Each year, the government awards hundreds of billions of dollars in federal contracts to businesses to meet the needs of federal agencies and the military. The government’s goal is to award at least 23 percent of those contracts to small businesses.
To sell your products or services to the federal government, your business must meet specific requirements. Although the contracting process can seem complicated and overwhelming at first, the government provides lots of information and tips to help you learn to compete as a federal contractor.
Find Sources of Federal Contracts
There are several different ways you can find opportunities to do business with federal agencies and the military. You can use these resources to get a sense of the federal marketplace for the products or services your business offers.
- Sign up for notifications from and search the Contract Opportunities Search Tool on beta.SAM.gov, which is now the official database of federal contracting opportunities.
- Become part of the General Services Administration (GSA) Schedules Program.
- Find contracts through individual agencies’ Offices of Small and Disadvantaged Business Utilization.
- Become a subcontractor by working for another company that already has a contract with the federal government. This is a good way to introduce your company to contracting with the government and to build a track record of success.
Prepare Your Business for Federal Contracting in 8 Steps
Make sure you read through all of the steps in the list before getting to work. This will help you understand your timeline and what to expect from the process. You may also choose to reorder these steps to fit the specific needs and timing of your work.
- Decide if federal contracting is a good idea for your business. Consider factors including whether your company has enough time and resources to invest in the process. GSA’s Vendor Toolbox can help you make the decision.
- Research the demand and pricing for your product or service within the government. Determine demand for your products or service with the Contract Opportunities Search Tool on beta.SAM.gov or the GSA Forecast of Contracting Opportunities Tool. And use the Contract-Awarded Labor Category (CALC) site to get an idea of hourly labor rates in federal contracts.
- Avoid costly errors and potential legal problems by researching the regulations and laws for federal contractors. The Small Business Administration (SBA) offers resources that can help you learn about the responsibilities of federal contractors. You can also contact a Procurement Center Representative (PCR) for assistance and counseling.
- Create a business plan. It should include a marketing plan, staffing details, and a calculation of how much money you expect your business to gain from the contract.
- Look up the North American Industry Classification System (NAICS) code for your industry. You must know your six-digit NAICS code to compete for federal contracts.
- Determine whether your business is eligible for any special labels (set-aside types) or programs. If so, you can compete for additional contracts that are “set aside” by the government for small and/or disadvantaged businesses. You may also receive preferential treatment when competing for contracts, depending on the specific set-aside type(s) you qualify for.
- Register for a Data Universal Numbering System (DUNS) code. You must have a nine-digit DUNS code to compete for federal contracts. The government uses this code to track your company’s credit record. This system is managed by Dun & Bradstreet, which is a private company. Registration is free for federal contractors.
- Register in the System for Award Management (SAM). You must have a SAM account to compete for federal contracts. The government uses this system to store information about your business, including certifications, so it’s important to keep your SAM profile updated. Registration is free.
Note: While learning about contracting, you may see information online about the Central Contractor Registration (CCR), however, this system was replaced by SAM. Currently, contractors only need to register in SAM.