The government is the most powerful customer on earth. It enacts the laws that govern the process and drafts the implementing regulations. And a certain percentage of government contracts must go to small businesses. Wanna get in on that? It can be a long and complicated process, so it’s good to know how to start.

Each year, the U.S. federal government and its various agencies procure more than $300 billion of, well, pretty much everything in goods and services: from airplanes to real estate to zippers.

Moreover, a certain percentage of government contracts must go to small businesses as a means of providing aid for those businesses to build a stronger foundation. According to the U.S. Small Business Association (SBA):

The Office of Government Contracting (GC) works to create an environment for maximum participation by small, disadvantaged, and woman-owned businesses in federal government contract awards and large prime subcontract awards. GC advocates on behalf of small business in the federal procurement world.

Any small business owner with the capabilities would be pleased with this opportunity, as obtaining a government contract offers significant potential for private firms and small businesses to grow exponentially.

But before you jump in to government contracting, consider Small Business Buzz‘s recent, simplified explanation of the process:

1) Foremost, do not underestimate the power with which you are dealing when working for the government. If the government is unsatisfied, it is capable of exhausting all resources to get you to pay for it, according to Small Business Buzz. Do not underestimate the government’s ability to seek or assert an advantage. You will be audited regularly, so get used to it: prepare for audits thoroughly; know the rules; abide by them; and insist that the auditors do so, as well.

2) The rules of government contracting are covered in the 1,000+ pages of the Federal Acquisition Regulations (FAR), which were created based on decades’ of the government’s contractor experience; this to counter every viable scandal or corruption that any business can drop on it. Become familiar with it. Says Small Business Buzz:

Specifically, you need to know Part 12, which relieves contractors and subcontractors who provide “commercial items,” or products rather than services, from many of the federal contract requirements (and paperwork). You need to know whether or not this section applies to you, and, if it does, you will probably need to occasionally remind the people you deal with once you’ve obtained a contract.

3) You must register with the Central Contractor Registration (CCR), which is the federal clearinghouse for vendors, including small businesses. There are also opportunities available to your business if you are of a minority, such as woman owned, in which case you should also consider becoming certified as part of such organizations as the Women’s Business Enterprise National Council (WBENC) or the National Minority Supplier Development Council (NMSDC).

4) The government relies on references, or past performance in the government industry, as a basis for narrowing down its contractor options, thus making it difficult to obtain a first-time contract. If you haven’t started as a subcontractor working for another company that has already obtained the prime government contract, Small Business Buzz suggests considering established “mentor protégé” programs, in which a large business helps a small business get started in government contracting. Another option is partnering with another company.

5) Find out what the government wants and needs. “The surefire way to get a foot in the door at a federal agency is to identify a product or service the agency needs — but that it doesn’t know it needs and which you sell,” according to Entrepreneur.com. There are many sources for such information. And consider state and local governments as an alternative to the federal government directly, especially if you are just getting started. Cities, counties and districts often provide more opportunities for small businesses than does the federal government.

Of course, there are also downsides to selling to the government, as Entrepreneur reports. It can be hard to find the proper purchasing agent among the thousands employed by various branches and agencies of the federal government. In addition, the rules and paperwork are daunting. The good news is that there are many sources of help. The SBA is one good place to start looking for help selling to the government.

Sources

Becoming a Government Contractor
by Michelle Cramer
Small Business Buzz

Become a Government Contractor
by Mark Henricks and Nydia M. Velazquez
Entrepreneur

Who’s Not Responsible Now? The Government Too Must Act As A Responsible Partner In The Contracting Process
by Anthony H. Anikeeff
Legal Times (via Bracewell & Giuliani LLP)

Government Contractor Resources

• Small Business Administration: Government Contracting
• U.S. General Services Administration: How to Sell to the Government
• Federal Business Opportunities