The Small Business Advantage In Government Contracting

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.

The following facts are also very enlightening:

  • 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.

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.

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.

Make Sure You Establish A Good Business Reputation

Try to establish a network of government contacts at various agencies. These contacts can often serve as invaluable advocates for your business. They can also give you advice on how to navigate the bidding process. After you receive awards, make sure you work hard to establish a track record of reliability and success.  

Be Precise And Follow Directions

Naturally, the government is a stickler for following rules and regulations. It is shocking how many bids get tossed out because companies fail to follow basic directions. Be aware of deadlines and do not leave anything black when filling out forms. The request for proposals or RFPs has very specific instructions and you must take everything seriously. Just think of it like filing your income taxes and do not take any unnecessary shortcuts.

The Scope of Services

This is where you will explain how you plan on completing the work or providing the goods that are being acquired. It is the most important part of the proposal.

You must list and provide evidence of core competencies and how you can effectively help the agency reach its desired outcome in the allotted time. This is the time for your business to show your innovation and creativity. You also need to keep in mind that the government does not want to waste money and keep your pricing competitive.

One of the ways to stand out is by identifying your employees and list their qualifications. Make a strong case for why your people are the best at what they do and why the government is in good hands. Remember, you hired this personnel, so no one knows better than you how awesome your team can be at completing the proposal.

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.

Understanding The Marketplace

It might at first feel like working for the government is very unpredictable. Contractors can be affected by a variety of factors such as budget cuts, regulatory pressures, change of administration, and stringent accounting rules.

However, all marketplaces can be volatile and change rapidly according to the whims of consumers. A company needs to make sure that they have a deep understanding of the end buyer and why they want to use their products and services.

This is also true for the United States Government. You will need to develop relationships and cultivate trust that allows you to showcase your competitive advantage. Strategically managing the right relationships might guarantee you the federal government as a solid client that can assure your business of a bright future.

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.

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 important mission of running your company. Stay tuned for this next article in this series.