Small Business Government Contracts: How to Get Started

The federal government is the largest buyer of goods and services in the world. By law, it must direct a significant share of contract dollars to small businesses. Programs like 8(a), HUBZone, WOSB, and SDVOSB exist specifically to reduce competition and give small firms a real shot at winning.

Despite this, most small business owners never pursue government work. The process looks complicated from the outside, and the jargon can be intimidating. But the fundamentals are straightforward. Here is how to get started.

Step 1: Confirm You Qualify as a Small Business

The SBA defines "small business" differently depending on your industry. Each NAICS code has its own size standard, measured by either annual revenue or number of employees.

For example:

• 541511 (Custom Computer Programming): Small if annual revenue is under $34 million
• 236220 (Commercial Building Construction): Small if annual revenue is under $45 million
• 334111 (Electronic Computer Manufacturing): Small if fewer than 1,250 employees
• 541611 (Management Consulting): Small if annual revenue is under $24.5 million

Look up your NAICS code's size standard on the SBA size standards page or use the GovContractData NAICS Lookup tool.

Step 2: Register in SAM.gov

Registration in the System for Award Management (SAM.gov) is mandatory for all federal contractors. It is free. You will need:

• Your business EIN
• A Unique Entity Identifier (UEI), which you receive during SAM registration
• Bank account details for electronic payment
• Your NAICS codes (two to five codes that describe your work)
• Points of contact for your business

Registration takes about an hour to complete online. Approval typically takes one to three weeks. Registration expires annually, so set a reminder to renew.

Step 3: Research Your Market

Before bidding on anything, invest time understanding where the opportunities are. This research prevents you from wasting time on contracts you cannot win.

Search federal contract awards on GovContractData to answer these questions:

• Which agencies buy what you sell? Filter by your NAICS codes to see the top agencies.
• What do contracts in your field typically cost? Award values give you pricing benchmarks.
• Who are your competitors? See which companies win in your space and whether they are small or large.
• Are set-asides common? Check whether your NAICS codes have a high proportion of small business set-asides.

This research takes a few hours and saves you months of chasing the wrong opportunities.

Step 4: Consider Certifications

If your business qualifies for any of the SBA's certification programs, the reduced competition is a major advantage:

8(a) Business Development Program. For businesses owned by socially and economically disadvantaged individuals. Benefits include sole-source contracts up to $4.5 million for services and competitive 8(a) set-asides. Apply through certify.sba.gov.

WOSB/EDWOSB. For women-owned small businesses. Set-asides in industries where women are underrepresented. Self-certify or apply through certify.sba.gov.

HUBZone. For businesses in economically distressed areas with at least 35% of employees residing in a HUBZone. Benefits include sole-source eligibility and a 10% price evaluation preference.

SDVOSB. For service-disabled veteran-owned small businesses. Apply through veterans.certify.sba.gov.

You can hold multiple certifications simultaneously. Each one expands the pool of set-aside contracts available to you.

Step 5: Start Small

Your first government contract does not need to be a headline-grabbing award. In fact, starting small builds the past performance record that agencies require for larger contracts.

Micro-purchases (under $10,000). These do not require competitive bidding. Government purchase card holders can buy directly from you. Getting on GSA Advantage or being listed in SAM.gov makes you findable for these purchases.

Simplified acquisitions ($10,000 to $250,000). Streamlined procurement procedures with less paperwork than full and open competition. Many of these are set aside for small businesses.

Subcontracting. Partner with an established prime contractor. Large businesses with federal contracts are required to submit small business subcontracting plans. This gives you past performance and agency relationships without the overhead of a prime contract.

GSA Schedule. Getting on a GSA Schedule contract puts you in a catalog that agencies can buy from directly. The application process takes several months, but once you are on schedule, orders can come with minimal proposal effort.

Step 6: Find Your Local PTAC

Procurement Technical Assistance Centers (PTACs) provide free counseling to businesses seeking government contracts. Every state has at least one. PTAC counselors help with:

• SAM.gov registration
• Certification applications
• Proposal writing
• Understanding solicitations
• Finding relevant opportunities

Find your nearest PTAC at aptac-us.org. This is free assistance funded by the Department of Defense. Use it.

Common Mistakes New Government Contractors Make

Bidding on everything. Focus on opportunities where you have a strong match in NAICS code, past performance, and capabilities. Quality proposals beat quantity.

Underpricing to win. Government evaluators are trained to spot unrealistically low bids. Price low enough to be competitive but high enough to actually deliver. A contract you cannot profitably execute is worse than no contract.

Ignoring past performance requirements. Most solicitations require past performance references. If you have no government past performance, commercial past performance in similar work counts. Start building references now.

Skipping market research. Bidding without understanding the competitive landscape wastes your time and money. Use GovContractData to study your market before committing to a pursuit.

Not maintaining SAM registration. Your registration expires every year. If it lapses, you cannot receive awards. Set a calendar reminder.

Giving up after one loss. Most businesses do not win their first bid. Government contracting is a long game. Each proposal you write teaches you something about the process and your market.

Build Your Pipeline

Government contracting is a pipeline business. Start building yours:

• Research your market on GovContractData by NAICS code and agency
• Register in SAM.gov and apply for relevant certifications
• Contact your local PTAC for free guidance
• Set up saved searches on SAM.gov for your target opportunities
• Start with smaller contracts or subcontracting to build past performance
• For API access to contract data, explore our plans

The federal government needs what small businesses sell. The programs and data exist to help you compete. The only mistake is not starting.