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A small business blog featuring tips to help entrepreneurs succeed in the small business world. Topics include family business, human resources, marketing, money, networking, operations, ownership, startup, taxes and technology.
Becoming a Government Contractor
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. Any small business owner with the capabilities would willingly jump at this opportunity. After all, obtaining a government contract means an outrageous opportunity for your business to grow in exponential ways. But before you dive into the deep end of the ocean, it’s important to know what you’re in for.
Feel the Power
First and foremost, don’t underestimate the power that you are dealing with when working for the government. If you do something they don’t like, they are capable of exhausting all resources to get you to pay for it, most of which you will not be able to fend off. Your intentions should be of strict honesty and reliability — as a goverment contractor, you will likely be audited on a regular basis.
Know the Rules
The rules of government contracting are lined out in the 1,000 plus pages of the Federal Acquisition Regulations (FAR), which were created through decades of the government’s experience with contractors to counter every viable scandal or corruption that any business can throw at them. Intimidating? Well, that’s the idea.
You won’t be expected to memorize the FAR, but you should familiarize yourself with it. 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.
In order to do anything with the government, you will first need to register with the Central Contractor Registration (CCR). There are also more opportunities available to your business if you are of the minority, such as woman owned. If that is the case, you should also consider becoming certified as part of organizations such as the Women’s Business Enterprise National Council (WBENC) or the National Minority Supplier Development Council (NMSDC).
Also be aware of the fact that, in order to apply for a contract with the government, you will need to supply your D-U-N-S number, which, if you do not have one, can be obtained at Duns & Bradstreet. Also, on your application for a contract you will have to classify the products/service you provide with a classification number. You can determine what that number is by accessing the North American Industry Classification System (NAICS).
The government relies on references, or past performance in the government industry, as a basis for narrowing down their contractor options. This makes it rather difficult to obtain a first time contract. You may want to consider starting as a subcontractor, working for another company that has already obtained the prime government contract. There are established Mentor ProtÃ©gÃ© programs that are worth looking into, in which a large business helps a small business get started in government contracting. Another option is partnering with another company to combine the services you provide, thus strengthening your resume.
You will then need to find out what the government is looking for. There are many sources for this information, some of which have been listed below for your convenience. Also, consider state and local governments as an alternative to the federal government directly, especially if you are just getting started. Cities, counties, districts, etc. often contract more goods and services than the federal government, opening up more opportunities for your business.
Once you have determined what contracts you will bid on, research the industry. Look into your competitors so that you have a better idea of what you can offer the government that they can’t. Also, research the government agency that you are applying with. The more knowledgeable you are about the agency, the better your company will look to them.
Please be aware of the fact that this is only a simplification of the process ahead of you in pursuing a government contract. There is a lot of information out there, some of which I have supplied below, which you should look into before pressing on. It’s a highly complicated and long process, so the more you know beforehand, the better.
• Entrepreneur.com: Think Big
• Entrepreneur.com: Become a Government Contractor
• CapturePlanning.com: How to Become a Government Contractor
• Washington Business Journal: So You Want to Be a Government Contractor
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