The Small Business’s Path to Winning Federal Government Contracts

By: Susan Crotts, NC PTAC, TRIAD Region

As businesses become government contract ready, they have much to learn and accomplish. A new business concentrates on developing revenue streams and making a profit. This typically takes several years. At the same time, they develop systems, methods and practices to assure financial stability and profitability.

As a business matures, it may seek to diversify their revenue stream with government contracts. The business must assess whether the products or services it sells are something the government buys. The market must be researched, competitors and potential prime or subcontracting partners identified, and strategies for forming relationships with government buyers must be developed and implemented. This requires significant resources including manpower and time.

As a business learns that there is a market for its work products, it must take preliminary steps to qualify as a government vendor. These steps involve registering in the Federal vendor system, SAM and state and local vendor systems. Once registered in SAM, a small business may benefit from applying for federal small business certifications, which involve economic development programs designed to include various underutilized categories of small businesses in government contracts. Sub-categories include: Veteran Owned, Service-Disabled Veteran Owned, HUBZone, Disadvantaged and Women Owned. Companies must apply for verification of their status under a designated category.

The annual goal for small business participation in federal contracts is 23%. Within the small business program, the various categories have goals ranging from 3% -5% annual participation. To help the government reach these goals, they utilize the bidding practice known as “set asides” to restrict certain bid opportunities to small businesses or the economic development program sub-categories. As small businesses look for bidding opportunities, this understanding is key to finding ways to break into government contracting. While these certification programs, conducted by the Small Business Administration, are advantageous to vendors, performance history is a primary qualification when being evaluated for a government contract award.

When a business has become government contract ready, there is much to learn about bidding. Bid types such as Request for Quotes, Request for Proposals, Invitation to Bid, etc. have different requirements and standards of award. Bid documents can be eighty-five pages long. Within a bid document there is essential information the contractor needs to understand to submit a successful response. Knowing how to allocate costs and categorize expenses to writing a technical proposal are essential skills. is the federal system that links vendors to bid opportunities. Vendors create searches and sign up for alerts under their NAICS codes. The North American Industry Classification System is used to link bid opportunities to vendors whose codes match the bid. Companies often have more than one NAICS code to reflect the breadth of their work products. A deluge of notices may reach the company. A system with designated roles and responsibilities in the bid receipt, evaluation for go or no go is needed. Also, and a strong proposal team with experts in finance, subject matter, writing and editing is a must for success. A proposal may take eighty hours or more to develop.

The path to winning federal government contracts is a marathon, not a sprint. PTAC is your resource to provide training and guidance to help you develop along the way and succeed in achieving your goals.

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