Working with the U.S. Government is a lucrative way for small businesses to get a foothold in the business world. Many independent suppliers look to government contracting as another option for growing their business. Large sums of money are set aside just for small businesses that want to pursue these contracts. This may be an attractive business opportunity, but there are some factors to consider when working with the U.S. Government. An important idea to be aware of is that federal contracts generally come with stringent guidelines for product inspection. This is the main idea behind this blog, to illustrate the inspection process involved with these types of contracts.
However, before any bidding can occur, the first step in the process is to get a contract with the government. This is a fairly simple process, but there are a few steps you need to take first. Follow these steps to understand the processes, requirements, and resources needed to engage with the government. In order to sell goods and services to the government, you will need to register your small business.
The first step to getting a government contract is to obtain a DUNS number. The Dun & Bradstreet Data Universal Numbering System, commonly known as a DUNS number, is a unique global business identification system. It is a unique 9-digit number for each physical location of your business, and it is assigned free of charge within one business day. The DUNS number is assigned to all types of business organizations including corporations, partnerships, non-profits, and sole proprietorships. Not just a number, it is a system for maintaining accurate, comprehensive and timely information and it is issued to all entities wanting to do business with the U.S. Government. The DUNS number is constant, staying with a business throughout the lifecycle of that entity. It remains assigned to a business through transitional phases, administrative changes, and even bankruptcy.
When registering for your DUNS number, you will need to have the following on hand:
Legal name
Headquarters name and address for your business
Doing Business As (DBA) or other name by which your business is commonly recognized
Physical address (to include city, state, and ZIP Code)
Mailing address (if different from headquarters and/or physical address)
Telephone number
Contact name and title
Number of employees at your physical location
Whether you are a home-based business
To create a DUNS number, visit https://fedgov.dnb.com/webform/.
- Legal name
- Headquarters name and address for your business
- Doing Business As (DBA) or other name by which your business is commonly recognized
- List Item #1
NAICS Code
The next step is to determine your NAICS code. The acronym NAICS stands for North American Industry Classification System. It classifies businesses to collect data related to the U.S. economy. You will need a NAICS code to register your business and to apply for certain federal contracts.
NAICS is the standard used by Federal statistical agencies in classifying business establishments for the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. NAICS codes classify businesses based on the product or service they supply. A business will generally have a primary NAICS code, but it can also have multiple NAICS codes if it sells multiple products and services. The U.S. Census Bureau website has a link to find your NAICS code. You can utilize a 2007, 2012, or 2017 search to find your code category below
On the main page, you can search by keyword for the code that applies to your field. For example, if you plan to manufacture ball bearings, the NAICS code that applies is 332991. If necessary, there is a manual available on the main page that provides applicable data about the various industries.
To learn more about NAICS codes, the Small Business Administration (SBA) website is a great resource. There you will find a great deal of information about the contract award process. Use the button below to learn more.
To be eligible for government contracts reserved for small businesses, your business must meet size requirements set by the SBA. These size standards define the maximum size that a business, and its affiliates, can be to qualify as a small business for a particular contract. The SBA assigns a size standard to each NAICS code. To determine if your business qualifies as “small” for government contracting purposes, use the SBA’s Size Standards Tool.
Once you have found your NAICS code and received your DUNS number, you can register in the System for Award Management (SAM). SAM (www.sam.gov) is an official website of the U.S. government that houses a database of companies interested in government contracts. There is no cost to use SAM, and it has several useful aspects available. You can use this site free of charge to register to do business with the U.S. government, update or renew your entity registration, check the status of an entity registration, and search for entity registration and exclusion records.
In order to bid on government contracts, you will need to complete your profile and become searchable. The first step is to create a SAM user account. Go to sam.gov and click on Create A User Account. Once this is done select Register Entity on the SAM homepage so that you can log in to register to do business with the US Government. On the homepage you can also click Search Records to do a public search for existing entity registration records or exclusion records. This is a good way to research other businesses to emulate how they set up their account.
