Register For SAM
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. 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.
Can a Small Business hope to compete for federal government contracts?
The Federal Government is required to reward a certain amount of its contract to small businesses. 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.
What Does This Mean For Small Businesses That Want To Be Government Contractors?
The Federal government is also required to set aside a certain amount of contracts for small businesses. At least 23 percent of government contracts will be awarded to small businesses this year. This means that smaller companies do not have to worry about being outcompeted by large companies with unlimited resources.
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.
What do I need to register for the Sam Directory?
You will need the following :
- A Data Universal Numbering System or DUNS from Dun and Bradstreet
- Your Tax Identification Number or TIN
- A Social Security Number if you are a Sole Proprietor.
What is a DUNS Number?
The Data Universal Numbering System—or D-U-N-S number—was created and copyrighted in 1962 by Dun & Bradstreet. It is a unique nine-digit identifier that has become the standard numbering system to identify businesses across the globe. You can compare the DUNS number as a social security number for your business.
Any contracting opportunity in the System for Award Management (SAM) will require a DUNS number to apply.
What is the difference between a DUNS number and a Federal Tax ID number?
A DUNS number is used for business credit reporting purposes, whereas an EIN is issued by the IRS and used for tax identification purposes.
Are there any other advantages to registering for the SAM Directory besides government contracting opportunities?
A business has to be registered with SAM before it can begin to apply for valuable federal grants.
What is a Federal Grant?
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).
The following are the steps to apply for a grant:
- Step 1: Obtain a DUNS Number
- Step 2: Register with SAM
- Step 3: Register with Grants.gov
Is there any other information that I should be aware of to take full advantage of what is offered by registering for the SAM Directory?
A business must understand 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.
Make Sure You Have Your CAGE Code (Commercial and Government Entity)
This code is five characters and unique to your business. It’s 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 unique code, and each location must be registered separately with SAM.
How Do I Get On A Schedule
Collect all the documents you need and submit them to the GSA. A procurement officer will review your paperwork and either approve or decline your submission. This process requires some attention to detail.
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 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.