Business Development for Small Government Contractors

Mar 29, 2022 | Blog, Business Development

Are you a small business that wants a share of the US Government’s annual contracts worth $145 billion set aside specifically for small businesses?

The United States Government is the biggest customer globally, which buys goods and services of all categories. Entering the government contracting space is challenging, and winning US Government contracts can be intimidating. However, to support the Small Businesses and boost the US economy, the Small Business Act sets aside a percentage of annual Federal contracting dollars to Small Businesses. According to Bloomberg Government’s Annual Fiscal Report 2020, the US Government granted $680 billion worth of contracts in the fiscal year 2020, with small firms accounting for a record breaking $145 billion of that. This amount is expected to become even higher in the future. This blog explains the importance of understanding your business and how you can establish your position as a Government contractor in the Federal marketplace.

Understand your Business and the Federal Marketplace

Before you enter the Federal contracting arena, it’s critical that you know everything about your company to compete/bid for relevant Government contracts. There’s a reason you’re in the business. There is something special about your company that meets a specific need or solves a particular problem. It’s a good idea to identify your goals, vision, and values, and conduct an internal Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis, to figure out the Unique Selling Proposition (USP) of your business. You can answer the following questions to understand the market and your position in it:

Know your competence

When a Government buyer (or prime contractor) says ‘Tell me about what you do,’ what they’re asking is, ‘Show me how you’ve solved a problem a lot like mine, for someone who looks a lot like me, yesterday afternoon.’

It is vitally important to establish a peculiar competence over your competitors so that the Government customers turn to you when they are in the decision making stage. Companies with nothing unique to offer or a distinctive solution that solves the customer problem can only compete over price. Such companies are left with an option to cut down the price to attract potential buyers. Try answering these questions to explore your competencies:

  • What are you good at?
  • What different offerings do you have in terms of products and services?
  • Why should an agency/department turn to you to get the work done and not do it themselves?
  • What unique things do you bring to help the Government solve its problems?
  • What products or services have attracted your customers in the past?

 

Know the Federal Marketplace

It is important to explore the market where you plan to venture. The Federal Government encourages open competition; however, it filters out the Small Businesses to identify the best possible fit companies for delivering a particular Federal agency’s needs.

  • Know the Government Agencies where you can win a contract
    One of the ways to win a Government contract is to do a lazer sharp advertisement to your potential customers directly. To begin the process of advertising to the agencies, you can start looking for the agencies that have purchased similar products/services in the past using the Federal Procurement Data System (FPDS) tool.
  • Know your Competitors
    SBA has a tool called Dynamic Small Business Search (DSBS), which can be used by Small Businesses to identify the competitors in the space where they plan to enter. Using this tool, you can check other Government contractors selling products/services similar to yours to better understand whom you are competing against. To have access to this tool, you need to first register your business to SAM and then fill out your SBA profile.

 

Register your Small Business as a Government Contractor

To register your Small Business as a Government contractor, you must go through the following steps:

  • Obtain a DUNS Number before April 4, 2022
    DUNS number is a unique 9-digit identifier that can be obtained from Dun & Bradstreet’s official website to verify your company’s existence. Starting Apr 4, 2022, DUNS is being replaced by Unique Entity Identifier issued through System for Award Management (SAM).
  • Create a login.gov account
    This will help you gain safe and private online access to Government programs such as Federal benefits, services, and applications. A login.gov account is needed to safely log in to SAM.
  • Identify a North American Industrial Classification System (NAICS) Code
    NAICS numbers are used to describe your industry and to locate prospects through a variety of venues. If you offer a variety of products or services, you can register for multiple NAICS codes. Keep a note of your registered code(s). Visit the page to see the whole list of codes.
  • Check your Small Business status on the Small Business Administration (SBA) website
    You can check if your company qualifies as a Small Business on the SBA website by going here.
  • Register with the System for Award Management (SAM)
    Your business must register with SAM before you can be awarded a contract, basic ordering agreement, or blanket purchase agreement.

SBA’s Assistance Programs for Government Contractors

The Small Business Administration (SBA) makes the American dream of entrepreneurship a reality. SBA ensures that Small Businesses receive at least 23% of Federal contracting dollars each year. These programs help Small Businesses by limiting competition for specific Government contracts or granting a specified percentage of contracts to Small Businesses that participate in the programs. The SBA has several programs for Small Businesses, which includes the Small Business set-aside program, 8(a) Business Development Program, the Service-Disabled Veteran-Owned Small Business (SDVOSB) Program, the Women-Owned Small Business (WOSB) Program, and the Historically-Underutilized Business Zone (HUBZone) Program, all of which were created for Small Businesses owned by socially and economically disadvantaged people. Each year 5% of the annual Federal contracting dollars are set aside for the 8(a) Business Development Program, 3% to HubZone-certified Small Businesses followed by 5% to WOSB and 3% to Service-Disabled Veteran-Owned Businesses.

These programs help the Small Businesses in:

  • Winning a fair share of Federal contracts
  • Qualifying for exclusive set-asides and sole-source contracts
  • Partnering with existing Government contractors to win or build performance
  • Learning how Federal contracting works through business mentoring and education.

 

SBA Set Asides

 

Every year, the Federal Government sets aside billions of dollars for Small Business contracts. It has been seen that from the year 2016 to 2020, the Federal Government spending has increased by 51% for Small Disadvantaged Businesses, 47% for Service Disabled Veteran Owned Small Businesses, 38% for Women Owned Small Businesses and 97% for HUBZone Businesses. More than 5 million Small Business applications were received in the year 2021. Statistically, it is evident that there is a room for Small Businesses to get a fair share of Federal contracting dollars. iQuasar supports Small Businesses in identifying the right set of opportunities to bid for. Our team is well-versed with the Federal Government contracting and can increase your chances of landing that dream contract.

 

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