Learning how to obtain government contracts at the local, state, and federal level is important for small businesses. These contracts are attractive to small businesses because they pay well. For example, the average federal contractor made over $100,000 a year in 2017.
Plus federal contracts are more flexible and can be integrated with other projects or clients. You can renew them or let them go after they’re done.
Interested? Here are some things you should know about government contracting.
What is a Government Contract? This is a legal agreement between a contractor, a state, or local government. These contracts can cover a variety of services, from IT to construction.
Can any business get a government contract?
Government contractors are enterprises that qualify as a small business. They must be registered as government contractors.
There are two types of contractors: a prime contractor and a subcontractor.
Here’s a link you can use to get started.
Why You Should Apply for Contracts with Government Agencies
Federal agencies require that your small business adhere to certain labor regulations and laws to get accepted. However, working with government agencies has its advantages.
Granted, it’s a tough process to get to be a federal contractor. These projects usually last one to three years.
Tap Into A New Market
Small businesses are always looking for new work. By entering the public sector, you can help your business grow and mature. Small businesses can find new opportunities in this sector.
Taking advantage of upcoming contracts is easier as a contractor. Federal employees are more flexible than businesses when it comes to changing government jobs. The red tape is not as burdensome for small business contractors.
These Are Easy To Land
The registration process is time consuming. Although it’s a daunting task, there are set asides to help you run a successful business. While you will need to be qualified, some federal contracts can be reserved.
How to Find Government Contracts
You need to find them before you can win federal government contracts. The Small Business Administration (SBA), is a great resource for federal government options. There are also state and local projects that you can bid on. They are also looking for contractors.
Here are five ways small businesses can locate them.
If you’re a small business that wants to look at the big picture, start here. Here’s a look at the federal marketplace.
Search The Web
Subcontracting opportunities occur at the local level too. Search for (state/county/city) procurement. Each submission might have a different process.
Some contract opportunities have special designations and programs. For example, Service Disabled Veteran and Women-Owned small business. Get more info from the SBA official website on award management.
Ask An Expert
There are consulting services that supply technical assistance. And they can help with business readiness by sorting through the legal implications.
Use A Service
There are other services that match small businesses up with federal options. They use criteria like keywords.
Learn more about how businesses can create proposals.
How to Get Government Contracts (Federal)
Government contract opportunities for small businesses have requirements.
Register Your Business
Registering your business is the path forward. Your physical location is not enough for any government agency.
Make Sure You Have Liability Insurance
Government agencies require this. It protects against accusations of losses, injuries or damages.
Have the Necessary Documentation
Small businesses need documentation to be considered for federal business opportunities. There are also requirements for buyers at the local and state levels.
Employer Identification Number:
You need one of these regardless of your niche. You’ll need a valid taxpayer number to get started. This will take you a while to complete.
The Data Universal Numbering System is a searchable database. Helps prospective clients learn about your business.
The North American Industry Classification number gathers stats on your business. It categorizes businesses according to their niche. It was started in 1997 and renamed The American Industry Classification System. A naics code is required.
Another number you need to find subcontracting opportunities and others with the federal government. The Commercial And Government Entity (CAGE) Code has five characters.
Business Size Information:
The SBA maintains a set of standards for defining small businesses. These help small business to qualify for work like “set asides.”
Prepare Your Proposal
There are a number of metrics that make a difference here. Like past performance evaluations. Describe how you will manage each step of the Statement of Work requirements.
How to Get State Government Contracts
A small business needs to be aware of the differences between federal and state options. The lowest bid price is only one factor.
How to Get Local Government Contracts
There’s no standardization between the federal, state and local procurement processes. Local governments maintain their own websites.
How to Bid on Government Contracts
Before you start bidding on government contracts, the sba offers a distinction you need to know about. Prime contractors work directly with the government.