At this point you are ready to explore active federal government contracting opportunities. There are a few different ways you can go about this:
You can utilize the SAM beta site to search and bid on open opportunities (beta.sam.gov). This is now the repository for bidding options. It has replaced FedBizOpps as the location for government bids.
Another option is to search the Government Services Administration (GSA) Schedules program. GSA spends billions in federal procurement each year, much of which goes to small businesses. This can be accessed below.
If you are interested in working as a subcontractor, check out SBA SubNet, where you can find subcontracting opportunities (https://eweb1.sba.gov/subnet/client/dsp_Landing.cfm).
You might also try the DLA bid site, DIBBS. It has an additional registration requirement, but if you have already come to this point, it should not present a problem. DLA is the supplier of the US armed forces, and it has a very informative guide available that can be used to navigate their site. DIBBS stands for DLA Internet Bid Board System. It is a portal for contractors to submit quotes and proposals for a DLA solicitation. There you will primarily find opportunities listed as Request For Quotes (RFQ) and Request For Proposals (RFP). Go to https://www.dibbs.bsm.dla.mil to make a bid on DLA contracts.
Government contracting is a tough area to navigate alone. The criteria can be difficult to meet; for example, it can be difficult to hold your own security clearance. Many independent business owners find they have to go through vendors or integrators to get contracting opportunities.
At this point you are ready to explore active federal government contracting opportunities. There are a few different ways you can go about this:
SAM BETA SITE
You can utilize the SAM beta site to search and bid on open opportunities (beta.sam.gov). This is now the repository for bidding options. It has replaced FedBizOpps as the location for government bids.
government services administration (gsa)
The Government Services Administration (GSA) Schedules program. GSA spends billions in federal procurement each year, much of which goes to small businesses.
government services administration (gsa)
The Government Services Administration (GSA) Schedules program. GSA spends billions in federal procurement each year, much of which goes to small businesses.
government services administration (gsa)
The Government Services Administration (GSA) Schedules program. GSA spends billions in federal procurement each year, much of which goes to small businesses.
What government contracts require time and resources. Independents may not be aware of the number of hours and resources required to pursue and manage a government contract. For example, part of applying for federal contracts involves completing Representations and Certifications. These provisions require you to represent and certify to a variety of statements ranging from environmental rules and compliance to entity size. Representations and Certifications are designed to ensure that you are in compliance with laws and regulations and are an extremely detailed part of the process. In addition to taking a great deal of time to complete paperwork, there are legal implications as well. If you’re going through this process for the first time or on your own, it’s advisable to obtain a legal review.
Liability Insurance. In addition to the time, resources, and credentials needed to obtain a government contract, there may be additional requirements as well. Government contracts, similar to many large commercial contracts, may require additional liability insurance.
Special invoicing and payment terms. Invoicing and payment terms may differ from standard business contracts. When working with these types of contracts you may not receive payment for several months, and any mistakes can lead to additional payment delays. There may also be special invoicing requirements. Government contracting requires you to keep track of your funding and notify the government when you have reached 75% of your funding. Failure to do so may carry a penalty. It is therefore important to read contracts very carefully to ensure that you understand your responsibilities as a contractor.
Certifications. Independents interested in contracting with the government often solely focus on certifications and requirements. However, it may help your position to pursue status as a small disadvantaged business (https://www.sba.gov/federal-contracting/contracting-assistance-programs/8a-business-development-program). This program contains certifications such as the Women-Owned Small Business program or Service-Disabled Veteran-Owned Small Business program, which can give you a leg up in obtaining government contracts, as many government contracts have a small business set-aside.
Relationships. Relationships will help you stand out as more than one of many available vendors. Continue to apply the same practices of networking and relationship building to government contracts as you do to other business opportunities.
The bottom line is that Government contracting is a daunting task, especially if you are not familiar with the process. It is important to assess the requirements before deciding if pursuing a government contract is right for your business. However, while the process may seem overwhelming, opportunities do exist and could be the right fit for you.
Bear Dennis offers guidance to government contractors including support for completing the associated paperwork. If you are interested in pursuing government contract opportunities, consider contacting Bear Dennis for assistance.
