Step-By-Step Guide to Become a Government Contractor

Step-By-Step Guide to Become a Government Contractor

Step-By-Step Guide to Become a Government Contractor

Government is one of the only business sectors that seems secure as the economy experiences ups and downs. For small businesses, becoming a government contractor offers the potential to tap into that security.

In fact, goals for government purchasing require that 23% of all money spent on government projects be allocated to small businesses. This is a great opportunity.

Here are some helpful links to check out if you are ready to start the process:

Federal Procurement Data System (FPDS): find detailed information on past purchases online

Central Contractor Registration: enroll as a contractor and become visible to government procurement officers looking for businesses to fulfill contracts of less than $100,000

How to enroll as a government contractor

When you register your business as a potential contractor for the government, you’llget a Data Universal Numbering System or DUNS number, at no charge. This is important because it identifies your business when you submit a bid for a job. It also helps your company establish a file that helps potential lenders learn more about your business. This process takes just a few minutes, and the website walks you through each step.

Next, you’ll verify your small business status by self-classifying as a business operating in a historically underutilized business zone, a woman-owned small business, a service-disabled veteran-owned small business, or an 8(a) program qualifying business if any of those categories apply. This is important because if your small business fits into any of these categories, your chances of getting the contract increase.

Another way you can increase your chances of winning a contract is to use your DUNs number in the Open Ratings program and provide contact information for at least six of your past customers who are willing to provide information about their experience with your business. This is optional, but the website is easy to navigate and many businesses find it helpful to participate in the Open Ratings program.

Placing a bid for a government contract

Your likelihood of succeeding with your bid for a government contract is greatly increased if you go through the required paperwork carefully. Each contract has its own distinct set of rules, so there isn’t a single set of instructions that apply to each bid a small business may place. The rules governing procurement are helpful to small businesses new to the process and can be found in the Federal Acquisition Regulation.

Other resources for entrepreneurs seeking a government contract

If you have specific questions or challenges throughout your journey, you can find one-on-one help through Procurement Technical Assistance Centers. This agency is staffed by ex-procurement officers who understand the system’s inner workings. There are over 300 PTAC offices across the country. They offer help via email, web call, and phone if you don’t have an office near you.

You can find even more help by networking via the OSDBU. This service connects various agencies to small business owners. Depending on your area of expertise and the product or service you offer, you may find the various outreach events and conferences here helpful, as well.

Government contracts and financial challenges for your business

Consider how you’ll go about getting the operating capital you’ll need to fulfill government contracts when you successfully land your first job. You’ll need money on hand to continue company operations, and factoring could be the bridge that connects you to the capital you need to get the job done.

Factoring prevents cash flow problems by financing your invoices. This turns jobs you’ve completed into a fast and secure source of much-needed cash. A factor will purchase your outstanding receivables at a large percentage of what is owed to you. You receive the needed funds and the factor collects on the debt.

Factoring is a great way to keep fluid cash flow without taking on debt.

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