Government contracts render tremendous business opportunities for small businesses as the US Government is the largest customer in the world, and it buys diverse services and products in different quantities. To compete for these Government contracts, contractors must request proposals, evaluate bids, and qualify themselves in the first place. Let us discuss how small businesses equip themselves to compete for Government contracts.
How do you Qualify as a Small Business to Compete For Government Contracts?
Recognizing and qualifying as a small business by the SBA offers several advantages at the local, state, and federal levels. The following are the requirements to qualify as a small business and to compete for government contracts.
- Getting a Unique Entity Identifier:
Before bidding on Government proposals, the company should get a UEI ID, a unique alpha-numeric valve of 12 characters. Companies should register with the SAM( System for Award Management) and generate the UEI for their business. Registering with the website helps the government with easy entity identification and validation, making the entire process easy.
- NAICS Code:
The NAICS (North American Industry Classification System) classifies businesses based on the services they offer or the products they supply. Small businesses should match their products and services with this code and might sometimes have multiple codes.
- Registering with SAM:
To qualify for government contracting, it is mandatory to register the business with the SAM (System for Award Management) of the federal government. SAM serves as a database for government agencies to find prospective contractors. Registering with SAM proves that the business is eligible for contracts reserved primarily for small businesses. The portal also helps to represent women-owned, disadvantaged, and veteran-owned businesses.
- Match the Standards:
To be eligible for government contracts reserved for small businesses, the business has to match the size requirements that the Small Business Administration sets. The SBA assigns a specific size standard to each of the NAICS codes. Manufacturing companies that have 500 employees or fewer and non-manufacturing companies with annual receipts below $7.5 million are qualified as small businesses.
- Security requirements:
Small businesses looking to contract with the Department of Defense of the United States should show they can safeguard their data and systems. The Department of Defense has also developed a free platform that helps businesses with cybersecurity Maturity Model Certification to start bidding. It also educates users on risk management and provides tools and training for cyber security awareness.
Federal Contracting Benefits For Small Business Qualification
Being qualified as a small business will offer a big advantage for business in some contracts. Qualified businesses are eligible to compete in set-aside programs and government procurements, as the federal government has set 23% of the prime contracts for small businesses. The Federal Government wishes to buy from small businesses for several reasons, such as
- To support small businesses in the process of economic development
- To ensure that opportunities are offered for small businesses and large businesses do not exploit them.
- To seek access to the ideas that small businesses render
- To render diverse opportunities to disadvantaged socio-economic groups.
Federal agencies will publicly list their contracting opportunities, and some of these contracts are exclusively for small businesses. To compete for these set-asides, the business should have certain qualities and register as a small business.
Bottom Line:
Apart from matching the criteria mentioned above, to compete for government contracts, it is mandatory to comply with all the applicable laws and regulations and find prospective opportunities for bidding. MysetAside helps in finding prospective bidding opportunities for businesses and helps them stay ahead of the competition.