ATTENTION!!! Don’t miss the online Q&A about Government Contracting for Small Business!
This 2-part blog will get you ready to join this great online workshop which will help you to determine your next steps and will address general questions about Government Contracting!
It’s FREE! Click HERE to find out more!
What is government contracting?
The federal government is the largest customer in the world. Like contracts for goods and services found in the public sector, government contracts are made available by law to small businesses. Since the country runs on the backbone of small businesses, some ninety-nine percent in two-thousand twenty-one, the government wants to do business with small companies for many reasons including:
- Ensuring big businesses don’t force smaller companies out of business.
- Gain access to innovations and new ideas that smaller companies tend to provide.
- Support the economic development and the job creation that drives our economy.
- To provide an opportunity for disadvantaged socio-economic groups.
Just finding the biggest customer in the world is enough to send the likes of Joe Toolmaker to his workshop to build as many left-handed monkey wrenches as possible. For certainly there must be a need for those? Susie Muffin-Maker also believes she has an opportunity for a contract to feed troops or hungry federal workers. On the internet, she has sourced out thousands of muffin pans, ovens, and mixing equipment. However, overextending a credit-card may be tempting for Susie, and pressing the “buy now” button could put her business at risk.
The thought of landing a big, lucrative government contract for a small business may sound like a panacea for a company trying to grow. However, there are greater hurdles than just red tape to clear before actualizing any size contract available.
What do I need to know about government contracting in my small business?
If you are contemplating the pursuit of government contracts for your small business, first and foremost you must be a business registered in the United States, with few exceptions. A few other important things a small business needs to consider are:
- Track record: The government is more likely to award contracts to reliable companies with strong track records for producing what they need, on time and at a competitive rate.
- Register: A small business must register for a Unique Entity Identifier number (UEI). This twelve-character alpha-numeric identity is given when you register through SAM at SAM.GOV (link)
- Identification: Government contracts are based on products or services they need. Research and identify what you produce and what agencies may be looking to procure. You will need to match this product with a North American Industry Classification System (NAICS) code. This can be found at the S. Census Bureau.
- Company Size: Eligible companies must meet size standards as set out by the SBA. This is important as applying for a contract. It may also require a company with enough employees to produce what they need.
- Compliance: The government requires strict compliance to laws and regulations. As well as adherence to the federal government’s purchasing process governed by the Federal Acquisition Regulation. Regulations for small business contracting can be found at 13 CFR 125.
- Time and patience: It can take several years to be awarded a government contract. Even then, there is no guarantee that they will utilize your company.
Unfortunately, Susie Muffin-Maker did not take these things into account. She registered her business in Indonesia. Despite the low tax rates and access to the world’s largest coconut producer for her famous muffins, she is disqualified. While contracts for bakers exist, no agencies are looking for coconut muffins right now.
In NEXT WEEK’S BLOG we’ll get into the specifics of how to prepare a proposal for a government contract and which contracts are the best for your small business success.
Don’t forget our online class!!! Government Contract Q&A
For additional information on government contracting, how they work, or how to get a government contract, please contact us at the Small Business Development Center – SBDC – Serving Paris area: Lamar, Hunt, Hopkins, Delta, and Red River counties.