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How Do You Win Federal Contracts?

There are many elements that determine a small business’ potential in the federal marketplace. I will go over what I believe to be the most critical areas.

 

First, let’s remember the federal market is a big market. In 2020, the federal government spent $559.9B in discretionary spending. $145.8B of this funding went to small businesses. Few small businesses, less than 1% of small businesses, explore the opportunities of working with the federal government.

 

Industry 

The first consideration a firm should look at is if you work in an industry where the federal government purchases your goods and services. Additionally, what geographical area are you able to provide goods and services? Generally, the government buys almost everything, but being local does have its’ advantages.

 

Eligible for a Certification

Federal Certifications provide your firm with preferential treatment. With some federal agencies, certain certifications are stronger than others. However, checking on and applying for all federal certifications your firm is eligible should happen early in the process. The following are the primary Federal Certifications, and the most recent annual totals.  

 

8(a) – Minority-Owned (5%) $34B Sales

HUBZone – Historically Underutilized Business Zone (3%) $13.6B Sales

WOSB – Woman-Owned Small Business (5%) $27.2B Sales

SDVOSB – Service-Disabled Veteran-Owned Small Business (3%) $26.1B Sales

 

GSA Schedule and Other GWACS

GSA Schedules and other Governmentwide Acquisition Contracts make it easy for federal buyers to purchase from your firm. Like everything else in life, going with the flow generally leads to better results than fighting against the current. 

 

GSA Schedule also provides your firm with additional exposure. GSA Advantage is the web portal that federal buyers use when they are trying to locate a provider of a good or service, and do not have a relationship with an incumbent. 

 

Subcontracting

The federal subcontracting market is large and for comparison’s sake, represents about 70% of the size of the small business direct to government market. Working for large federal prime contractors can allow a firm to get its’ feet wet with an agency. Most small businesses focus on 1-2 agencies, learning how an agency works, their needs, and important contacts, can all occur while working as a subcontractor.

 

Am I in a Niche Market?

Niche markets can be good as well. I once worked with a firm that made a specialized shovel for fighting forest fires. They had a challenging time finding the right person, but once they did, their business took off. 

 

Contract Size

Contracts between $10,000 and $250,000 fall under the Simplified Acquisition Procedures (SAP). These means that unless documented by the procurement officer, for lack of a suitable small business supplier, these contracts should go to small business. Therefore, firms in industries that regularly have contracts in this procurement size have an advantage in the federal space. 

 

If you would like to go over all of these moving parts, I always recommend contacting an industry expert such as ez8a, Advance GSA, Advance 8a or Government Marketing. None charge for an initial consultation.

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