No matter what type of goods or services your business provides, your company could be a good fit for government contracting. But what is government contracting and what does it entail? We’ve created a short overview to give you a general idea of government contracting and how it can benefit your business.
There are more than 400 federal government agencies in the United States, and all of these agencies receive the bulk of their goods and services from the private sector. Every agency has contracting officers known as procurement agents and these individuals are responsible for purchasing whatever good or service their agency needs.
Unlike in the private sector, where goods and services can be purchased as needed and often fairly quickly, government contracts are more formal, and it tends to take much longer for the government to award these contracts. This time constraint might seem discouraging, but, keep in mind, the government operates using our tax dollars, so it’s crucial that they follow procedures and select vendors wisely.
The First Step – SAM Registration
The System for Award Management (SAM) is a database run by the Federal Service Desk and this database includes information regarding all government contractors. You must have an active listing in this database in order to do business with any federal agency. We can help you with this part of the process, but first let’s take a look at what types of businesses are the best fit for government contracting.
Should You Bid On Government Contracts?
Before you dive into the world of government contracting, it is wise to see if there is a need for your products or services. To get a quick idea, head to SAM.gov and search for the Contract Opportunities tab. Then click on the Advanced Search tab and use the Product or Service Code search bar and enter your North American Industry Classification System (NAICS) codes. If you don’t know your codes, you can find them at Census.gov.
For instance, if you are a painting contractor, your NAICS code would be 23832. A quick recent search at SAM.gov shows more than 70 potential contracts from agencies including the Department of Defense, the Department of the Interior, the Federal Aviation Administration, the U.S. Forest Service and many others. While these might not all be convenient to your location, it illustrates that there is a need for your services.
Keep in mind, in addition to federal contracting jobs, you also can bid on state contracting jobs, and these can be just as lucrative as federal contractor jobs. You also can bid on contracts in other states, so if you are near a state border or can provide goods or services to multiple states, this might be a good option.
Types of Government Contracts
Here are a few of the types of contracts issued by the U.S. federal government. Keep in mind, there are other contract opportunities, such as sole-source contracts and GSA schedules (also known as GSA contracts).
Fixed-Price Contracts – The government pays an agreed-upon amount, regardless of the contractor’s costs. This places maximum risk on the contractor to control costs.
Cost-Reimbursement Contracts – The government reimburses the contractor for allowable costs incurred. The contractor has less financial risk but the government pays more if costs escalate.
Incentive Contracts – The contractor is reimbursed for costs and receives additional payment (incentive) for meeting/exceeding targets like quality, schedule, cost savings, etc.
Time and Materials Contracts – The contractor is paid for labor hours expended and materials used. Widely used but less favored due to less cost control.
Indefinite Delivery Contracts – Provide an indefinite quantity of supplies/services during a fixed period. Orders are placed against the contract on an as-needed basis.
Federal Supply Schedule Contracts – Provide access to pre-negotiated contracts with firms to provide commonly-used supplies/services at discounted pricing.
Blanket Purchase Agreements – Simplify ordering from Federal Supply Schedule contractors when there is a recurring need for supplies or services.
The type of federal contract depends on factors like the project scope, complexity, performance risks, and degree of price competition. Most federal government contracts contain elements of more than one contract type.
If you are a small business, you also could get started as a government contractor by working as a subcontractor. The prime contractor handles all of the back and forth with contracting officers, but you gain experience and begin building a contracting resume.
Small businesses also should sign up with the Small Business Administration (SBA) and take advantage of this agency’s many helpful programs. In addition to SBA loans and business mentoring, the SBA has many certifications that can make it easier to compete for and win government contracts. These include 8a certification, HUBZone certification and designations such as a Woman-Owned Small Business (WOSB). The SBA also runs SubNet, which is the government database for subcontracting opportunities.
Get Started With SAM Registration
SAM registration is a complicated process that can take many hours. In fact, it can take 10 or more hours, to wade through complicated government-speak such as federal acquisition regulations, etc. If you find yourself becoming frustrated with the process or simply want to hand over the work to a SAM specialist, the team at Federal Contractor Registry is here to help.
While the government does not charge for SAM registration, many people opt to pay a third-party registration service to avoid the hassle and difficulty of the registration process, much like you would hire an accountant to complete your taxes. We can complete our SAM registration or SAM renewal quickly and 100% accurately.
We also will help you sign up with the SBA, if applicable. We also will help you attain your Unique Entity Identifier (UEI) and help with the notarized letter requirement. These latter two issues are relatively new in the world of SAM and can be a bit confusing, but we can help make this process much easier.
Hopefully, this blog has provided some answers to the questions regarding what is government contracting. If you would like to use our services for SAM registration, just head to our homepage and click on the New Registration tab. We will gather some crucial information about your business and get started on your registration as quickly as possible.