What Is Government Contracting?
Government contracting is when specific government agencies contract with private companies for specific goods or services. The agencies usually put out a contract or often a request for proposal (RFP) and various companies can place bids for the project. Once an agency selects a particular business, a contract is signed, and that business is now considered a government contractor.
The United States Government Is A Very Powerful Client With Deep Pockets
The Federal government usually spends around 500 billion 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.
What is the Sam Directory?
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 large or small that has not registered in the SAM directory.
Why Does My Business Need To Register For The SAM Directory?
What if I told you that there is a large revenue base for your business that is often untapped in many areas and therefore might have very little competition in your field?
You might be wondering if this magical source of revenue lives in the land of rainbows and unicorns. The good news is that this is nothing more or less than the United States Federal Government, one of the largest most powerful purchasers of goods and services in the entire world. Our Federal Government provides a lucrative business opportunity that no small business can afford to ignore.
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.
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. Lastto 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.
Small Business Administration Certifications
A Small Business Administration certification is a great way for your business to stand out in the marketplace. Certifications can help you gain access to specialized funding and scholarships, allow you to compete for set-aside contracts, and can be a great bonus to potential clients. Here are some certifications to consider for your small business:
- Women-Owned Small Business Federal Contract Program (WOSBs)
- 8(a) Business Development Program
- The Service-Disabled Veteran-Owned Small Business Concern Procurement Program(SDVOSB)
- Historically Underutilized Business Zone Program (HUBZone)
Why Work For The Government?
There are many compelling reasons to work for the Federal Government. We will go into in-depth detail about how a small business can benefit greatly from being a government contractor.
Government Contracts Offer Security
The recent pandemic has just shed light on how things can change in the small business marketplace in the blink of an eye. Businesses that were doing quite well had to rethink their business models quickly to survive.
One of the best ways to expand your business and have a secure lifeline in unexpected rough times is to become a government contractor. The United States government is one of the most powerful consumers of goods and services in the world. This is a 500 hundred billion dollar industry that is required to set aside at least 23 percent of these contracts specifically for small businesses.
Are there any other advantages to registering for the SAM Directory besides government contracting opportunities?
A business has to be registered with SAM before they 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).
How Do You Get Started Working With The Government?
SAM stands for System Award Management.
In order 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.
Registering With The SAM Directory Also Has Other Important Advantages
You must register with the SAM directory in order to apply for government grants.
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).
A grant is different from a loan in that it is money that your business does not have to pay back. So, registering for the SAM directory actually gives you access to free money!