Special Consideration
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 following is set as statutory rules to give small businesses a fair chance in the marketplace:
- 23 percent of prime contracts are reserved for small businesses;
- 5 percent of prime and subcontracts are reserved for small disadvantaged businesses;
- 5 percent of prime and subcontracts are reserved for women-owned small businesses;
- 3 percent of prime contracts are reserved for HUBZone small businesses;
- 3 percent of prime and subcontracts are reserved for service-disabled veteran-owned small businesses.
How Do I Know Government Contracting Is Right for My Company?
There is very little certainty in business. Having a powerful client that is known for paying its bills on time, like our Federal Government, is a great asset.
Also, many of your competitors might be dismissing the idea of being a government contractor as being too much trouble. This means that there could be surprisingly little competition in some spaces. Their shortsightedness can be your company’s advantage to get ahead and obtain some very lucrative contracts.
Subcontracting Opportunities
Being a federal contractor can be an extremely lucrative and rewarding experience. It can offer amazing opportunities for your business. However, it is understandable if you are a little hesitant to dive into the world of the federal government head first. You honestly might not feel like your business is ready to bid on federal competitively as of yet. This is the perfect situation to explore subcontracting opportunities. Being a subcontractor gives you valuable experience of what it is like to be a prime contractor. It will also greatly enhance your qualifications to become a more viable option for the government as a prime contractor.
Important Laws
Section 8(d) of the Small Business Act and, in most cases, FAR 19.7 incorporate several laws regarding small business subcontracting. These laws require prime contractors to provide subcontracting opportunities to small businesses. This includes:
- HUBZone small business
- Small disadvantaged business
- Women-owned small business
- Veteran-owned small business (VOSB)
- Service-disabled VOSB
So the government requires that on contract over $500,000 or a million when constructing a facility that is public, that large prime contractor must turn in plans for subcontracting percentage goals for small businesses, HUBZone small businesses, small disadvantaged businesses, women-owned small businesses, VOSB, and service-disabled VOSB. These plans must describe in detail the methods used to ensure that small businesses have a fair chance to compete for government contracts. This is required to be submitted for review prior to the award of any government contract that meets this threshold. If a prime contractor fails to comply with this regulation then they might be subject to liquidated damages or termination for default.
This rule does not apply to contracts that are under the prescribed dollar amount, contracts that are going to be completed fully outside the United States of America, contracts that have no subcontractor opportunities, and small businesses.
Does Your Business Qualify For Set-Asides?
If at least 51% of your business is owned by a minority, woman, or veteran then your business might be eligible for set asides reserved for underrepresented groups.
Does your business meet the following criteria:
- A business must meet small business size standards.
- At least 51 percent of a business must be owned by U.S. citizens.
- The business officers must show good character.
- The business must demonstrate the potential for success.
- There are separate eligibility requirements for businesses owned by American Indians, Native Alaskans, Native Hawaiians, Women, veterans or Certified Development Companies.
- At least 51 percent of a business must be owned, controlled, and managed by one or more person(s) who meet the SBA requirements for being socially disadvantaged and economically disadvantaged.
Certification and Education
Usually, the agency sets specific educational and certification guidelines when they post a request for proposals or RFP. These requirements can vary depending on the type of work that is needed. However, there are some steps that any business can do to become more attractive for government contracting work.
Can a Small Business really hope to compete for federal government contracts?
The Federal Government is required to reward a certain amount of its contract to small businesses. In fact, last year the Federal government awarded 25% of its contracts to small businesses.
In 2018 the U.S. Small Business Administration announced that the Federal government awarded a total of $105.7 Billion worth of contracts for goods and services to small businesses. This marks the first time that more than $100 billion dollars have been awarded to small businesses and marks a 5 million dollar increase from the previous year.
The following facts are also very enlightening:
- In FY18, the federal government exceeded the service-disabled-veteran-owned small business and small disadvantaged business goals and the prime contract dollar awards in all small business categories increased from previous years.
- The federal government also exceeded its subcontract goals for awards to small businesses and women-owned small businesses and awarded more than $79 billion in subcontracts to all small businesses.
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.
SAM Directory Can Help
SAM stands for System Award Management.
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.
Remember, registering for the SAM directory gives a business automatic entry into the extremely lucrative marketplace of the federal government. It is also a crucial step for applying for rewarding government grants that can help your business reach its full potential. Let us, the professionals at SAM Directory, make sure that you do all that is needed to not miss out on this important opportunity. We will make certain that your application is processed quickly and efficiently so you can start being a federal contractor as soon as possible. We remove this hassle so you can go about the