Understanding The Federal Contracting System
General Services Administration, also known as GSA, is responsible for acquiring the goods and services needed by federal agencies. The United States government basically needs everything and is a super consumer worth $500 billion dollars.
The government uses schedules to purchase goods and services. When there is a need in an agency it is called a schedule award. These are great opportunities for small businesses. A company needs to bid for the award. Once the award is won, the winning bid signifies a signed contract between the business and the government.
This means that learning how to bid for these government contracts is extremely important in order to be successful with this lucrative customer.
What Is A Government Contractor?
The United States Government is made up of several agencies that are in need of a variety of services. These agencies then offer contacts to private companies across several industries to fulfill these needs. Private contractors are vital in helping the government provide services for the welfare and protection of the citizens of the United States. Private government contractors provide goods and services for the following:
- Medical Services
- Utilities
- Construction
- Supplies for various projects
- Engineering
- Defense
- Intellectual Technology
- Energy
These are just a few of the categories that are often contracted out to private independent companies through the awarding of government contracts.
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.
The First Step Is Registering With SAM
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.
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 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.
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.
Innovation Is Key
The government needs to be very careful about how they handle money that is provided by taxpayers. They are tasked with making sure that things go smoothly and no unnecessary risks are taken. This is a great opportunity for a small business that prides itself on finding innovative solutions to age-old problems.
The United States government is open to fresh perspectives and ideas that can streamline their systems or save them money. Do not be afraid to think outside the box when you bid for government contracts. Your new ways of doing things could be just the thing to make you stand apart from the other companies vying for the same opportunity. They are particularly keen to listen to ideas that have been proven in the private sector.
Flex Your Expertise
This is not the time to be shy about your business’s accomplishments. Being a small business does not automatically mean that you are the underdog in the competition.
Bigger is certainly not always better. Small businesses can often prove to be more agile, efficient, and have better response times when compared to their larger counterparts. A larger organization might not have the flexibility to pivot the way it can, which allows small businesses to be able to think on their feet during crises. Smaller companies can also provide more personalized customer services which is something all consumers appreciate.
Narrow In On The Customer’s Needs
At the end of the day, the United States government is a customer just like any other. However, this customer has deep pockets and unlimited needs. A small business can cater to the government by following a strategy in which the customer’s needs always come first. Identify what the government agency’s pain points are and then offer them your innovative solutions to their problems. This type of discipline always wins big points with the government.