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The Basics of Selling to the Government

The Basics of Selling to the Government

As the world’s largest buyer of products and services, the Federal Government spends billions of dollars on military and civilian purchases every year. Government agencies buy just about every category of commodity and service available, from paper clips to janitorial services to complex space vehicles.

Contracting Goals

To ensure that small businesses get their fair share, contracting goals have been established by law for Federal executive agencies:

• 23 percent of prime contracts for small businesses;
• 5 percent of prime and subcontracts for women-owned small businesses;
• 3 percent of prime contracts for HUBZone small businesses;
• 3 percent of prime and subcontracts for service-disabled veteran-owned small businesses.

While these government-wide goals are not always achieved, they are important because Federal agencies have a statutory obligation to reach out to and consider small businesses for procurement opportunities.

Are You a Good Candidate for Government Contracting?

Pursuing government contracts may not be the right decision for every business. Before going forward, ask yourself some basic questions:

• Are you prepared to learn and follow the rules relating to Federal acquisitions?
• Are you willing to do ongoing, detailed research to find procurement opportunities and take the time to prepare and present offers (including bids and quotes)?
• Are you positive that your business can financially support the performance of a government contract that may involve significant start-up costs?
• Are you willing to be a subcontractor to companies that are prime contractors?

Understand the Basics

The Federal Government has strict guidelines regulating its purchase of goods and services. Small businesses must meet certain qualifications, and government contracting officials use standardized procedures.

As a small business owner seeking to sell to the government, you first have to understand how the contracting process works, determine whether your business qualifies, and decide whether government contracting is right for you. Then you’re ready to take the steps necessary to get started and pursue opportunities.

Knowledge is power, and knowing how the government buys products and services, and how you may participate in that process, may be very beneficial for your business. In this section, you will learn the ABCs of government contracting as it pertains to small businesses.