Government Contracting Guide

Some small business owners may grumble when “government” is mentioned, because they only associate it with regulations and bureaucracy to get their business set up – or taxes. They might be surprised to learn that other business owners are toiling away every day to get the attention of the government. There are companies for which getting a contract with their state or national government can make or break the business. If your company provides goods or services that the government can use, government contracting can be a big opportunity, not only by driving revenue and growth, but by opening the door to new contracts as well. If you’re not sure where to start with government contracting, read below to learn what government contracting is, how to best prepare, how to help stay compliant and of course, how to get started.

What is Government Contracting?

Government contracting is the process of getting and fulfilling contracts with state or national governments. Each year, the U.S. federal government and its various agencies procure more than $300 billion of goods and services in more than 4,000 categories, ranging from airplanes to zippers. For many products and services, the U.S. government is the biggest buyer on the planet. Contracting with the government can be a lucrative opportunity for your business, but it also comes with drawbacks. The government is a no nonsense institution, and you will have to be in strict compliance with its rules and regulations or risk suspension or debarment from contracting. However, contracting with the government may open the door to even more types of contracts. Since the requirements can be tough, if you can show that you meet the government’s standards, other companies may trust your business more. Before you get started as a government contractor, there’s much to learn and prepare. Below you’ll find the information you need to begin your government contracting journey.

Getting Started as a Government Contractor

Getting started as a government contractor is similar to getting started as a corporate or retail supplier. You may want to follow three main steps: Do your research, consider getting certified, and consider building your business credit. But for contracting with the government, you’ll want to make sure you get a free D&B D-U-N-S® Number, as it’s required for government contracts. You should also consider talking with a lawyer about common compliance issues to help keep your business safe. Find more information on all of this below.

For government contracting, follow three main steps: Do your research, consider getting certified, and consider building your business credit. Tweet This

Does your business have what the government is looking for? If you can’t answer “yes” to this question and back it up with numbers and facts, you may need to do some research. Things to look into include: Is any other business currently supplying the same product or service to the government? How can your business outshine them? Maybe you can offer a lower cost, or faster turn-arounds. Or maybe you just have stronger business credit and more reliability. If you don’t do your research though, you may easily miss out on landing a contract because you weren’t prepared to sell your business well.
Certifications by third-party agencies such as the Women’s Business Enterprise National Council or National Minority Supplier Diversity Council can lend to your credibility. Since the government, and many other companies, often aim to fill a certain amount of their contracts with diverse suppliers, getting certified could help get a leg up during the bidding process. Consider getting certified through the below third parties before you start bidding on contracts.

Your business credit can also lend to your credibility. The scores and ratings in your business credit file can help show potential partners that you are reliable, pay your bills on time, and can deliver on the terms of the contract. By building and monitoring your business credit file, you can help impact your scores and ratings, which may help you win government contracts. Learn more about business credit and how it can help you grow your business.
Getting a free D-U-N-S Number from Dun & Bradstreet is the first step in building your business credit. As mentioned above, it’s also required if you want to contract with the government. The D-U-N-S is a 9-digit number that identifies your business and connects it to its business credit profile. It’s likely that the government, or a company you try to contract with, will review your business credit file before deciding to work with you. You can use CreditBuilder™ to build your business credit file, or CreditSignal® to get free alerts when there are changes to your business credit file*.
The government has high standards for the businesses it contracts with, and there are hard consequences for non-compliance. Before contracting with the government, you may want to seek legal guidance and make sure you understand what will be required of you in terms of cyber security, human trafficking and more. You can start learning about some of these regulations below.
Register with SAM Today

The System Award Management

Businesses that wish to compete for federal government contracts must first register with the System for Award Management. SAM is a government-owned database used to gather, validate, and distribute information about
contractors to federal agencies and procurement officials.
Register with SAM Today

Compliance Issues

Some of the most common compliance issues involve reporting. When it comes to cyber security, human trafficking, taxes and felonies, there are strict rules dictating how long a company has to report the issues to the government. When the company doesn’t report incidents on time, it may risk suspension or debarment from government contracting (i.e. being suspended from getting or fulfilling contracts or being permanently unable to bid on or fulfill current government contracts). Suspension and debarment could be detrimental for businesses, since as stated above, contracting with the government can make a business look more credible to other businesses, being suspended or disbarred could harm the company’s reputation across the board. We reached out to several professionals in the legal and government contracting fields to help small businesses be more aware of these compliance issues and to offer actionable advice for helping stay in compliance with regulations. Click below to listen to the podcasts we created around potential legal issues in government contracting.

Writing a Capabilities Statement

One of the make-or-break items you’ll want to consider including with your government contracting bid is a capabilities statement. This document states clearly and concisely the capabilities of your business, such as your industry, your accomplishments, what you are able to deliver, and more. Your capabilities statement can have a huge impact on how your bid is received because it is often the first thing supply chain managers will review, and it can help them decide quickly whether or not your business is right for the job. When done well, your statement can help your business be considered for (and possibly win) more contracts. But, when your statement is lacking information or doesn’t convey your business well, it may keep you from reaching your contracting goals.

To learn more about what you should and shouldn’t include in your capabilities statement, listen to the “Optimizing Your One-Sheet Capabilities Statement” podcast featuring Scott Davidson of GOVCON OPS.

Getting Started as a Government Subcontractor

In some instances, you may not be able to acquire a government contract for your business. If your business is too new or doesn’t have strong business credit, you may find it difficult to get started. But, you can still begin the government contracting process by becoming a subcontractor. You may be able to supply products or services to another business that in turn supplies products or services to the government. If you supply steel, for instance, to a company that uses steel to build its products and then supplies the government with those products, you would be a government subcontractor. In this situation, you will likely be subject to government contracting standards despite not actually having a contract with the government. You may be able to use this contracting experience as leverage in the future when applying to contract directly with the government, since you will be able to show that you’re capable of meeting the government’s standards and fulfilling other contracts.

General Dynamics is an example of a company that supplies to the government and also looks for diverse suppliers to add to its supply chain. Review the below insights provided by General Dynamics to see how you could best prepare to join a supply chain like this one:

General Dynamics Supplier Program

General Dynamics is a global aerospace and defense company. The company’s portfolio of products and services includes business aviation; combat vehicles, weapons systems and munitions; C4ISR and IT solutions; and shipbuilding.

Tips for marketing your company to General Dynamic:

  • Research and understand government specific requirements
  • Develop and maintain a business plan
  • Focus on what your company does best and target your efforts and resources
  • Ensure you are registered in General Dynamics’ and the government’s database

When contacting General Dynamics:

  • Ensure you’ve read publicly available documentation from General Dynamics and others on applying to be a supplier
  • Provide a copy of relevant documentation (like a capabilities statement or business plan)
  • State how your company and services are relevant to the specific opportunity and describe company-related past performance
  • Indicate why you are interested in the opportunity and teaming with General Dynamics

General Dynamics encourages small businesses to register with the following organizations for certification:

Industry Specific Resources

Photo Credit: makmotion, Twenty20