Business and the Federal Marketplace: Why and How to Win Federal Contracts

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Last Updated: December 9th, 2021

Guest Post by Brad Anderson, President of FAMR

The federal contracting marketplace is massive: the federal government awarded an eye-popping $5.4 trillion of contract work to certified businesses in 2019.

Companies that can capitalize on any portion of this economic boon, from small businesses to large corporations, are well-positioned to scale and succeed. Additional benefits of working with the federal government include preferential bidding, subcontracting, set-aside grants, and a few others that we will detail further below. 

To vie for federal contract work, though, a business must first register with The System for Award Management (SAM). SAM acts as a platform where government officials and associated contractors can search for vendors based on varying factors. Registering with SAM is an ongoing process as businesses must update or renew their registrations annually. 

Read on to learn about federal contracts and also how various businesses that meet specific criteria are eligible for receiving supplementary benefits from the federal government. These businesses include women-owned businesses, veteran-owned businesses, businesses run by socioeconomically challenged owners, and all businesses conducted within a historically underutilized zone. 

Why register to do business with the federal government?

Well, let’s touch on the numbers again. As mentioned above, the government spent $5.4 trillion on contract work in 2019. How about in 2020? If you think that spending went down amongst a global pandemic, you’d be wrong. The government spent $5.6 trillion of its budget on purchases from domestic businesses.

The bottom line is that the federal government is the largest purchaser in America. Any business selling to the largest buyer has a straightforward path to success. 

Outside of the numbers, the reasons to work with the federal government include securing exclusive grant and certification opportunities. An additional reason is particular to small businesses. The U.S. Small Business Administration is keenly interested in the bolstering of small businesses across the country. In fact, 23 percent of all federal contracting must be allocated to small businesses annually to support small business growth.  

The benefits keep coming for federally registered businesses. Federally registered businesses are allowed to access valuable business opportunities in the private sector through private sector bidding. Federally registered businesses also benefit from preferential bidding, which empowers them to win federal business over the non-registered competition. Subcontracting is also legally encouraged by the federal government for registered businesses, which increases a registered business’ influence in its industry. 

Okay, so we’ve covered the why to register federally. Let’s take a look at the how. 

How do I register to do business with the federal government?

Business owners and operators have multiple options for registering their business with the federal government. For starters, business owners can self-register or partner with a professional group to advise them throughout the process. The process consists of acquiring a DUNS number with the Data Universal Number System (DUNS), getting SAM-Registered, and submitting for a Commercial and Government Entity (CAGE) code.

Data Universal Number System (DUNS)

The first step in the process of registering to contract with the federal government is to acquire a Data Univeral Number from the Data Universal Numbering System (DUNS). These unique, nine-digit numbers empower the federal government to track the financial stability and reliability of businesses. 

System for Award Management (SAM) Registration

Upon acquisition of a DUNS number, businesses can self-register with the System for Award Management (SAM)

Commercial and Government Entity (CAGE) Code

Once a business has successfully registered via SAM, they can use their DUNS number to request a Commercial and Government Entity (CAGE) Code. This code which was designed to be public information is distributed by the Department of Defense. It enables the government to keep a watchful eye on every company that does business with the government. 

And that’s it. Once a business has secured its CAGE code with the government, they’re ready to jump into the Federal Marketplace and start competing for federal contracts. 

Additional certifications for small businesses

Certifications can help businesses excel even further within the federal marketplace. 

If a business is declared small via the U.S. Small Business Administration’s sizing standard, a business may be eligible to receive additional benefits via a small business certification. The litany of certifications afforded to businesses awarding them various benefits target underrepresented groups, including women, veterans, underutilized zones, and socioeconomically underprivileged entrepreneurs. 

Woman-Owned Small Business (WOSB) Certification

Businesses owned by 51% women and operated by women executives qualify to receive the Woman-Owned Small Business certification. This program, established in 2011, guarantees that 5% of annual contracts allocated will be with WOSB-certified businesses.

Veteran Owned Small Business (VOSB) Certification 

Businesses that are majority controlled by Veterans, that are operationally managed by Veterans, and have a Department of Defense Form 214 are eligible to join the VOSB program. The VOSB certification affords Veteran owned and operated companies to leverage exclusive contracting opportunities. 

HUBZone Certification

When U.S. Congress launched HUBZone Empowerment in 1998, it did so with hopes of assisting business owners in traditionally underutilized business zones. Certified businesses within these zones can vie exclusively for 3% annually of the federal government’s contracting budget. 

8(A) Certification 

Born out of the civil rights movement, the federal government’s 8(A) Certification aims to give minority entrepreneurs and small business owners additional support. Certified 8(A) businesses are awarded an exclusive 5% of the federal government’s contracting budget. 

Federal contracts benefit American businesses 

The federal government is the largest spender in the United States annually, and those businesses that work to service the federal government are in an incredibly advantageous position. Additionally, the federal government aims to support small businesses with its spending by exclusively reserving varying degrees of its budget to support domestic small businesses. 

We’ve covered the steps necessary to register with the federal government for federal contracting: acquire a DUNS number, register with SAM, and be dispatched a CAGE code. Business owners can complete this process on their own, or they can seek professional advisement throughout the registration process.

Regardless of the method of registration, the potential benefits of working with the federal government are paramount, and any relevant business should pursue this opportunity. When domestic businesses — and small businesses, in particular — thrive, we all succeed. 

Brad Anderson is the President of Federal Award Management Registration, a trusted, family-oriented business dedicated to assisting businesses in navigating the Federal Marketplace. FAMR’s mission is to efficiently and accurately guide dedicated businesses through the complex series of requirements and red tape the government requires for Federal Contracting, Registrations, and Certifications. Established in 2015, FAMR has assisted thousands of successful businesses over the hurdles placed before them in any of these processes. Brad is at the helm of this industry-leading business, adapting and growing every step of the way to ensure clients succeed. 

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