Massive opportunities for small businesses in government contracting
When most people think about companies that sell goods and services to the federal government, they probably think big: aircraft from Boeing or tanks from General Dynamics.
Yet, all of these multibillion-dollar contractors rely on thousands of small businesses to provide them with components or services for their operations. The federal government also directly contracts with an incredible number of small businesses every year to secure the goods and services it needs to carry out its various functions at home and abroad.
In fact, the federal government sets aside almost all contracts under $150,000 specifically for small businesses. There also are a number of programs that set aside contracts for small businesses owned by women, veterans, minorities and for companies located in certain economically disadvantaged areas of the country.
Over the years, these programs have been a great benefit to small businesses. In fiscal 2016, Michigan companies received 97,900 federal contract awards totaling more than $5.2 billion. Of that total, small businesses accounted for billions of dollars in work.
Small businesses have big opportunities when it comes to government contracting. Although there are some substantial differences in the way the government does business compared to regular commercial transactions, with the right guidance to get your company into the sector, the payoffs can be well worth it.
Luckily, the first steps for any company that wants access to the federal government market are the same across the entire spectrum, whether you are selling lawn care or aircraft carriers.
Identify the market: Because it involves the expenditure of tax dollars, nearly every purchase the government makes is available for public review. You can see decades’ worth of the government’s purchasing history on the Federal Procurement Data System at fpds.gov. Type in the items or services you offer and see if the government is a current or former purchaser.
Connect with other innovators: There are two very active support systems for Michigan contractors looking to sell to the federal government. The first is the regional system of Procurement Technical Assistance Centers, which can be found at ptacsofmichigan.org. Another fantastic resource is the Michigan Chapter of the National Defense Industrial Association. NDIA hosts several outstanding events that gather experts from all over the country to discuss government procurement, industrial development and all for buyers and sellers to connect. Learn more at ndia-mich.org.
Qualify for any special status: The federal government has various programs that seek to award contracts to small businesses, disadvantaged businesses, women-owned businesses, veteran-owned businesses and others. The government refers to these programs as set-asides. Information on how to qualify for these programs is available from various sources, including the Small Business Administration.
Register with the government: In order to do any business with the federal government or to even be able to bid on opportunities, each company must register online with SAM, the System for Award Management, available at sam.gov. SAM also is where a company identifies whether it qualifies for any of the set-aside programs mentioned above.
Watch for opportunities: Although there certainly are some increased procedural steps involved with selling to the government, one of the advantages of doing business in this sector is your customer tells you exactly what it wants to buy. Almost all of the purchasing needs of the federal government are listed at FedBizOpps; you can visit its website at fbo.gov. Companies can search for current opportunities and set up search agents to alert them when new opportunities are posted that might be a match for their capabilities.
Access to this enormous market is available to companies that take the time to learn the unique features of the federal procurement system and seek guidance from trusted advisors. Given the size and scope of the federal government’s annual budget, the opportunities for Michigan small businesses are innumerable.
Adam D. Bruski and Gaëtan Gerville-Réache are attorneys at the law firm Warner Norcross & Judd LLP where they counsel new and experienced government contractors in all stages of the procurement process. They can be reached at firstname.lastname@example.org and email@example.com.