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    February 2017
 
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How to Grow a Business Winning Government Contracts

In a down economy, the federal government can be a dependable source of revenue for small businesses while some private-sector budgets may be shrinking and financing can be challenging to secure.

The federal government may not be the first place many companies consider for new business, but now has never been a better time, thanks to changes in federal policy, for business owners to get into government contracting.

In 2009 alone, the U.S. government spent $96.8 billion on products and services supplied by small businesses. Given the government’s procurement goals of awarding 23% of its spending to small businesses and 5% to women-owned businesses, federal contracting is an important avenue of growth for many small businesses to consider.

According to a 2010 American Express OPEN survey of small business contractors, nearly two-thirds (65%) of small businesses that are active federal contractors generate more than $1 million in annual sales. The Small Business Administration’s Women-Owned Small Business (WOSB) Program, which went into effect Feb. 4, 2011, could potentially benefit 684,000 women-owned businesses. This newly created SBA program is designed to expand federal contracting opportunities so that women business owners will capture the full $27 billion of the federal procurement pie that is earmarked just for them. 

Lourdes Martin-Rosa, American Express OPEN adviser on government contracting, says: “Contrary to popular belief, doing business with the federal government is easier than you think.   There’s no secret recipe to obtaining the government as a customer and getting in on the billions of federal procurement dollars.  Doing business with the government is just like doing business with the commercial sector—hard work, perseverance and marketing techniques are required to win contracts.”

Martin-Rosa adds that there are, however, important steps companies must take to pursue federal contracts and to improve chances of landing a first government contract:

1. Get the business noticed. Register the business in the Central Contractor Registration (http://www.bpn.gov/ccr) and add the business to the Dynamic Small Business Search; Registration is free but the company will need these “must haves” in order to register: 

  • DUNS (Data Universal Numbering System) number
  • TIN or EIN (Tax ID or Employer ID Number)
  • Product or Services Classification Codes (NAICS) http://www.census.gov/eos/www/naics
  • Communication links to Points of Contact (POC)
  • Company Web site

 2. Get the business certified. Visit www.sba.gov/gcbd to determine whether the business qualifies for Small Business Certification. If the company is able to identify itself as a small business, veteran-owned, a small disadvantaged business or a woman-owned small business, the company will have an edge in government contracting.

3. Know the agency being targeted. Identify which agencies buy products and services offered by the company by visiting http://www.usaspending.gov. This Web site is an important tool for small businesses, as it provides feedback to the community and taxpayers on how our money is spent, what agency is issuing awards and whom the federal government is buying from and for how much.

4. Check out the procurement forecasts for targeted agencies. Each federal agency produces and is required to post on its Web site an annual procurement forecast, maintained by its Office of Small and Disadvantaged Business Utilization (OSDBU) or equivalent. Contact each agency OSDBU at http://www.firstgov.gov to see what goods or services it expects to buy. Once the company has an idea, get to know the potential customer by visiting the agencies’ Web sites. Become familiar with their missions and assess what the company can offer to help them fulfill their missions.

5. Find upcoming set-aside and bid opportunities. Visit http://www.fbo.gov – this is the single point of entry for every government contract having a value greater than $25,000. Be sure to register to receive automatic bid notifications pertaining to the company’s NAICS codes (industry classification codes).

6. Make the price list easy to understand. Address all required items, even if they aren’t applicable. If the company is in a competitive area, it may need to discount the top commercial price. But don’t discount so much that the company will lose money on the transaction, and keep in mind that government agencies seek the best value, not necessarily the lowest price.

7. Team up.  If the company is new to government contracting, teaming can help gain the experience and credibility that is needed to be awarded more government contracts. With various set-aside contracting programs for small businesses, partnering with an 8(a) or women-owned business can help increase chances of winning contracts.

8. Learn from those who have gone before.  Use available resources to find information that will save the company time and money. For more how-to articles, guides, videos and tips for business owners looking to do business with the government, visit http://OPENForum.com/governmentcontracting.

9. Dedicate time to the effort. Treat this time like a client meeting, and specifically allocate time blocks into a schedule.  Without these blocks of time, the strategy becomes a hope or wish and with inconsistent effort, it will be extremely difficult to effectively attract the new business. For example, one successful woman contractor sets up weekly time dedicated to government-contracting pursuits.

Finally, Martin-Rosa says: “Doing business with the federal government is very similar to the corporate world. Create a strong strategic marketing plan and build relationships with small-business specialists, contracting officers and other key buying officials.  Similar to any corporate entity, the federal government also prefers to do business with people they like and people they trust.  Deliver a good product/service, on time and within budget, and the good word will be spread quickly among the federal market.”


© 2017, Information Strategies, Inc.
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