Federal Government Contracting. Each year, the government awards hundreds of billions of dollars in federal contracts to businesses. The governments’ target is to award at least 23 percent of those contracts to small businesses and at least 3% of all contracting dollars to Service-Disabled Veteran-Owned Small Businesses (SDVOSB) each year?
What is a Federal Government Contractor?
A Federal Government Contractor provides products and services for federal, state, and local governments. These government agencies offer bid contracts to businesses across all industries.
For example, with the 2020/2021 Covid-19 Pandemic, private contractors filled a wide range of needs in medical services, research, and development, utilities, and construction, to name a few. To become a successful government contractor, business owners must build a record of accomplishment, then navigate detailed steps to become eligible for government contracts.
The work environment for a Federal Government Contractor varies. You could work as a consultant in an office setting or out in the field in a foreign country.
The incomes for most federal government contractors can be higher than similar roles in the open market.
This article will help you get a great start to Federal Government Contracting Success! I will also recommend the minimum amount of time to budget for each of the 15 steps in this article.
Table of Contents
Find Sources of Federal Contracts (1-hour)
The first step is to know where to find sources of federal contracts.
The best place to start is with the government-run website beta.sam.gov (We will dig in more later on this website).
There are also several privately run sites such as Bidsearch.com, StateAndFederalBids.com, FederalCompass.com, and more. These companies do what I would describe as “filtering,” which can save you time researching your opportunities.
Use GSA Vendor Toolbox to determine if Federal Government Contracting Right for You? (3-hours)
The second step is to determine if federal government contracting is right for you and your business. I made this the second step and not the first because I believe one needs to learn a little before deciding.
In 2012 the GSA and released the GSA Vendor Toolbox. The toolbox’s goal is to “help offerors prepare to get on a schedule and prepare better quality offers. General Services Administration (GSA) is committed to providing innovative solutions to meet the needs of all Federal agencies through the Multiple Award Schedule (MAS) contracting vehicles and by so doing, foster effective, sustainable and transparent government for the American people.”
The GSA Vendor Toolbox is divided into three steps; Research, Analyze and Decide. The toolbox helps you learn about and understand the Federal market while walking through a process that will enable you to Research, Analyze, and Decide whether to submit a proposal to GSA (i.e., apply to get on schedule).
The GSA Vendor Toolbox includes training materials that will help you and your business learn more about the Federal market. It contains tools that will help you uncover opportunities and links to resources to assist you in being a successful MAS contractor.
Now that you believe that federal government contracting might be right for you, the third step is to research the demand for your products and services.
You might want to consider focusing initially on a niche – a contract area where you will not face too many entrenched competitors.
An excellent place to start your market research is with several FREE tools. With these tools, you can research your GSA competition, their prices, and their rates. This information you will use to build your “Selling Strategy.”
Here are a few FREE tools to investigate:
GSA eLibrary is your one source for the latest GSA contract award information. GSA offers unparalleled acquisition solutions to meet today’s acquisition challenges. GSA’s fundamental goal is to deliver excellent acquisition services that provide the best value for federal agencies and taxpayers in cost, quality, and service.
The online shopping and ordering system provides access to thousands of contractors and millions of supplies (products) and services. Anyone may browse on GSA Advantage!® to view and compare the variety of products and services offered.
- Federal Procurement Data System (FPDS) (Retired. Go to https://beta.sam.gov/ and in the search box type “contract data” to access Contract Data Reports). Please review these resources to get familiar with the new Contract Data Reports tool before using it.
- GSA Schedule Sales Query (SSQ) tool (SSQ is retired. See is the replacement: FAS Schedule Sales Query Plus (SSQ+))
GSA Schedule Sales Query Plus enables you to generate several “one-click” reports for specified fiscal years, schedules, or SINs.
Calc helps federal contracting officers and others find awarded prices to use in negotiations for labor contracts across GSA and VA agencies. It offers ceiling prices, fully burdened costs, services data, and worldwide rates.
It offers a way to find small business and local competition in the same market as yours.
USASpending.gov is the official open data source of federal spending information. They track how federal money is spent in communities across America and beyond. You can learn more about government spending through interactive tools that explore federal budget elements, such as federal loan, grant, and contract data.
Price Reporter offers a simple GSA pricing tool to quickly estimate how well you are doing against your competitors.
To find out who your competition might be, I suggest a bit more research. The GSA provides a Free and Robust Service known as “Market Research As a Service (MRAS).” This tool helps identify providers or suppliers for a government requirement? You can use this tool for market research to develop a procurement strategy for an upcoming contract.
Research the regulations and laws for federal contractors (3-hours)
If you are still with me, you have made it to the fourth step. Understanding the regulations and laws for federal contractors is broad. It is not a topic to be feared, but it is a topic where it is an excellent idea to have your own experienced government contracting attorney.
The website URL above contains the starting point for the CEO-level understanding of the necessary items you must address.
An experienced government contracting attorney can help you navigate these sometimes-complex regulations and laws impacting federal contractors.
Create a Business Plan (8-16 hours)
Congratulations, you made it to step five! You are both excited and committed.
Now it is time to create your business plan. Some say a business plan is “so 1990’s”. It most definitely is not!
