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How to Get a Slice of the Government Contracts Pie

September 18, 2010

By Ophelia Maynard

Finding out who your customers are and consistently marketing to them could mean the difference between sputtering along and having a backlog of regular business that keeps you busy. One often overlooked customer is the U.S. government. The U.S. government is the world’s largest buyer of goods and services, and the law requires that 23 percent of all contracting dollars go to small businesses.

According to the Los Angeles Times, in 2009, the U.S. government paid small businesses $96.8 billion to do a variety of work! This included scientific research, providing technical support and providing janitorial services. That’s up $3.6 billion from 2008. In a struggling economy, that’s good news. Nonetheless, navigating the world of federal government contracting is a daunting task. Luckily, there’s help available in the form of the U.S. Small Business Administration (SBA).

The SBA is an advocate for small businesses, helping to level the playing field so that small business can obtain a larger share of these government contracts. How do you know if contracting with the government is a good idea for your company? Here are some questions the SBA recommends you ask yourself:

• Are you willing to do the ongoing, detailed research to find procurement opportunities and take the time to prepare and present the bids and quotes?
• Are you willing to be a subcontractor to companies that are prime contractors?
• Are you positive your business can financially support the execution of a government contract that may involve significant start-up costs?
• Are you prepared to learn and follow the rules related to federal acquisitions?
If your answer is yes to all of the above, then you’re ready. You will want to register with the Central Contractor Registration (CCR) database. The CCR is a database of companies that want to do business with the federal government. Collect all the following information before you go to the CCR database to register.

1. Determine if you’re really a small business. Whether or not the SBA would classify you as a small business is dependent on the number of employees or the average revenue of businesses in your industry. Go to http://www.sba.gov/contractingopportunities/officials/size/index.html to find out if you fit within the guidelines.
2. Obtain a Data Universal Numbering System number (DUNS). It’s free at www.dnb.com.
3. If you don’t already have a federal tax identification number (also known as an EIN or TIN), get one. Go to the IRS’s website and find out how to get one for free at www.irs.gov/businesses/small/index.html.
4. Classify your business according to the North American Industry Classification Codes (NAICS). Look for the codes specific to your industry at http://www.census.gov/eos/www/naics/.
5. Classify your business according to the Standard Industrial Classification (SIC) Codes. Look for the codes specific to your industry at www.osha.gov/oshstats/sicser.html.
6. Classify your business according to the Product Services Codes (PSC) and the Federal Supply Classification Codes. These are optional, but it is recommended you classify your business according to these codes because government buyers do use them in searches. Look for the codes specific to your industry at www.fpds-ng.com and www.dlis.dla.mil/h2.
7. Find out if you meet the criteria for the SBA-administered programs that are geared toward specific groups. These are: the HUBZone Program, the 8(a) Business Development Program, Service-Disabled Veteran-Owned Small Business, Veteran-Owned Small Business and Women-Owned Small Business.
8. Gather your Electronic Funds Transfer Information (EFT) to ensure payment of your invoices.
9. Once you’ve done all your homework, the next step is to register and create a profile in the CCR database. Go to www.ccr.gov.

If you’re feeling a bit overwhelmed, don’t despair. Tackle each step one at a time. If you still find you’re having difficulty, contact your local SBA office for assistance. Your tax dollars have paid for the service, so make good use of it. They’re waiting for your call.

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About Ophelia Maynard: Ophelia Maynard is a freelance writer providing administrative support, writing, proofreading and research services to small businesses, entrepreneurs and writers. She especially understands the unique needs of those in the government and non-profit sectors.

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