The United States Government spent over $594 billion dollars in FY 2019 on various goods and services. Each year, thousands of contracts totaling billions of dollars bypass businesses that do not know about or understand the government procurement processes.
Begin by identifying your North American Industry Classification System (NAICS) code and determine the small business size standard for your code. The government sets small business size standards for each industry based on the corresponding NAICS code. Each solicitation usually contains specific NAICS and size standards for that particular procurement. The US Small Business Administration (SBA) is responsible for setting the small business size standards. The links above provide both NAICS/SIC codes and SBA size standards.
Your business must also have a Social Security Number (Sole Proprietor only) or a Federal Tax ID number provided by the Internal Revenue Service and a Dun & Bradstreet (D&B) D-U-N-S number for government contracting purposes, which can be obtained at no cost by calling 1-866-705-5711, or by clicking on the link above.
Now you are ready to register with the System for Award Management (SAM) in order to become a government contractor. SAM is the primary vendor database for the federal government that maintains electronic payment information. SAM is a free website which consolidates Federal procurement systems and the catalog of Federal Domestic assistance.
Micro Purchases are defined as any purchase of $2,500 and below and can be made without obtaining competitive quotations. Purchases in this category are open to small and large businesses. More and more of the smaller dollar requirements are being purchased via a credit card or Government Procurement Card (GPC). If you accept Visa or MasterCard, please let your government customers know. If you want to accept these cards, you may want to investigate this option with your bank. Almost 97 percent of the purchases under $2500 are now made with the GPC.
Simplified Acquisition Procedures (SAP) apply to acquisitions between $2,500 and $150,000. The majority of these purchases are set-aside for small businesses but there are exceptions. The business submitting the successful quotation under these procedures is issued a purchase order and performance of the order constitutes contract acceptance.
Purchases over $150,000 are considered large purchases that require a sealed bid process. Sealed bidding begins with an IFB (invitation for bids) that contains the information needed in order to prepare and submit a bid. All bids are submitted on a standard form that must be received by a certain time and date. The bids are opened in public and the contract will be awarded to the responsive and responsible bidder that offers the best value to the government.
As used above, the term “responsive” means that you must quote in accordance with the terms of the solicitation, with no exceptions. The term “responsible” refers to the determination of your responsibility to perform in connection with a particular solicitation when you are the apparent low bidder. To be found responsible, you must be able to demonstrate (1) adequate financial resources; (2) compliance with the delivery requirements; (3) prior satisfactory performance; (4) a satisfactory record of integrity and business ethics; (5) adequate management and technical skills; (6) adequate facilities; and (7) eligibility to otherwise receive an award.
Regulations concerning aspects of Federal procurement made with appropriated funds are published in the Federal Acquisition Regulation (FAR). The FAR is designed to unify all procurement practices, forms, and requirements for the federal government. It also allows each major agency to issue supplements containing regulations unique to that agency (i.e.: DoD, NASA, EPA, etc.). For assistance in developing a working knowledge of the FAR contact your supporting GCAP Counselor.
We have compiled a great list of resources to help you in your federal contracting efforts. These resources include websites like Federal Business Opportunities and Wide Area Workflow. Take a look at these resources.
It is important that you do not neglect the multi-billion dollar secondary market of subcontracting. You should investigate potential opportunities with prime contractors. Many of the federal government’s requirements may be beyond the scope of a single small business and prime contractors are encouraged to subcontract and team with small business concerns. Prime contractors can be found at DoD and SBA’s subcontracting website.
Emergency & Disaster Recovery
There are many contracting opportunities that arise from disaster recovery operations. Emergency Responders need vendors that can clear debris, provide facility support services, furnish necessary supplies, and much more. In the aftermath of a disaster, different aspects of the recovery operations may be led by the federal government through FEMA, state government response programs, city or county emergency response programs, or non-profit organizations like the American Red Cross. See the important steps that you must complete to be prepared to participate in any of these opportunities.