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Start Your Business Startup Basics

A Small Business Guide to Government Contracting

A Small Business Guide to Government Contracting
Credit: nelzajamal/Shutterstock

There are many good reasons to pursue government contracts — not least among them is growing your business with a client that spends more than $440 billion a year on goods and services.

Businesses can do several things to position themselves for success in the government-contracting world, said Lourdes Martin-Rosa, adviser in government contracting for American Express OPEN.

"The Small Business Administration (SBA) is mandating procurement forecasts for government agencies, giving small businesses the opportunity to see how much money is going to be spent by division, by quarter, [as well as] who the contracting officer may be and if the contracts are going to be set aside for any particular certification," Martin-Rosa told Business News Daily.

This provides a valuable opportunity for small businesses, because business owners and business development specialists can reach out and ask questions, something that that cannot be done once a solicitation has been released. [See Related Story: 4 Steps to Landing a Small Business Government Contract]

Your company can also get a leg up on the competition by obtaining a small business set-aside certification. These set-aside categories include woman-owned, disadvantaged-owned, service-disabled-veteran–owned and HUBZone small business. "Set aside" means that the contract needs to go a small business that has one of those certifications, preventing large businesses from submitting proposals or bids on the solicitation. In some cases, there is a "sole-source award," and the contract is awarded to a qualifying company without a competitive process.

The federal government has formal goals to achieve each fiscal year in awarding contracts to small businesses. The government aims to allocate:

Martin-Rosa also encourages small businesses to monitor and respond to sources sought and request for information (RFI) posts on www.fbo.gov (FedBizOpps), the site where the federal government lists all of its contracts. Though going through the process takes some time, she said, the ability to find, explore and discuss these contracting opportunities is critical.

"What the government really wants to see with a sources sought or RFI posting is if they can set it aside in some way," Martin-Rosa said. "Don't be afraid to call the contracting officer and ask questions. Is this a new contract or recompete? Who is the incumbent? You can do research on the incumbent on www.fpds.com, learn more about the contract and even reach out to them for teaming."

Martin-Rosa encouraged small businesses to contact other small or large businesses to explore teaming up on a contract. Working with businesses already performing government contracts allows a small business that's new to the market to gain valuable insights. You can learn about meeting contract expectations, completing internal and behind the scenes processes to meet requirements and regulations, and building a past performance portfolio that will strengthen your ability to individually pursue contracts in the future.

"The key to successful teaming partnerships is to find a partner that is an extension of your company in integrity and quality," Martin-Rosa advised. "Small businesses know as much or more than large businesses. You just get to offer it to the federal government at a very affordable price."

Martin-Rosa said she sees a lot of potential in a new rule that the SBA implemented this year. Overseas contracts, valued at nearly $100 billion per year, will now be measured toward the SBA small business goals. This opens up the entire world to small businesses, who may lack the resources or experience to try working globally on their own.

"This gives small businesses the chance to learn how to do business internationally," she said. "Having strong certifications, with the commitment to use them, provides expansion opportunity and the security of getting paid in U.S. currency."

For more in-depth information about government contracting, visit the SBA website.

Marci Martin

With an Associate's Degree in Business Management and nearly twenty years in senior management positions, Marci brings a real life perspective to her articles about business and leadership. She began freelancing in 2012 and became a contributing writer for Business News Daily in 2015.