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If you want to sell your services to the government, you need to know how to become a government contractor. The United States government is the largest spender in the world, awarding billions of dollars in contracts each fiscal year. Becoming a government contractor may sound like a daunting task, especially to a small business owner. Don’t fret—we’ll break down everything you need to know from registering your business to writing your bid.
The first step to becoming a government contractor is an obvious one: own a business. The better established your business is, the better. Small or new business owner? We’ll cover what opportunities may be set aside for small businesses and how to best sell your new business later. Decide what goods and services your business will offer. Then, you’ll need to decide your legal structure. Once this is complete, you can register your business.
It’s very important that each of these registrations are completed. Otherwise, you may not qualify to bid on government contracts.
You must register for your Employee Identification Number (EIN) through the IRS. Also known as a Federal Tax Identification Number, your EIN is a number used to identify your business. It is free to register, and you can apply for your EIN online on the IRS website. To apply, your principal business must be located in the United States or U.S. Territories. Only a responsible party may apply; this must be an individual, not an entity. The person applying also must have a valid Taxpayer Identification Number, such as an SSN, ITIN, or EIN.
You’ll also need to acquire a DUNS number. Your DUNS number is a nine-digit identifier and unique to your business, generated by the credit bureau Dun & Bradstreet (D&B). Similar to an EIN, your DUNS number is used to identify your business. However, your DUNS number is used for business credit reporting, while an EIN is used for tax identification. Your DUNS number is connected to your business credit profile created by Dun & Bradstreet. A DUNS number assists in establishing your business’ creditworthiness, safeguard your creditworthiness, and secure you longer terms with suppliers. Applying for your DUNS number can be done online on the D&B website.
The NAICS was developed to serve as the standard business classification system for North America. This system is used by federal statistic agencies for the classification, collection and analysis of businesses. Data, in relation to the economy of the U.S., is then published. The NAICS was created by the Office of Management and Government and acts as a self-assigned system. This means that you select the code that best suits your company. If you offer multiple services, you may want to consider having multiple NAICS codes.
NAICS codes can help you in a variety of ways. Sometimes, government contracts will be posted to any business within a given NAICS code. The government has set a target goal of 23% of all contracts to be awarded to small businesses. In order to be federally recognized as a small business, you’ll need an NAICS code. Your NAICS code may also be used for incentive programs or tax and insurance purposes. You’ll also be able to classify your customers by NAICS codes. You’ll notice that many of your clients are within a particular NAICS code. Thus, you’ll know which industries to focus your marketing on.
The System for Award Management (SAM) is a database including every entity registered to do business with the federal government. Federal government agencies then use SAM to find contractors.
As part of registration, you will be assigned a Unique Entity ID. This may sound unfamiliar to you, even if you’ve done previous research. This would be because the Unique Entity ID has recently replaced the need of a DUNS number for registration with SAM. Having a DUNS number is still important, but not required for SAM registration. Your Unique Entity ID serves as your business’ identifier for the federal government. Registering with SAM allows you to certify that you operate a small business. Thus, you will be eligible for contracts reserved for small businesses.
The U.S. Small Business Administration (SBA) has a Size Standards Tool available online. This tool helps to determine if your business classifies as a small business. You may also be eligible for other reserved contracts, such as those reserved for women or veteran owned businesses. The SBA website is a great source for discovering what sort of contracts you may be eligible for.
Certifications vary by industry, but their importance and value remain the same. Government contracts will often request the certifications the business and staff should have. Sometimes, these contracts will list specific certifications that are either highly desirable or necessary to be awarded the contract. The more certifications, the better—there’s no harm in applying for as many as you’re eligible for. Certifications prove your credibility. For a newer business, it may give you an edge over more established competitors. We suggest researching what certifications are most often requested within your sector.
Next, you’ll need to locate a government contract you’re interested in bidding for. The federal government signs over 11 million contracts a year, so there’s no shortage of options.
A free to use option for finding contract opportunities is the SAM website. Here, you’re able to search by something as simple as, for example, medical supplies. Or, you can search by a NAICS code. SAM also provides several filtering options for your search. You may want to filter your search to only include contracts for set asides, like contracts for small businesses. You can also filter by place of performance, date and even the awarded contractor. Locating the right contract for your business can be incredibly time consuming.
At Hudson Outsourcing, we are currently in the process of creating a unique portal for our U.S. clients. This portal will be a more streamlined procurement experience compared to SAM. Our portals are being designed to save you time. The portals will be sector-specific; we do the filtering for you. They will source private and public opportunities, as well as RFPs found only on our portals. These portals will be live soon, so be sure to check back in the future.
When a contract appeals to you, make sure to carefully read its RFP. You’ll want to ensure that your business qualifies for bidding and can fulfill the contract in its entirety. Make sure that your bid can be drafted, reviewed and potentially drafted again before the submission deadline. You don’t want to waste time pursuing an impossible bid.
Once you’ve decided on your contract, you’ll need to write your proposal. If this is your first time reading through an RFP, it may be difficult to digest. If you have questions, the buyer will accept questions up to a posted date. Don’t hesitate to ask questions to clarify something you do not understand or would like clarification on. It’s absolutely imperative that you carefully read the RFP and respond thoroughly. If you fail to respond to a portion of the RFP, your proposal may be deemed noncompliant. Incorrect formats, incomplete forms or going over word count may also result in noncompliance. Writing proposals can be very time consuming, especially for someone unfamiliar with the procurement process. This is the “hard part”, and the most important part. A low-quality proposal could cost you a contract. For this reason, you may want to consider hiring a Bid Writer.
Here at Hudson Outsourcing, our Succeed Division handles bid writing across all sectors. A Bid Writer will break down the RFP document for you, determine how to approach your responses and write it for you. Our writing staff is well versed in the procurement process and what a quality proposal looks like. You’ll never be out of the loop with the continuous flow of communication between the writers and you. Should you decide you want to grow your knowledge on the bidding process, Hudson also offers an educational course. This course, Tender VLE, will take business owners through every step of the procurement process, from what a bid is to how to compose the perfect response. Tender VLE will be available in the U.S. on August 11th, 2022.
Where you submit your proposal will differ from contract to contract. This being said, it’s very important that you take note of how the buyer has requested to receive the proposal. Many proposals now are submitted to online portals. Other times, you must mail the proposal or deliver it in person. How and when your submission must be received can change your timeline for writing the proposal. If it has to be mailed, you should consider the time it will take to be delivered. If it has to be submitted via a portal, you should consider day-of technical errors or issues. For these reasons, you should always aim to submit before the deadline. Proposals posted after the deadline will not be considered.
Once you’ve submitted your proposal, it’s a waiting game. This can be the most stress-inducing part of the procurement process. Never consider a lost bid a failure. Read the feedback provided regarding why you were not selected and consider why the awardee was chosen. Use this knowledge on your next bid. Do you have a perfect bid, but you’re not confident in your writing abilities? Hudson Succeed is, and we’re happy to provide guidance.
Not got the time to write winning bid responses in-house? Don’t worry, our Bid Consultants can help. We provide three bid and RFP writing support services.
Our RFP Writing service is the perfect solution to ensure that you submit a high-quality bid, even when you’re busy. Our 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.
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.
Do you need help with preparing a bid proposal? Proposal Ready can help businesses that are new to bidding or those in need of rejuvenating their content. Our Bid Consultants will create:
Feel free to reach out to us for a quote on our bid writing services. We wish you luck on your bidding journey!
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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.
