What Every Entrepreneur Should Know About The World’s Largest Customer

Government contracting is by far one of the most overlooked, yet profitable, ways to grow a small business.

Photo: JeFreda Brown; Credit: 
Mic Fontaine Beauty Fashion Photography
Photo: JeFreda Brown, CEO of Goshen Business Group; Credit: 
Mic Fontaine

Government contracting is by far one of the most overlooked, yet profitable, ways to grow a small business.

Yet, I have encountered many business owners do not know what exactly what government contracting is and how it can benefit their businesses. An overwhelming majority don’t even know it exists.


What is government contracting?

The government is a consumer just like us. As a matter of fact, the government is the largest consumer in the world. And businesses can obtain direct access to thousands of active local, state and federal government bids (i.e. contracts).

The government purchases products and services from businesses across the globe. There are many methods used to acquire essential products and services. And they may spend anywhere from $3,000 up to over $100 billion.

They process generally starts with requests for information, proposals, or quotes from businesses when purchases need to be made. Each agency (at a federal, state and local level) is responsible for the procurement of goods and services. One great resource business owners use to find these opportunities is FedBizOpps.


Finding government customers

One of the great aspects about government contracting is that there are programs set aside specifically to award contracts for small businesses. These programs help small businesses by eliminating bids from larger companies for contracts, thereby making the bidding process fair.

However, getting started as a contractor is still competitive.

For example, they set aside programs are small businesses, women-owned small businesses, service-disabled veteran owned small businesses, small disadvantaged businesses, 8(a) businesses, and HUB Zone businesses.


Photo: © mooshny, YFS Magazine
Photo: © mooshny, YFS Magazine

According to the Annual Agency Small Business Scorecards, for fiscal year 2015, the government had over $352 billion eligible to spend. Over $90 billion was awarded to small businesses and over $17 billion to women owned small businesses for prime contracts.

While this all sounds incredibly enticing, let me give you a heads up about government contracting. You cannot just go bid on a contract. You have to prepare your company and obtain the necessary information. In fact, it could very well take you 6 months to a year just to prepare your company to do business with the government.


Government contracting, quick tips

If you’re interested in working with the world’s largest customer, here are some quick tips you’ll need to know:


  • There are federal contracting rules and regulations you will have to familiarize yourself with, including, but not limited to: Federal Acquisition Regulations (FAR), Defense Federal Acquisition Regulation Supplement (DFARS), Cost Accounting Standards (CAS), Code of Federal Regulations (CFR), and more. You can learn more about all of the federal acquisition regulations and rules at Acquistion.gov.

  • You have to obtain a DUNS number and register your company in the government’s database of vendors referred to as SAM, the System of Awards Management.

  • You should also classify the products or services your company provides, and they must be identified using the North American Industry Classification System (NAICS) codes.

  • Develop a great sales team. This team should include a: (1) Business Development/Marketing Expert, (2) Proposal Writer, (3) Accountant/Consultant with government contracting experience, and an (4) Administrative Assistant.


Getting started

Assembling the right team to bid on government contracts is essential. Here’s a closer look at who you should have on your roster.


Business dev and marketing expert

The business development and marketing expert on your team will help you identify the right government contract opportunities for your company and develop the right relationships with contracting officers or buying officials at agencies. This expert will also create marketing material (such as a capability statement) and know how to best market your company’s capabilities to agencies. Whoever you work with in this role will need to have excellent research and communication skills.


Proposal writer

A proposal writer prepares proposals to submit when you’re bidding on federal contracts. The proposal normally contains a technical portion and a cost proposal. The proposal writer works with your accountant (who should also have government contracting experience) in preparing the cost proposal. The proposal writer makes sure the proposal answers all of the requirements of the agency’s Request for Proposal (RFP). A good proposal writer can help you set your company apart from competitors.


Accountant/consultant with gov’t experience

An accountant or consultant with government experience is a huge asset for your small business. He or she can help you develop an adequate internal control system, which is required for federal contracting. One of the main internal controls is an accounting system. There has to be an accounting system in place, and it must meet requirements of federal regulations.

He or she is also vital in preparing adequate pricing for proposals and ensuring compliance after a contract is awarded, thereby assisting with audit requested from federal agencies, for example.


Administrative assistant

An administrative assistant provides support for you and other members of your team. He or she ensures your company’s information is entered into all critical vendor databases and always kept up to date.

An admin assistant can also assist in completing any necessary due diligence when preparing for bidding, networking with agencies and prime contractors, and required reporting after contract awards.


Ironically, my first experience with government contracting was my senior year of high school. I was a student employee for the contracting division of The United States Army Corps of Engineers (USACE). Their contracting division is responsible for purchasing products and services the Army Corps of Engineers require for many different projects and jobs.

I didn’t understand federal contracting then, but I became very familiar with it when I was hired as an Auditor with DCAA after graduate school. As a Senior Auditor, I performed many audits on new and experienced contractors.

I have witnessed first-hand how winning a federal contract has changed the lives of small business owners and allowed them to provide jobs to others.

For more information on government contracting visit SBA.gov/contracting.


This article has been edited and condensed.

JeFreda Brown is the CEO of Goshen Business Group, LLC located in Birmingham, AL. Goshen provides financial and business compliance consulting and professional development training for small to large sized organizations. With over 16 years of experience, JeFreda is passionate about sharing her knowledge with and helping others. She is a former Senior Auditor with DCAA and now provides consulting for companies wanting to do business with the Government. She is also a speaker, author, and an adjunct professor. Connect with @GoshenBG on Twitter.


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