The federal government contracts with small businesses to buy products and services.
Benefits of government contracting
Government contracts are a tremendous financial opportunity for small businesses.
The U.S. government is the largest customer in the world. It buys all types of products and services — in both large and small quantities — and it’s required by law to consider buying from small businesses.
The government wants to buy from small businesses for several reasons, including:
- To ensure that large businesses don’t “muscle out” small businesses
- To gain access to the new ideas that small businesses provide
- To support small businesses as engines of economic development and job creation
- To offer opportunities to disadvantaged socio-economic groups
How it works
The process of requesting proposals, evaluating bids, and awarding contracts should take place on a level playing field. The government should consider a bid from any qualified business.
Set-aside and sole-source contracts
Federal agencies must publicly list their contract opportunities. Some of these contracts are set aside exclusively for small businesses.
In some cases, these so-called set-aside contracts might consist of certain types of tasks on larger contracts. In others, entire contracts may be reserved for small businesses. When a contract is set-aside for one specific small business, it’s called a sole-source contract.
The SBA’s role in contracting
The SBA works with federal agencies in order to award 23 percent of prime government contract dollars to eligible small businesses. It also offers counseling and help to small business contractors.
Assess your businessEvaluate your small business to see if it has what it takes to win a government contract.
Basic requirementsYour small business must meet some basic requirements before you can compete for government contracts.
How to win contractsYou can increase your chance of winning a government contract by researching the federal marketplace and taking advantage of SBA resources.
Types of contractsThere are several different ways of contracting that can help you win awards from the federal government.
Size standardsSBA’s size standards determine whether or not your business qualifies as small.
Governing rules and responsibilitiesSmall businesses must comply with regulations that govern the government contracting process.
Prime and subcontractingThe federal government helps small businesses get an opportunity to subcontract on federal prime contracts.
Office of Government Contracting & Business Development
409 Third St. SW, Suite 8000
Washington, DC 20416