The federal government offers contracting opportunities for small businesses. SMEs who are interested in doing business with the Government can make use of this system to search and acquire opportunities. A federal contract is a legal document in which the agencies request certain conditions to acquire the desired service from the selected small business. The federal government will select the business that demonstrates the best proposal to achieve the service both economically and technically.
About federal contracts
Government contracts offer exceptional financial opportunities for small businesses. The US government is the largest consumer in the world, and it buys all types of products and services in different quantities. It is required by the law that the US government buys from small businesses. The Government will want to buy from small businesses for a number of reasons, and these include,
- To make sure that the large businesses do not outrun their smaller counterparts.
- To take advantage of the new and innovative business ideas that the small businesses could provide.
- To sustain development and to support small businesses to create jobs and to develop the economy.
- To render opportunities for deserving people and disadvantaged socio-economic groups.
The entire process of requesting business proposals, evaluating the sales bids, and awarding contracts to the businesses generally happens on a level playing field. The federal government will actually accept bids from any of the qualified businesses. Some of the federal contracts are also set aside for small businesses exclusively. The Small Business Administration will work with federal agencies to award prime government contracts to eligible small businesses. They will also offer help and counseling for the small business contractors.
Are federal contracts tax exempt?
The federal government does not give no federal contracts tax exemption. Generally, federal excise taxes are levied on particular services and supplies. The manufacturer excise taxes are imposed on certain motor vehicles, tires, gasoline, fishing equipment, shells, firearms, coal, etc. The federal government will also impose tax exemptions under certain conditions. The executive agencies can take the best advantage of the federal excise tax exemptions as applicable.
Only the following organizations are given tax exemption certification, such as non-profit charitable, religious, and educational organizations. Nonprofit cemetery companies and volunteer fire companies are given tax exemptions. Certain qualifying veteran organizations’ credit unions are also given tax exemptions for their federal contracts.
The federal contracts also offer tax exemption on economic development projects and the construction material used on these projects. Such exemptions are also offered on certain warehousing equipment, such as the equipment used for handling and storage of racking systems, computer systems, conveying systems, and other equipment.
Small businesses that are set up and owned by veterans are given tax exemptions by the federal government. For instance, purchases that are made by the veterans organizations and their auxiliary units are exempt from sales taxes if the purchases are made for the exempt purposes of the organization. However, the organization or its auxiliary units should submit a letter of determination from the IRS as evidence of their tax-exempt qualification.
How can MySetAside help with the tax-exempt status of organizations?
MySetAside is an easy and free online platform that helps small businesses to compete and acquire government contract opportunities. This platform allows small businesses to easily acquire government projects by matching and comparing contracting opportunities that best suit the business. The largest index of information available with MySetAside will help small businesses compare their contracting opportunities with business classifications. It will also guide them with tax exemption assistance and other help required to run the business profitably.
With the help of MySetAside indexing platform, businesses can match and compare federal contracts against their business classifications. It will also offer all required assistance to help small businesses perform profitably against their rivals.