Have you ever wondered how to become a government contractor? Securing contracts with the federal government is a smart way to grow your company by expanding market reach and diversifying your income stream. Becoming a government contractor can seem daunting from the outside, but with the proper research, preparation, and guidance, it doesn’t have to be. Below, we’ll cover the basic steps any potential government contractor must follow to get started.
Getting Started as a Government Contractor
Determine Your Eligibility
If you’re wondering how to become a government contractor, it’s helpful to know if your business provides goods or services that the federal government needs. And the odds are in your favor. That’s because the United States government procures goods and services across nearly every industry imaginable, including all the following:
- Agriculture, forestry, fishing, and hunting
- Mining and quarrying
- Oil and gas extraction
- Utilities
- Construction
- Manufacturing
- Wholesale trade and retail trade
- Information, finance, and insurance
- Real estate, rental, and leasing
- Professional, scientific, and technical services
- Management, administration, and support
- Waste management and remediation
- Education
- Healthcare and social assistance
- Arts, entertainment, and recreation
- Accommodation and food services
- Public administration
No matter what your industry is, all potential government contractors must first become officially registered in the System for Award Management (SAM).
Get Registered
All government contractors must be properly registered in the System for Award Management (SAM) at SAM.gov. SAM is the government’s official procurement database, and businesses must be registered with SAM before they can bid on or be awarded a government contract or grant. To be eligible to bid on government contracts, you’ll need a Unique Entity Identifier (UEI), a 12-digit alphanumeric code that you will receive once you’ve registered with SAM. To register with SAM, visit the Federal Award Management Registration’s official website.
Once registered with SAM and assigned UEI, you’ll need to find your North American Industry Classification System (NAICS) code. NAICS codes are self-assigned six-digit identifiers used to classify businesses based on the industry in question and the product or service provided. Each part of a NAICS code provides a specific piece of information:
- The first two digits indicate the economic sector
- The third digit indicates the economic subsector
- The fourth digit designates the industry group
- The fifth digit specifies the industry
- The sixth digit designates the national industry
To bid on any federal contract, you must have at least one NAICS code (and if your business provides multiple services or sells various products, you will have more than one NAICS code). You can find your NAICS code by downloading the complete NAICS Sector codes and titles.
Find Eligible Bids
Once your business is fully registered and you have your NAICS code, you can submit bids for government contracts. You can use SAM to learn if your business meets the requirements to bid on contracts expressly set aside for small businesses or is eligible under any special Small Business Administration (SBA) contracting assistance programs. The SBA has several programs designed to help small businesses win contracts, including programs for small disadvantaged businesses, women-owned small businesses, veteran-owned small businesses, and small businesses serving historically underutilized business zones.
Once you’ve identified a potential contract opportunity, carefully review the Request for Proposal (RFP) or the Request for Quotation (RFQ). The RFP or RFQ will provide detailed information about the product or service the government is seeking, along with specific requirements and preferences (which could include quantities, deadlines, delivery dates, and the evaluation criteria that will be used to determine which business will be awarded the contract).
Prepare a Proposal
Once you’ve identified a contract that fits your business, prepare a compelling and professional bid package that demonstrates why your business best meets the government’s needs.
Stay Compliant
After securing a contract, be prepared to maintain ongoing compliance with all federal contracting laws and regulations set forth by the Federal Acquisition Regulation (FAR). These are outlined in detail in the Code of Federal Regulations. Ongoing compliance training and audit support are critical to fulfilling your contract requirements and staying eligible to bid on future potential contract opportunities.
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If you have more questions about how to become a government contractor, GovCon can help. For over 20 years, GovCon has helped hundreds of clients navigate the complex world of DCAA compliance, streamline their operations, pass audits, and win contracts. We use our real-world experience to simplify your process, reduce the cost of compliance, and improve accuracy. Our government contracting software is built specifically to manage DCAA accounting and compliance, leaving no expense unaccounted for. We’d love to show you how GovCon can simplify DCAA compliance for you. Contact us any time.