Attracting new customers and keeping old ones is one of the most essential functions of any business, small or large. Most small business owners know what their existing and potential customer base is, and are looking for smart ways to grow that base. But what many small business owners may not realize is that they could broaden their customer base to include the largest customer on the planet: the U.S. Government. Winning contracts with the federal government may actually be easier than you think. Whether you’re an established business owner wanting to register your small business as a federal contractor or you’re looking for ground-up strategies for how to start a government contracting business, start with the steps below.
How to Start a Government Contracting Business
The U.S. Government purchases goods and services in nearly every category imaginable. The following are just a few examples of the goods and services contractors may bid for:
- Aerospace and Defense Companies: These companies provide goods and services related to national security, including aircraft, weapons systems, and cybersecurity.
- Construction Companies: These companies provide services related to building and maintaining federal facilities, such as office buildings and military bases.
- Information Technology Companies: These companies provide technology solutions and services to federal agencies, such as software development, network infrastructure, and cybersecurity.
- Professional Services Companies: These companies provide a range of services, including management consulting, accounting, and engineering, to support federal agency operations.
- Healthcare Companies: These companies provide medical and healthcare-related services to federal agencies, such as medical research, medical supplies, and healthcare consulting.
And the list goes on. But it isn’t just that the federal government has so much buying power: it’s that they are required by law to provide opportunities to win these contracts to small businesses. That combination of factors means a wealth of opportunities to win contracts with the government. You just need to know the basic requirements to get started. And once you know how to start a government contracting business, you’ll be able to start bidding on federal government contracts.
Government Contracting Requirements
If you want your business to serve as a prime contractor or subcontractor for the government, there are two primary requirements:
- You need to legally qualify as a small business
- You need to register as a government contractor
What Qualifies as a Small Business?
The Small Business Association (SBA) sets size requirements to help determine what qualifies as a small business for the purpose of bidding for government contracts. While the threshold varies depending on the type of business, in general, the following are the thresholds for small businesses:
- For manufacturing companies, 500 employees or less
- For non-manufacturing companies, average annual receipts under $7.5 million
It’s important to note that there are some exceptions dependent on industry. You can find these in this table of small business size standards.
How to Register as a Government Contractor
After confirming that you legally qualify as a small business, in order to bid on government proposals, you’ll first need to register your business with the System for Award Management (SAM), the database used by government agencies to find contractors. SAM can help you confirm that your business is eligible for contracts specifically for small businesses. And your business may also be eligible for SBA contracts that are reserved specifically for businesses that are disadvantaged, women-owned, veteran-owned, or in underutilized areas.
Maintaining Compliance
Finally, once you’ve registered your small business as a government contractor, you’ll need to maintain compliance with all federal laws and regulations related to government contracts, as governed by the Federal Acquisition Regulation (FAR).
Maintaining compliance as a government contractor can be complicated. Fortunately, Gov-Con can help.
Gov-Con has over 20 years of experience in successfully navigating the complex world of government contracting requirements and DCAA audits. Gov-Con also offers the preferred government contracting software that is built specifically to ensure compliance for government contracting.
Gov-Con offers flexible software packages tailored to your small business’ specific needs, from Start-Up packages for companies forecasting doing business with the federal government to comprehensive DCAA Compliance + proposals + pricing + ICE models for prime contractors. Wherever you are in the process, Gov-Con’s team of experts can help you stay compliant with federal regulations so that you can win government contracts. Get in touch anytime.