Federal government contracts worth $500 billion are awarded each year, with the law requiring that 23 percent go to small businesses.
But every year officials struggle to meet that goal and having difficulty in meeting the goals of awarding 5 percent of contracts to women-owned businesses and 3 percent to businesses in low-income areas.
Last year large firms nabbed $83 billion in government contracts tailored to small businesses, according to a recent story in Government Executive .
If small business owners learn as much as possible about this bidding process and start applying, they may be able to land a lucrative contract. Here are a few tips for finding and winning federal or local government contracts.
Related: U.S. Federal Spending at Small Businesses Misses Mark. Again.
1. Register a business.
The Small Business Administration has a guide for those wishing to register their small business and bid on federal government contracts. First the businessperson needs to get a Data Universal Numbering System (DUNS) number from Dun & Bradstreet, which can be obtained at no cost through the D&B website. This number is required before someone can begin bidding on government contracts.
Once a company has a DUNS number, the owner can begin bidding on government contracts. Register on the federal online System for Award Management, as well as appropriate state central procurement contracts site. In both instances, search through bid opportunities to locate any contracts that might be ideal for the small business.
2. Serve as a subcontractor.
One way a business can land government work without competing for jobs is to serve as a subcontractor. The Supplier Connection site is a great way to find those opportunities: Small businesses can locate contracting opportunities available from larger businesses. By subcontracting with a large business, an owner can learn more about the process while obtaining the income that comes from government contracting.
The SBA also maintains an online directory of contractors that are interested in working with small businesses. While there is no guarantee that these businesses will work with a small firm, contact an SBA commercial market representative to learn how to market products and services to contractors listed in the directory. The SBA’s website offers advice about contracting.
Related: How to Set Your Business Up to Bid on Federal Government Contracts
3. Use a competitive edge.
Small businesses should take advantage of their uniqueness to win contracts. Many government agencies are now encouraged to do business with minority- or female-owned business, so owners of companies that meet the criteria should emphasize that in their paperwork. The National Minority Supplier Development Council can help minority-owned small businesses locate opportunities and the SBA can connect small businesses with opportunities geared specifically toward women-owned small businesses and economically disadvantaged women-owned small businesses.
On a local level, the state government and local chamber of commerce may have programs in place that strengthen minority-owned and women-owned small businesses. Through these programs, entrepreneurs may be eligible for networking opportunities, business counseling and even database registration that will help them locate contracting opportunities only available to a small subset of local businesses.
4. Network.
Both federal and local government agencies that are actively seeking small business contractors regularly host government procurement conferences. These events are a great opportunity to network with government officials and attend workshops geared specifically toward helping small businesses understand the procurement process.
The National Association of State Procurement Officials site serves as a portal to various state procurement agencies and provides up-to-date news of interest to small businesses. Use its map to find the procurement website for a particular state, which is useful for local bidding opportunities, registering to be a vendor or learning about upcoming networking opportunities.
Related: Trying to Win a Government Contract? Avoid These 3 Mistakes