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How Small Businesses Can Sell to the US Government at the Local, State and National Level

October 13, 2016

Contrary to popular belief, the US government does not only give contracts to large businesses. This is a long-standing assumption that is not true. As entrepreneurs have proven time and time again, small businesses can bid for government contracts and win them on a regular basis.

The United States, just like all other economies, depends on small businesses for supplying products and services. Therefore, this article looks at the process and best practices for how small businesses can bid on government contracts to sell products, goods and services to the government at the local, state and national level.

Selling to the federal government is not as hard as people think. All you need to win a government contract is proper planning and research (https://www.entrepreneur.com/article/270045). The most important steps include:

  • Defining your business and products using a NAICS code and a DUNS number
  • Registering your business in the Systems for Awards and Management which helps you to search for services and products
  • Marketing to agencies directly
  • Using established procurement vehicles

Best Practices for Selling to the Government

Start by registering as a government contractor. You have to qualify to sell as a small business entry in the Systems for Awards and Management database. In some places, they call it “self-certifying” without which you can miss out on the award. Using this number you can register the size of your business and complete the required solicitation clauses. Basically, it is a marketing tool that allows state agencies and contractors to search for your company based on your company size, location, experience and ownership.

Obtain the North American Industry Classification System (NAICS) code for administration, contracting and tax matters. This system classifies the economic sector and country of your business and you must identify all the codes in SAM depending on the nature of your business (https://www.entrepreneur.com/article/64072).

Be sure to get past performance evaluations. If you are interested in getting the General Services Administration (GSA) Schedule for contracts, you must get an Inc. Past Performance Evaluation as well as Open Ratings which conduct extensive audits for customer ratings. In addition, it calculates your scores based on the statistical analysis of the different performance data responses (https://www.entrepreneur.com/article/81404).

Get a Contract Vehicle. Some contracts are placed before any individual sales take place. The agreements are a form of pre-authorization that allows the state purchasers to know if you are an authorized seller. Also, they include pre-agreed pricing for your particular services and products. Contract vehicles are many, but the most common is the General Services Administration Program. Alternatively, you can become a sub-contractor by partnering with another contractor who has an already established government vehicle (https://www.entrepreneur.com/article/83506).

Get expert advice. The SBA offers community and online resources to help small businesses prepare for the state and navigate the process. For instance, local Procurement Center Representatives provide services like training, business matching and counseling. Also, it handles various programs which support a statutory goal of obtaining at least 23% of the federal government’s pending budget to small businesses.

Know who you are targeting. Both the private and public sector is quite competitive and not easy to break through. Therefore, by identifying your target audience and having a specified niche is critical. Aim to research and find out your potential fit using the public domain sites.

Start bidding for contracts. After completing all the above steps, begin researching available opportunities. Some website lists all the open bidding and contract awards processes, so utilize them. You can find the information on the Federal Business Opportunities government website each giving the specific details of the bid (https://www.entrepreneur.com/article/217779).

Getting Government Contracts - The Process

As much as small businesses have many goods and services they want to sell to the government at any administrative level, they must understand the process first. The government is the largest consumer but is different from the commercial selling space. It involves a different knowledge base and skills. Sellers or bidders must know how the process works and what to expect (https://www.inc.com/bill-murphy-jr/tips-for-landing-government-contracts.html). Here is a quick overview of the process for small businesses.

Plan and Research- Planning and research are critical steps that map out the basis of your success.

Invitation to Bid. With all the basics in place, you are ready to bid and respond to a request. The IFB contains all the information you need and the application and submission procedure. It includes a comprehensive description of products and services the agency wants to buy. Prepare in advance and have all your customer references with you.

Bid Submission. Understand the target audience for your services and products. Look at the history of your target market and how it prefers to buy the products. Remember that the agency might not be interested in the lowest price; rather they want to see how experienced you are. Make sure to state that clients value your performance record, stability, and experience. The government wants to be assured that you can deliver on your promise on a long term basis (https://www.inc.com/news/articles/2010/03/4-tips-for-procuring-a-government-contract.html).

Presenting Orally. Your proposal submission doesn’t end the process. Prepare for the possibility of providing more information. You might be required to give an oral presentation especially if the agency has narrowed down their possible choices to only a few qualified bidders.

Award of Contract. Through the decision-making process, the state agency may ask for more information which is a good sign. It could mean they are interested, so, keep providing them with whatever information to help them make the decision to buy from you.

Regular Communication. If they award you the contract, keep up communications with the awarding agency. This might include setting up meetings, deadlines, and any other relevant information about the process for how you will supply the products or services the government agency is buying from you. The government values previous performance records. This means you must do an exemplary job. In case you succeed, you can use the agency as your future reference for past performance. This is usually the easiest way to build your profile as a likely candidate for more government contracts (https://www.inc.com/news/articles/2010/03/4-tips-for-procuring-a-government-contract.html).

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