Did you know that the US government is the world’s biggest customer?

In 2020 alone, it spent more than $600 billion on contracts, representing over one third of all spending in the US. The best part is that among the main benefactors of this spending were US small businesses! Would you like to explore the possibilities of government contracting? Keep reading for the basics of government contracting and some tips on how to get started.

What is Government Contracting?

Government contracting, also known as government procurement, is the process of government seeking to buy goods and services from private businesses. Products and services that are purchased by the government are everything from cleaning and food services to IT, telecommunication, and construction contracts. Government Contracting is a great way to extend your customer base and increase your sales!

There are 3 main types of contracts that you can bid for: Federal, State And Local.

State and Local Government Contracting

State and Local Government Contracting is an easier place to start if you are exploring the market for government procurement for the first time. These contracts may be smaller in size, but usually government officials want to support local businesses which sometimes makes it easier to bid and win contracts. Furthermore, state and local contracts can help you gain the necessary experience needed to become a federal prime contractor in the future.

Federal Government Contracting

Federal Government Contracting is like the NFL of government contracting. Here you can bid on multimillion dollar contracts. The competition is very tough and the expectations are high which is why this tends to be the market for more experienced businesses in the field of government contracting.

Federal Contracting is divided into two categories of contract opportunities.

• Prime contractors
  • A Prime Contractor is usually a large company with a lot of experience in government contracting. They bid for contracts directly from government agencies.

• Subcontractors
  • As a beginner, subcontracts are an easier way to enter the market for federal contracts. A Subcontractor is usually a small business that joins with a prime contractor and provides them with specific goods or services that they need, such as special parts, specific manufacturing, or a particular service.

Why is Government Contracting Important?

Government contracting is a great way for small businesses to increase their sales and revenue. It is more than just gaining an additional customer – you will be entering a completely new market.

The main reason small businesses don’t enter this market is usually because they don’t know it exists, or because the process seems too overwhelming. While it is true that there are some initial steps to take before your business is ready to enter the market of government procurement, your local APEX Accelerators is here to make this process easier for you.

Your local Ohio APEX Accelerator at YSU will support the economic growth of your existing business as you enter the government contracting markets by providing excellent consulting services and training programs. In addition to consulting and training programs, The Ohio APEX Accelerator at YSU connects small business owners in Trumbull, Mahoning, and Columbiana counties that can provide business opportunities to the federal government.

Not Sure Where to Start?

If you want to find new opportunities to expand your business and haven’t checked out government contracting before, we encourage you to do so! Contact the Ohio APEX Accelerator at YSU or your local APEX for help, and they can walk you through all the initial steps needed to enter the market of government contracting!

Government contracting can be a great way to increase your profits,

but it can also feel a little like navigating an obstacle course. Your local Ohio APEX Accelerator at YSU can walk you through the whole process, but you can also do it on your own!

Here are some helpful tips on how you can get your small business ready for government contracting:

1. Get a DUNS number

DUNS number: Data Universal Numbering System (Dun & Bradstreet number)

A DUNS number is like a social security number for your business credit or financial information. It consists of a unique nine-digit identification number which provides credibility to your brand and allows your team and others who may want to do business with you to easily gain more information about your business. In other words, the number is used as a unique identifier for your company when creditors, vendors, or potential partners want to find more information.

To apply for a DUNS number, visit DUNS Request Service.

2. Identify your NAICS code(s)

NAICS Code: North American Industry Classification System

You’ll need to match your products and services to one or several NAICS Code/s. This code classifies your product or service and makes it easier for the government agencies to find your particular business.

To find your NAICS code, view the NAICS code list at the U.S. Census Bureau.

3. Measure Your “Small” Business

To register in government procurement your business needs to qualify as a “small business”. The Small Business Administration (SBA) assigns a size standard to each NAICS code, but to determine if your business qualifies as “small” for government contracting purposes you can also use the SBA’s Size Standards Tool.

4. Register with SAM

In order to make your business ready to participate in government contracting you need to register your business in the federal government’s System for Award Management (SAM). SAM is a database where the government agencies search to find contractors. As you register, make sure to create a comprehensive business profile, because the more information the government agencies can find about your company, the easier it will be for them to see your potential as a government contractor.

