Expand your business with federal contracts

Janet Arrowood

Have you ever thought about expanding your business by bidding on contracts with the federal government? Have you been put off by the apparent complexity of the process?

Federal contracting isn’t for everyone, but it might be for you. How do you decide if you should consider entering this huge market?

First, decide whether or not you have the time and staff resources to invest in the registration and bidding process. The General Services Administration (GSA) provides a vendor toolbox to help with your decision.

Then research what your services or goods generally cost in the federal marketplace. The GSA includes a contract-awarded labor category on its website at www.gsa.gov, and there are Davis-Bacon wage scales for every county in the country. Don’t forget to add the overhead costs to your services. The Federal Business Opportunities website at www.FBO.gov includes a listing of awarded contracts to give you an idea what many goods and services cost. The GSA Advantage website located at www.gsaadvantage.gov offers another resource. This site lists the prices the government pays for millions of items.

Go to the U.S. Small Business Administration website at www.sba.gov to check out the requirements to qualify for a small business or other set-aside category. Billions of dollars worth of federal contracts are set aside for woman-owned, veteran-owned, service-disabled veteran-owned, Section 8(a) and other small business owner categories.

Make sure you have a business plan with your marketing approach, corporate capabilities statement (your business resume) and staff resumes. This is especially important to keep you focused on suitable opportunities and to use if you’re seeking a loan.

Go through the North American Industry Classification System (NAICS) codes and note all those that apply to you. It’s useful to put these codes on your capabilities statement. You will need them to complete your System for Award Management (SAM) profile and submit proposals at

Get your Data Universal Numbering System (DUNS) number (www.DNB.com). This nine-digit number is required to register in SAM and compete for contracts.

Register with SAM (www.SAM.gov). There is no cost to register, but you must keep the information current and update your registration at least annually. There is a very long checklist to go through, but you generally only mark a few items on each page. Read the documents carefully, since wrong answers can seriously delay or even derail your registration process.

Talk to representatives of the SBA (they work out of Denver, but come to the rest of Colorado several times each year) about obtaining certifications that enhance your business opportunities.

There are also Procurement Technical Assistance Centers (PTAC) (www.ColoradoPTAC.org) around the state. A representative comes to the Business Incubator in Grand Junction several times a year. SBA and PTAC services are provided at no charge.

Finally, keep in mind that writing proposals for federal opportunities is time-consuming. You must be 100 percent compliant with every requirement listed or implied in the solicitation documents. Your pricing must be competitive, but not so low you can’t afford to complete the work if you win the contract.

Remember, you can’t charge the federal government for the cost of preparing your proposals, so bidding everything that looks faintly suitable is not a winning strategy.

Federal contracting offers a big advantage over many commercial opportunities. The federal government pays small businesses very quickly — usually within 30 days of completion of the work and receipt of a correct, complete invoice. To further speed the process, you should be able to accept credit cards (Government Purchase Cards). This is easy, even if you don’t have a merchant account. PayPal, QuickBooks and other systems include a process that lets you accept credit cards for a 3 percent to 4  percent fee, and the funds are transferred to your account in 48 to 72 hours.

For those who can deal with the myriad requirements and processes, the federal contracting market offers a great opportunity.