracting source for small businesses that provide healthcare services and products. Go to https://www.hhs.gov/grants/contracts/index.html for more information. This agency also does a lot of partnerships, so it is a great way for a small business to get their foot in the door with many other types of government agencies. 

The Government Will Always March Forward 

The Federal government will soon be back on track and in much need of goods and services provided by small businesses. Many agencies, such as the Department of Defense, are fully funded for the year. and will be moving forward with their contracts immediately.  

To do any business with the federal government, you must register your business in the System for Award Management directory. The government will not hire any type of business (large or small) that has not registered in the SAM directory. 

Please read one of the helpful blog articles on our site like Everything You Need to Know About SAM for Small Businesses.  These blogs will help give you all the information you need to understand how we can help make the process very easy for you. Sam Directory will happily guide you through this often confusing process. With our help, you will be able to be on the path to government subcontracting quickly and efficiently.