This guide outlines what you need to know to win federal contracts as a small business.
When you’re a small business owner, the opportunity to get federal contracts as a small business is one with a lot of appeal. The U.S. government is the world’s largest customer, and it offers significant financial opportunities if you’re a small business.
The government buys a wide variety of both products and services through federal contracts as a small business, and legally it’s required to consider purchasing from small businesses. There are some key reasons the government buys from small businesses.
First, it wants to make sure large businesses don’t gain an unfair advantage. The government also wants access to innovation and new ideas provided by small businesses, and it wants to support them as part of job creation and economic development.
There’s also a goal of offering opportunities to socioeconomic groups categorized as disadvantaged, including women entrepreneurs.
It’s not always easy to get federal contracts as a small business, and depending on which branch of government you’re contracting with and how you’re working with it, you might have to meet regulatory guidelines like CMMC compliance and NIST 800-171 compliance, which relate to cybersecurity.
Before you can get to the regulatory issues, though, you need to win federal contracts. This can sometimes be helped by Contract Development and Management Organisations (CDMOs).
Guide to getting federal contracts
The following is a guide to what to know about getting federal contracts, especially as a woman entrepreneur.
Types of Federal Contracts
There are different ways that you can potentially win a contract from the federal government.
The first general way is through set-aside contracts for small businesses. These contracts are specifically meant to help level the playing field for smaller businesses and to do so, the government will limit competition for small businesses.
There are two subtypes of these federal contracts. There are competitive set-asides and sole-source set-asides.
In a competitive set-aside contract, at least two small businesses could provide the products or do the work being purchased. This is the default for contracts under $150,000. Some are open to any small business, and others are only available to small businesses that participate in contracting assistance programs from the SBA.
Sole-source set-aside contracts are issued without going through the competitive bidding process, and these are usually reserved for scenarios where one business can fulfill all the requirements of a contract.
The next category is set-asides for government contracting programs, which are available to businesses only in limited socioeconomic categories. If you’re part of the contracting assistance programs available from the SBA, you can bid on these.
The contracting assistance programs include women-owned businesses, which we’ll talk more about below.
When you participate in one of these programs, you’re competing against fewer other businesses to win a contract.
The third category is a joint venture when two or more small businesses can come together and form a joint venture to compete for a contract.
Certification As a Woman-Owned Small Business
The federal government sets a goal of awarding at least 5% of all of their federal contracting funds to small businesses owned by women every year.
The government limits competition to businesses participating in the Women-Owned Small Business (WOSB) Federal Contracting Program, and these contracts are in industries where WOSBs are seen as being underrepresented.
After updates that were put in place in 2020, it’s now easier for a qualified small business to participate in the program by improving its customer experience. The SBA is simultaneously boosting its oversite of the WOSB certification process.
Program Eligibility
To qualify for the WOSB Federal Contracting program, your business has to meet certain requirements. You have to be a small business based on the size standards put forth by the FDA. You also must be at least 51% controlled and owned by women, and those women must be citizens of the U.S.
You also must have women managing your day-to-day operations and making longer-term decisions.
You can further qualify as an Economically Disadvantaged WOSD by meeting other requirements, including limits on personal net worth, income and personal assets.
To get certified, you go through the application available on the SBA’s website, or you can go through a third party for certification.
The SBA requires that you maintain your WOSB or EDWOSB certification by annually attesting to meeting the requirements of the program.
Improving Your Chances
If you want to raise your chances of being awarded federal contracts, there are some things you can do.
First, to apply for a government contract, you have to register through the System for Award Management. You should fill out your profile fully and accurately and know that government agencies also search for businesses through the tool.
Then, you would go through the process mentioned above of certifying your company as a WOSB.
You may need to set up a business credit profile with Dun & Bradstreet because a lot of agencies will check these profiles if you’re applying for government contracts.
You should plan to start attending events for the agencies you want to work with because this will help you form relationships.
Some other tips to help you secure federal contracts include:
- Follow what’s going on with government spending trends because you’ll be able to see the industries that might be poised to receive more funding in the next fiscal year.
- Many cities, counties, and states offer programs that award government contracts to women-owned businesses, so you should check with these certification programs.
- If there are ever government training options that come up, take advantage. The Small Business Administration has a learning center with free training, and there may be other events and available opportunities.
- It can be overwhelming to start qualifying for and ultimately getting government contracts, so you might want to work with a professional third-party organization. You can, for example, contact the local Association of Procurement Technical Assistance Centers where you live or the Small Business Development Centers. There is a program called ChallengeHER from Women Impacting Public Policy, the SBA, and American Express OPEN that provides events, training, and education to help women compete for government contracts.
Finally, check with the SCORE local chapter where you live. They can help you get certified and can help you find contracting opportunities. SCORE also helps you with your marketing, and they have webinars and guides on getting started with a government contractor.
