The Start of a Beautiful Relationship
One trillion dollars. Say that with your hand facing palm-out and only your pinky extended to touch your mouth. The reason that I am requesting you do this is because it almost seems like an amount of money that doesn’t exist and this makes it comical. However, this amount of money does exist and it is spent every year by the Federal Government on fulfilling government contracts.
What many may not know is that thousands of these contracts are set aside specifically for small businesses. Contracts below $100,000 are designated for small businesses to bid on first; if the contract isn’t filled by a certain date then larger companies can acquire them. This process happens a lot; small business owners don’t know about the contract and lose the thousands of dollars in opportunities while the larger businesses simply wait for the contract to not be awarded and pick it up. Even large company designated contracts have clauses in them that require that a certain amount of the procurement be subcontracted to small businesses. Imagine the millions of dollars that are out there in government contracts that small businesses are missing out on that could be obtained with a little work.
While contracting with the U.S. Government may not be the most desirable of business ventures, you can provide a service to your country and make a little profit in the process. Many fear the paperwork involved and for good reason, there is a lot of it. But, if you provide a service that the government needs, all that paperwork will be worth the trouble. Here is some research that has been done that may make it easier for you to join in the contracting game.
To begin with, the one thing that will stick out to you is that government spending and private spending are two different entities. They differ in three main characteristics that must be understood before you begin. First, government contracts are very closely watched to curb misappropriation of funds and to ensure the same policies and practices across all of the government’s many agencies. Second, all of the contract terms are the children of careful drafting by many lawyers combined with the knowledge of the dealings of past contracts. Third, because of the status of the government within the court system, disputes follow a very different path than those from the private commercial sector.
Now that we know these three principles we can go on to the next step in contracting with the government, creating a bid. There is a lot of work that goes into creating a bid and you have to know some things before you submit a bid for a contract. Your first order of business will be to know your SIC code with the Federal Government. Your Standard Identification Classification code indicates the size of your business so the government knows what you sell and how they can locate your small business.
You must then file a SF 129 Form that will place you on a bidders list for individual government agencies. This is where the dreaded paperwork comes in because you must fill out one form for each government agency with which you hope to do business. You have to do this because agencies do not share their bidders lists with other agencies, especially when they have a good business working for them.
You must now register your business with a Data Universal Numbering System (DUNS). Your DUNS number identifies your individual business and lets the government know your location. The DUNS number is required of anyone doing business with the Federal Government. This registration can be done at no cost by calling Dun & Bradstreet at 1-800-333-0505.
As with any venture where you choose to take your business, you must now do a little research. Be sure to take a look at the U.S. Government Purchasing and Sales Directory because it lists all services and products that are purchased by the government. More importantly, it gives contact information for purchasing offices around the country. Copies of the publication are available through the Government Printing Office and they can be reached at 202-783-3238. You can also get a copy from your local Small Business Administration.
Your next step will be to meet with your small business specialist (SBS). These officers exist mainly to help your business be awarded a contract and will tell you the direction that you need to follow. Most departments in the government have an SBS and it helps to get acquainted with them so you can be confident in their advice to your business.
These are some of the first steps to take to get into the government contracting business. As was mentioned before, this direction can be lucrative to your business when thought out and done well. Next time, we’ll take a look at more steps to help you in being awarded a bid and what happens after a bid is awarded.
Full of wit and humor, Brandon White is an entrepreneur and former editor and writer for iEntry, Inc.