Once you have both your DUNS number and NAICS Code, you can register for SAM here.

5. Maintain Compliance

Doing business with the government is slightly different than non-government customers. There are laws and regulations you need to comply with. Find more information here: Federal Acquisition Regulation, 13 CFR 125. The Federal Acquisition Regulations (FAR) form government solicitations and contracts. Understanding how the government builds contracts can help you with bidding, marketing and networking. The clauses and provisions teach you what you can and cannot do.

Need Help Getting Your Business Ready to Contract?

The process of getting ready to contract can be confusing but the Ohio APEX Accelerator at YSU is here to help every step of the way! The Ohio APEX Accelerator at YSU connects small business owners in Trumbull, Mahoning, and Columbiana counties that can provide business opportunities to the federal government. The Ohio APEX Accelerator at YSU will support the economic growth of your existing business as you enter the government contracting markets by providing excellent consulting services and training programs.

Government contracts may not be the first thing that comes to mind

when you think about starting a business, but in many cases they are worth exploring and can be very lucrative. Government contracts can offer some of the most profitable opportunities for small businesses, especially those in need of capital or startup funds. However, there is one caveat to this strategy: finding them. You will have to do your research and establish a presence before you can start bidding on government contracts

Where Should You Start Your Search?

There are a number of free databases you can use to find federal, state, and local contracts to bid on. Similarly, there are multiple databases that government agencies use to find small businesses to contract with. The Ohio APEX Accelerator at YSU is happy to help you in your search for government contracts! However, if you want to look for yourself, this article will list the 6 most common websites and databases for finding contracts and solicitations.

1. Dynamic Small Business Search (DSBS)

Dynamic Small Business Search (DSBS) is a database that government agencies use to find small business contractors for upcoming contracts. Small businesses can also use DSBS to find other small businesses to work with, for example if you are looking for federal subcontracts. You can do general searches or profile searches if you already know what you are looking for. An easy way to start is to enter the NAICS codes connected to the business you are looking for and then go from there.

2. System for Award Management (SAM)

System for Award Management (SAM) is a database where you can search for a wide range of government contracts. Make sure you have registered your business with SAM before you start looking for contracts, because you cannot bid for contracts without being registered. The registration is free. The website provides free introductory videos on how to use the database in order for you to be able to use it more efficiently.

3. GSA Schedules

The U.S. General Services Administration (GSA) is the government agency that connects government buyers with contractors. The GSA Multiple Award Schedule Program, also referred to as the “Schedule,” is the primary contract vehicle for the federal government. The Schedule Program is a long-term government wide contract between commercial suppliers and the federal government. There are certain requirements that your business needs to fulfill in order for you to be put on a schedule.

The GSA also publishes a subcontracting directory for small businesses that are looking for subcontracting opportunities with prime contractors.

4. SubNet

Subnet is the U.S. Small Business Administration Subcontracting Network, a database of subcontracting opportunities posted by large contractors looking for small businesses to serve as subcontractors. You can make general searches by state or territory, or more advanced searches.

5. Directory of federal government prime contractors with subcontracting plans

The SBA maintains a directory of federal government prime contractors with subcontracting plans. This directory is a listing of Federal Government contractors that have a requirement to subcontract to small businesses. The directory is intended for small business concerns seeking to find subcontracting possibilities with Federal Government prime contractors. This directory should be used as a tool to identify which primes you should investigate to find information about their subcontractor processes.

6. The U.S. Department of Defense (DoD)

The U.S. Department of Defense (DoD) maintains a directory of large prime contractors that small businesses can use to find subcontracting opportunities.

You can use this directory to find the contact information of prime contractors for potential subcontracting opportunities. The directory is generated from data contained in Individual Subcontract Reports (ISRs) reported by prime contractors in the Electronic Subcontracting Reporting System (eSRS) and data contained in the Federal Procurement Data System (FPDS).

Additional Help and Resources

Whether you’re a seasoned veteran in the world of government contracting or just starting out, there are many resources available to help you find and win contracts. One such resource is the Ohio APEX Accelerator at YSU. We offer free consulting services, workshops, and other assistance to all current and potential government contractors, so don’t hesitate to reach out to discuss your through your next step in the process.