Government Awards More Contracts to Small Businesses: How to Get Some of the Action

Small Business
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Government Awards More Contracts to Small Businesses: How to Get Some of the Action

Small businesses got hired for a significant percentage of federal government contract jobs in 2014, worth more than $91 billion. That was up from almost $84 billion in 2013.

The government’s goal is to award 23% of its contracts to small businesses each year, but it surpassed that in 2014 by contracting more than 25%, up 2% from 2013.

The Department of Defense, which had the most to spend, contracted the majority of jobs in 2014, primarily with small businesses in Virginia, California, Maryland, Texas and Florida. The businesses that benefited most from this surge were ones that offered engineering and technical services, telecommunications, fuel oils, and program management and support services.

It takes a lot of organization and research to begin, but getting hired by the government can be valuable to your small business. Federal agencies contract for such disparate roles as construction projects and janitorial, health care and engineering services. Here’s how to get started:

1. Find your NAICS code. The government uses North American Industry Classification System codes to classify the products and services it contracts by industry.

2. Get a D-U-N-S number. Issued by Dun & Bradstreet Inc., a D-U-N-S number identifies your unique company, similar to a Social Security number.

3. Register in the SAM. The System for Award Management is a database of all the businesses interested in providing products or services to government agencies. Contracting officers can search it by businesses’ capabilities, ownership, experience, size or location. Your SAM profile is like your business’ resume. Update it at least once a year to stay current and keep your business eligible for contracting jobs.

Once you’ve registered for these accounts, you can begin seeking out job opportunities. The government lists contracting jobs worth more than $25,000 on FedBizOpps.gov, where you can search by state, government agency or industry type (using your NAICS code). Additionally, the U.S. General Services Administration publishes a forecast of contracting opportunities each year.

Subcontracting

The government tends to hire businesses that have at least a few years of experience and have successfully completed contracting jobs in the past. Subcontracting is a great way to gain that experience.

When large firms get contracting jobs from the federal government, they often subcontract the work out to smaller companies. The U.S. Small Business Administration lists subcontracting opportunities by state.

The bottom line: The federal government spends billions of dollars a year on jobs contracted out to private companies, with nearly a quarter of that aimed at small businesses. Getting in on the action requires a working understanding of the government’s contracting process, but doing so can pay off for your business in the long run.


Image via iStock.