Can my small business bid on government contracts?

It’s fairly common to question how to bid on government contracts as a small business. The process may seem daunting and complex from the outside. However, this isn’t necessarily the case.

The U.S. government purchases billions of dollars’ worth of products and services annually. Many small businesses want to become a vendor to the government but don’t know how. Many businesses question if it’s even possible to bid on government contracts as a small business. This is because the contracts can be worth upwards of tens of thousands of dollars. Due to this, many wrongly assume that only big companies can apply.

There’s no denying that there is a fairly rigid process in order to qualify to do business with the government. However, once this is passed, you can get a slice of the action.

What defines a small business?

By law, a proportion of government contracts must be awarded to small businesses. The government’s goal is to allocate 23% of all government contracts to small businesses. So, it’s important to understand what constitutes a small business in the eyes of the government.

To be eligible to apply for government contracts reserved for small businesses, you must meet certain size requirements. These are set by the SBA (Small Business Association). These standards define the maximum size that a business can qualify as a small business for a government contract. For example:

• Most manufacturing companies with 500 employees or fewer
• Non-manufacturing businesses with average annual receipts under $7.5 million

It’s important to bear in mind there are exceptions by industry. Take a look at the Table of Small Business Size Standards to find the code relevant to your business. You can look at the SBA’s Size Standards Tool to see if your business classifies as ‘small’ for government contracts.

The qualification process

DUNS number

To bid on government contracts as a small business, you will need to have your organization’s DUNS number. This can be found on the Dun and Bradstreet website. A DUNS number is a unique nine-digit identification number for the physical location of your business.

When registering for your DUNS number, you’ll need to have the following to hand:

• Legal name
• Your businesses headquarters name and address
• Doing business As (DBA) or the other name by which your business is recognized
• The physical address, city, state, and ZIP
• Mailing address (if different from headquarters and/or physical address)
• Telephone number
• Contact name and title
• Number of employees at your physical location
• Whether you’re a home-based business.

NAICS code

Before you start bidding on government contracts, you’ll need to match your services or products to a NAICS code. NAICS stands for the North American Industry Classification System. A NAICS code classifies businesses based on a particular service or product they supply. A business will have a primary NAICS code, but they can have multiple NAICS codes if they sell multiple products/services. To find your NAICS code, view the list at the U.S. Census Bureau.

Register with SAM

To participate in government contracting, you must register your business with the federal government’s System of Award Management (SAM). If you don’t, you won’t be eligible to bid on federal, state, or local government contracts.

Becoming a registered vendor with SAM eliminates the need to enter the same information over and over. This streamlines the process, increasing efficiency when doing business with the government. To register for SAM, you’ll need a couple of things to hand, including your:

• DUNS number
• NAICS code.

Maintain compliance

In order to bid on government contracts as a small business, you’ll need to maintain compliance. This means you must comply with all regulations and laws of the federal government’s purchasing process. This is governed by the Federal Acquisition Regulation. You must comply with this when bidding for government contracts.

Research

If you’re wanting to bid on government contracts as a small business, you should do your research. Find out what you can about the federal marketplace and how they prefer to make purchases. This can help you tailor your bid to their desired requirements. Remember, each buyer will likely be different.

You can research which government agencies aren’t yet meeting their 23% target. If you’re a small business that can supply to that government agency, this is good news. You can respond to a request for proposal (RFP), and you’ll almost be guaranteed preferential consideration over bigger businesses.

So, now you know what you need to do to be eligible to bid on government solicitations. Next, you may be wondering where to find contracts for your small business.

How to find government contracts

SAM.gov

Federal solicitations that are available for contractors are listed on the beta.SAM.gov site. Government agencies are required to use SAM to advertise all contracts over $25,000. This is a good place to start when looking to bid on government contracts as a small business. This site also allows you to view previously awarded contracts which can be useful when preparing your RFP response.

Dynamic Small Business Search

The Dynamic Small Business Search (DSBS) is a database that government agencies use to find small business contractors for contracts. It is a website that’s maintained by the SBA. The information you provide when you register your business with SAM is uploaded to the DSBS. So, it’s therefore important to create a comprehensive business profile as it could lead to your business being contacted. The DSBS can also be used by small businesses to find other small businesses to work with.

GSA Schedules

If you’re wanting to bid on government contracts as a small business, looking at the GSA schedules can help. The U.S. General Services Administration (GSA) is a government agency that connects vendors with government buyers. If you secure a solicitation with the GSA, it’s known as getting onto the GSA Schedule. This means you’re approved to do business with the government.

To get in on the GSA Schedule, you may want to report for a Past Performance Evaluation from Open Ratings. This will assess your performance relative to other businesses in the same industry. It’s often required as part of the bidding process as a vendor. You must register and provide the names and emails of 6 – 20 of your customers in order to do this.

Subcontracting opportunities

There is another form of government contracts for small businesses to explore, and that is subcontracting. Subcontracting opportunities involve negotiating contracts with current government contractors. This is done in order to complete a portion of work designated by the prime contractors.

Subcontracting government contracts can be a lucrative opportunity for your business. It also presents the opportunity to learn more about government contracting before attempting to bid on prime contracts. Subcontracting will also allow you to build up contract experience which is essential when applying for any solicitation. This is because buyers will likely ask for 2 – 3 past contract experiences your business has fulfilled. This can help you get an upper hand and ease you into the world of procurement.

To summarize, there are plenty of opportunities to bid on government contracts as a small business. You will need to get your affairs in order, registering with the right sites. However, once you’ve done this, you can start looking for contract opportunities. These contract opportunities can then help your business to grow.

If you need any assistance with your response, an RFP consultant can help. They can advise you on the best responses, or even write the bid for you. It is something to consider if you’re new to the bid process and want to have the best chance of succeeding. If you’re seeking assistance with your RFP cover letter, you can download our template for free.

Our services

RFP Writing

Our RFP Writing service is the perfect solution to ensure that you submit a high-quality bid, even when you’re busy. Our RFP Writers will break down the solicitation documents, allowing you to see what the bid and the contract involves. This will help to ensure that you have all the specified evidence and meet the requirements of the contracting authority. Our RFP Writers will then craft persuasive, high-quality responses, attach supporting evidence and even submit the bid on your behalf. Upload the solicitation documents for a free quote.

RFP Mentor

Have you already written a bid but need a second pair of eyes to review your work? Our RFP Mentor service will do just that. Simply send over your bid responses and the solicitation documents. Our writers will then assess your work, ensuring that your responses are in line with the specification. They will also check for any spelling or grammar errors. You can then submit your bid with confidence. Upload your work for a free quote.

Proposal Ready

Do you need help with preparing a bid proposal? Proposal Ready can help businesses that are new to tendering or those in need of rejuvenating their content. Our Bid Consultants can offer you proposal writing services, creating:

• 3 designed and company branded case studies
• 5 company branded and professionally designed resumes for key personnel
• 1 company branded bid proposal credentials document that can be used to respond to future RFPs.

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Because the information on this blog is based on Hudson Outsourcing LLC’s own opinion and experience, it should not be considered professional financial investment advice.  The ideas and bidding strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  Hudson Outsourcing LLC’s thoughts and opinions will also change from time to time as the market changes and as Hudson Outsourcing LLC develops.