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How Small Businesses Can Win Big Government Contracts

Business.com / Last Modified: May 23, 2018
Image credit: Africa Studio/Shutterstock

The U.S. government is one of the biggest buyers and sellers of goods in the world. With the correct preparation and guidance, SMBs can successfully compete in the government contracting space.

Every year the U.S. government shells out upwards of billions of dollars to both large and small businesses alike for contracted work. Landing a government contract can be a lucrative and important win for a company, but many businesses shy away because they don't know how to approach the government request for proposal (RFP) process – or even where to find the opportunity.

While a significant portion of government contracts are won by large companies, a conscious effort has been made to meet small business federal contracting goals. In 2017, the government awarded 24 percent of federal contract dollars to small businesses totaling $99.96 billion, an increase of over $9 billion from the previous year.

To put it simply, there really isn't a greater opportunity for small businesses than the federal market due to the stability of workflow. Regardless of what your company does, there is a government agency out there that could use your expertise. Timing is also right as we're on the heels of a $1.3 trillion spending bill that saw government agencies like the U.S. Department of Energy awarded upwards of $34.5 billion.

Here are some tips to consider if you're preparing to get into the government contracting business.

Overcoming D.C. stigma to seize the opportunity

For most, the misconception that the federal contract process is in some way rigged or based solely on lobbying and the D.C. political giant holds them back. If you're outside of the Beltway, it's easy to have a jaded view of doing business with the government. When considering diving into this trillion-dollar business it's important to understand that this process is actually in your favor, especially as a small business. Contract requirements focus not only on small businesses but also on businesses that are owned by women and minorities.

Small business owners may avoid applying at all because they believe the process is too complicated, but it is not as burdensome as it may seem. There are two ways to do business with the federal government, the first being getting on the U.S. General Services Administration (GSA) schedule. The GSA offers approximately $40 billion a year worth of products, services and facilities to federal agencies from qualified commercial vendors. About 80 percent of GSA Multiple Award Schedule contractors are small businesses, who represent 36 percent of sales.

If you pursue this route, you will have to apply for a MAS contract by providing information that thoroughly describes your company and your commercial products and services (including highlighting your competitive pricing). This process in total can take upwards of 12 months through negotiations and review. 

Another option is to bid on government requests for proposals on your own. If this option sounds more appealing to you, first be sure your small business is registered with the National Association for the Self Employed which will allow you to have a NASE code. You can register on federal websites like SAM.gov (System for Award Management).

Utilize your resources wisely

In order to save precious time and resources, discuss as a team where you fit in this government contracting process, whether that be through applying to get on the Multiple Awards Schedule or if you would like to tackle the process on your own. Becoming a GSA MAS contractor might not be the best option for every small business. Some factors that the GSA cites as helpful to your success include two years of experience in federal contracting either as a prime or subcontractor and relationships within the federal contracting community.

While this may sound like an intimidating and even arduous process, you don't have to go through it alone. Consider working with a firm that specializes in helping companies attain and manage government contracts. Being able to worth with experts in the space will help you navigate the intricacies of your contract requirements with ease (including the paperwork.) Continuously tap into the community around you. Consider companies or organizations that you could team up with as a partner to increase your likelihood of being accepted for a government contract. 

If you're committed to entering the federal contracting space without the help of others in the community, be sure to familiarize yourself with the appropriate resources that share opportunities in the space, such as FedBizOpps. You can also utilize market intelligence platforms like GovWin, which features market analysis, new opportunities in the federal contracting space and connects you with potential partners. However, this option comes with a hefty price tag that you would have to consider as a smaller enterprise.

The U.S. government is the largest buyer and seller of goods and services in the world. Take advantage of this stable partnership now and your small business can reap the benefits of working as a government contractor. Be sure to accurately and convincingly describe your company and the value you could bring to a federal job as well as work to build key relationships in the industry that will help your business grow. Don't let common misconceptions weigh you down – you can effectively tackle government contracts and succeed if you are organized and prepared throughout the process.

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