Federal Contractor: Basic Requirements

According to the Small Business Administration (SBA), your small business must meet some basic requirements before competing for a government contract. Learn more on how to become a federal contractor and take you business to the next level.

Each year, federal government agencies hire contractors to provide billions of dollars in services and products. The government’s goal is to award at least 23% of those contracts to small businesses.

To sell your products or services to the government as a federal contractor, your business must meet specific requirements.

Federal contractor: 4 basic steps

1. Get proper registrations and ID numbers

In order to begin bidding on federal contracts, you will have to register your small business.

• DUNS number

First, you need to get a Dun & Bradstreet (DUNS) number, a unique nine-digit identification number for each physical location of your company. The government uses this code to track your company’s credit record.

• NAICS code

The North American Industry Classification System (NAICS) code classifies businesses based on the specific product or service they offer. You must know your six-digit NAICS code to compete for federal contracts. If you sell several products or services, you will have multiple codes.

2. Meet size standards

Your company must meet size requirements set by the SBA. These size standards define the maximum size that a business can be to qualify as a small business for a particular contract.

The SBA assigns a size standard to each NAICS code. Most manufacturing companies with 500 employees or fewer, and most non-manufacturing businesses with average annual receipts under $7.5 million, will qualify as a small business.

3. Register with SAM

You must register your business in the federal government’s System for Award Management (SAM). SAM is a database that government agencies search to find contractors.

Using SAM, you will be able to certify that your business is eligible for contracts that are reserved for companies like yours. You will also be able to represent if your business is eligible for contracts under an SBA contracting program because it is disadvantaged, women owned, veteran owned, or located in an underutilized area.

Keep in mind that your small business’ profile in SAM is like a résumé. Creating a profile that is precise and attractive is imperative to winning a government contract. Make sure to use accurate, descriptive terms about your company so that contracting officials can easily find you in search results.

Remember that the government uses this system to store information about your business, including its certifications, so it’s very important to keep your SAM profile updated.

4. Maintain compliance

Finally, you must comply with all laws and regulations. The federal government’s purchasing process is governed by the Federal Acquisition Regulation. Electronic Code of Federal Regulations (e-CFR) for small businesses are listed in 13 CFR 125 and current as of November 22, 2019.

Contact Rafael Marrero & Company today to learn more on how to become a federal contractor and find out how your firm can successfully enter the federal marketplace. Call 1-888-595-6221 for a free consultation or email rafael@rafaelmarrero.com.