If you want to boost your business and expand your market, government contracting might be the perfect option. But many people don’t really know how to become a government contractor, but the team at Federal Contractor Registry can help. Here’s some basic information and tips about government contracting jobs to help you gauge whether this is the right step for your company.
Why Should You Become A Government Contractor?
Last year, the United States government awarded more than $600 billion in government contracts to private companies. While more than 60% of these monies went to huge prime contractors such as Lockheed Martin and Boeing, more than $200 billion went out to midsize and small businesses. That’s a lot of money leftover for thousands of contractors across the country.
The government needs all types of goods and services from just about any industry. Many people mistakenly connect government jobs with FEMA disaster jobs or DOD contracts, but the government needs paper suppliers, janitorial services, repair services, technology, food services, marketing services, consulting services and much more.
Unlike companies in the private sector, the government won’t go broke and fail to pay you for services rendered. Even if there is a recession, federal agencies will still need copy paper, air conditioning repair, plumbing services, security services, etc. Working for the government can be an excellent, recession-proof stream of income so let’s take a look at how to become a government contractor.
Step One: Determine If Your Goods Or Services Are Needed
While most companies provide goods or services that the government might need, some companies are a better fit than others. The System for Award Management (SAM) is the central database for government contracting. Not only does it include detailed information about every active government contractor, but this database also includes a search engine – Beta.SAM.gov.
At Beta.SAM.gov, you can do a preliminary search to gauge if your goods and/or services are needed by any federal government agencies. You can search using many filters, but we recommend that you start by using your North American Industry Classification System (NAICS) codes or your Product Service Codes (PSCs) as these relate specifically to your industry.
If you aren’t sure what your NAICS codes are, you can look it up at https://www.census.gov/naics/. PSCs can be found at https://www.fpds.gov/downloads/top_requests/PSC_Manual_FY2016_Oct1_2015.pdf. We also can look them up for you if you decide to use our services for step two.
Here’s an example. Let’s say your company provides mobile food services, such as a food truck or concession stands. The NAICS code for that is 722330. A quick search shows that several agencies have possible matches including the National Park Service and Department of the Army. This indicates that the government does, from time to time, contract with mobile food services and you might have a shot at a contract if you meet the requirements.
While this example didn’t have a ton of matches, it just showcases that the government needs all types of services and not just weapons systems and disaster cleanup. State governments and county governments also need goods and services, and we will talk about that a bit more in step four.
Step Two: SAM Registration
While you might find some contracts that are a good match for your company, you cannot bid on any of them until you complete SAM registration and have your account approved by the government. You can complete SAM registration yourself or you can pay a third-party registration service to complete this task for you.
The government won’t charge you to register with SAM, but this application is quite lengthy and can take 10 or more hours to complete. If you make mistakes, you also might end up delaying your approval by weeks or months as you try to figure out how to correct the mistakes and resubmit your application.
The frustration level of completing SAM registration can drive many people to forgo becoming a government contractor, but we can help. We handle hundreds of SAM registrations and SAM renewals every year and we can complete your registration quickly and accurately so that you gain quick approval from the federal government.
We liken ourselves to accountants. You can fill out your tax forms by yourself, but these forms and the tax code are difficult to understand, and mistakes can be costly, so it often just makes more sense to hire a CPA. It’s just the same with SAM registration, it’s often just better to leave these complicated tasks to the experts.
Step Three: Sign Up With SBA
SAM registration is crucial, but it’s also crucial to sign up with the Small Business Administration (SBA). Many people mistakenly believe that the SBA is only for businesses with just a couple of employees, but many companies with several hundred employees may qualify as a small business. To check if you qualify, go to https://www.sba.gov/size-standards.
If you do qualify as a small business, register with the SBA and do a bit more research to see if you qualify for any set asides or perhaps the 8(a) Business Development program. The government sets aside a certain percentage of all of its government contracting jobs and rewards these only to small businesses in several categories, which are called set asides.
One set aside is for a woman-owned small business and others include veteran-owned small businesses and service-disabled veteran-owned small businesses. Your small business also might qualify if it is located within a historically underutilized zone or HUBZone. There are HUBZones throughout the United States and its territories often in rural areas, economically disadvantaged urban areas and on Native American reservations.
Another option is to see if you qualify for 8a certification benefits. The 8(a) Business Development program is open to small business owners provided they meet several conditions. The company must be 51% or more owned by a person who is socially and economically disadvantaged.
The SBA also offers general help and support to small businesses, whether or not they decide to become government contractors. We highly recommend signing up with SBA and taking advantage of the tools they offer.
Step Four: Sign Up With Your State Procurement Agency
When people think about how to become a government contractor, they don’t always think beyond working with federal agencies. However, once you’ve completed SAM registration and signed up with the SBA, it’s time to sign up with your state’s procurement agency. State and county governments also rely on private businesses to supply them with goods and services, and you can find many lucrative contracts at the state level.
While the System for Award Management is a federal database, and each state has its own procurement system, you will need to provide your Commercial and Government Entity (CAGE) code when you fill out the state application. You cannot receive your CAGE code until you have completed your SAM registration and are approved. The CAGE code is your unique identifier in the SAM database.
Is There A Downside To Government Contracting?
While there are thousands of lucrative government contract jobs to be had, finding them and winning those jobs can be tricky. Typically, it can take about a year for a company to earn its first government contract, and that might seem discouraging, but once you have earned that first job, future jobs are easier to attain simply because you better understand the process and now have a track record.
The way to combat the difficulties of government contracting is simply to commit to learning the process. Learn about the types of government contracts and how to bid. Learn about terms such as RFPs, RFQs, sole-source contracts, fixed-price contracts, cost-reimbursement contracts, etc. There are some private companies out there that can help you find and bid on contracts, and while this comes with a fee, it can be a great way to get started.
Get Started With Government Contracting Today!
If you’ve wondered how to become a government contractor, these are the initial steps you need to take. With patience and research, government contracts can be an excellent option for many businesses. If you would like us to help, just head to our homepage and click on the New Registration tab, fill out our quick contact form and a registration specialist will get in touch with you as quickly as possible.