A business plan is your business and personal bench-marking tool for laying out and holding yourself accountable to a method of execution. It is your “map.” Without a map, even Columbus would not have made it to the New World.
There are several tools out there to help you make your business plan. I will mention this one as a starting point.
Find the six-digit NAICS (North American Industry Classification System) code for your Industry (15-minutes)
Step six involves looking up your six-digit North American Industry Classification System (NAICS) code for your Industry. For step six, you will need to determine the NAICS code for your business. You will need this as part of any bid. The USA government works with a wide variety of industries. With your NAICS code, one can quickly determine if the government uses the type of products and services your business provides.
Determine whether your business is eligible for any special labels (set-aside types) or programs (1-hour)
For step seven, you are going to see if your business is eligible for any special considerations. The government has what they call “set-aside contracts for small business” and “set-asides for government contracting programs,” to name two.
To qualify, you must meet the eligibility requirement via a certification process to bid on these contracts. You start by updating your business profile in the System for Award Management (SAM).
Some set-asides are for small businesses in specific socioeconomic categories. You can bid on these set-aside contracts by participating in any of the SBA’s contracting assistance programs listed:
Get your “Data Universal Numbering System (DUNS)” code (30-minutes)
A DUNS number for your business is needed for various Government Contracting processes.
Get your “System for Award Management (SAM)” code (30-minutes)
Step nine involves setting up your business profile in the System for Award Management (SAM). SAM is the site by which you register to do business with the Federal Government.
Go via the link to this government website and follow the three-step process: Create a User Account – Register Entity – Search Records.
Find a federal contracting opportunity that matches with the products and services you offer using SAM (1-2 hours)
Now at step ten, you are two-thirds of the way to our finish line! It is time to find those business opportunities that are a match for your products and services.
You will do this using the SAM government site where you have signed up. Go to beta.sam.gov and click this link. Here you can search using keywords, date ranges, and more. The web page may look a bit daunting at first, but do not despair! Click this link for an explainer on how to use the site.
Read the SAM documentation carefully so you understand the requirements (1-2 hours per opportunity)
You are now to step eleven. You have searched beta.sam.gov and found some exciting contract opportunities that may be a perfect match. Now you have to READ the related contract documentation carefully to be sure that you fully understand how the winning bidder must fulfill the requirements.
You will want to read the requirements several times and make notes. Now is NOT a time to speed read or say, “I’ll read it later.”
Review the Common Federal Contracting Terms glossary to understand all SAM word usage (1-hour)
Step twelve involves some more educational reading. You MUST learn the Common Federal Contracting Terms that you will be reading and committing to every government contract.
You really MUST understand the meaning as defined on the above website as you will be legally binding your business to meet contract terms that will include these words and phrases.
Speak with a Procurement Center Representative BEFORE submitting your bid (1-hour)
Step thirteen will involve an email and a phone call or two. You will want to speak with a Government Procurement Center Representative BEFORE you submit every bid.
You can find the representative for your area here. Start with an email requesting an appointment to chat, what the subject (contract) will be about, and your questions. An initial email allows the representative the opportunity to prepare for the call, saving follow-up calls.
Even if you do not have any questions, you must call. The representative will tell you things that you may not even know to ask about.
Submit forms in the required format with needed signatures (1-2 hours)
Step fourteen is supercritical.
The federal government runs on paper and adherence to their required formats.
If the contract says “submit in PDF,” do not send an MS Word file.
Also, triple-check and be sure that every spot in the bid is signed as required.
Be prepared to negotiate! (1-5 hours)
You have made it to step fifteen – the last step – and perhaps the most challenging.
You must be mentally prepared to negotiate with the government procurement team!
These government procurement teams see a lot, and I mean a lot, of bids. They have a reasonably good handle on what it should cost to do “X.” Since the government is trying to get as many fresh players (businesses) bidding on contracts as possible, if they’ve called you, then the government wants your business to be one that they add to their list of suppliers.
You will never know for sure why the government procurement team reached out and decided that they would like to work with you, except for one little thing – your price.
As a new supplier, some of the time, your price may be coming in a bit too low to what they know it should cost for a supplier to fulfill any given contract successfully.
The USA government wants and expects every business to make a bit of profit on every contract. Why? Because they know if there is no profit or even a loss, the vendor (you) may not fulfill the contract. To the USA government, this isn’t good.
Each contract is often a piece of a noticeably big deal. Any single unfulfilled contract could fail to deliver many tens of billions of dollars of a much larger program. The USA government needs every supplier, big and small, to provide on-time, on-budget, no excuses.
If they like everything else about your bid, but your price is a bit too low or too high, be prepared to either adjust it or have facts to defend your price.
As an experienced Federal Government Contracting attorney, I can help you navigate and resolve the challenges you and your business can face working with Federal Government Contracts.
To read more about how I can help, Click Here, or select Federal Government Contracting under the Practices Areas in the navigation bar.
I hope this article has helped illustrate some of my knowledge in the Federal Government Contracting space.
I hope you find this article helpful in your decision-making and encourage you to reach out to me with any questions you might have.
With Best Regards,
** Information contained herein is not to be considered as legal advice. Please consult your attorney for legal advice on this or any legal matter.