The U.S. Federal Government buys nearly $100 billion worth of goods and services from small businesses each year – but cracking this market as a small business can be challenging. However, done right and with plenty of pre-planning and research, small business owners can successfully land their share of federal business.
If your small business is interested in selling to Uncle Sam, follow this four-step plan that summarizes the process of entering the federal marketplace.
Step 1 – Register Your Small Business as a Government Contractor
Winning your first contract takes planning and perseverance. You might even consider partnering up with a larger contractor on a sub-contractor basis. But the actual process of certifying and registering your business so that you are in a position to compete for federal business is actually a fairly simple process.
In order to compete for government business as a small business, you must meet certain size standards. – these vary by industry, so be sure to check whether you are eligible via the SBA website before following the next steps.
Next, you’ll need to apply for a D-U-N-S number (done via the D&B DUNS Numbers website) and register in the Central Contractor Registration (CCR) database. CCR is a database of all businesses that sell to the government. It is used by government employees and purchasing officials to search for services and products and the companies that sell them. Regulations require that you are registered in CCR before you can sell anything to “the Feds.”
Step 2 – Get a Contract Vehicle
Here’s how selling to the government really starts to differ from the private sector. Unlike a business contract (which binds a vendor to provide services at an agreed rate), a government contract vehicle is an agreement or form of pre-authorization that lets government purchasers know you are an approved supplier and is often put in place before you even sell anything. They also include pre-agreed pricing for your products and services.
There are many government contract vehicles, but the most common and favored is the General Services Administration’s GSA Schedules Program. (The GSA oversees the business of the U.S. federal government and is responsible for helping federal purchasers acquire cost-effective, high-quality products and services from commercial vendors). Exercise your patience! The application process for a contract vehicle is complex and can take many months. So think long and hard about whether you have the resources to commit to this and plan ahead.
An alternative to getting your own contract vehicle is to become a sub-contractor, meaning you partner with a “prime contractor” who already holds a government contract vehicle.
Step 3 – Develop Your Government Market Strategy
Moving on from the technicalities of getting registered and certified, having a focused market approach is critical. The federal government is huge; each agency has its own priorities, needs and sometimes their own contract vehicles. So it’s important to find the right fit for your business and what you have to sell. Information on how and what the government buys is in the public domain, which is helpful. Sites like USA.gov, USAspending.gov, FedBizOpps.gov and the Federal Procurement Data System include information on agency profiles, government spending, and current opportunities.
It’s also critical to network furiously. Industry events are plentiful and offer insights from government officials and industry experts. Government market intelligence firms like GovWin, epipeline and ONVIA also offer information and resources to help you focus your strategy.
Be sure to line up reference customers and case studies that support your proof of performance as a trusted supplier in the marketplace. The government is very particular about past performance.
Step 4 – Get Bidding
Once you’re set, start researching government opportunities. The website FedBizOpps lists all agency bid announcements. Happy selling!
United States Capitol Building Photo via Shutterstock
After getting your business registered and you are ready to do business with the government, you also want to gather critical marketing data that positions you for getting more business. For example, you want to find out which agencies are actually buying your services or product and what contract vehicles they use to procurement them. For example, if the Army is buying professional services through the SBA 8(a) set aside program, and you are a small business, you might want to look at the possibility of getting your 8(a) certification.
many companies waste valuable marketing dollars without getting the critical data about potential government customers.